Manchester United PLC

1
Manchester United PLC
Preliminary Results to 31 July 2004 27 September
2004
2
Preliminary Results July 04Striving to be the
best..on and off the pitch

• Agenda
• Overview David Gill
• Financial Review Nick Humby
• Vision Strategy David Gill
• Commercial Review Andy Anson
• Summary David Gill

3
Preliminary Results July 04Financial highlights

• Strong revenue performance - 169m
• Operating profit before depreciation and
  amortisation up 6 to 58.3m
• PBT down due to player trading losses of 3.1m
• EPS 7.4p (11.5p)
• Solid balance sheet - cash held 36.0m

Consistent financial performance
4
Preliminary Results July 04Dividends

• Progressive dividend policy continues
• Basic up 6 to 2.65p (2.50p)
• Basic increased for 12th consecutive year
• Dividend covered 2.8 times
• Strategic decision to expand stadium takes
  precedent over special dividend

Consistent dividend policy
5
Preliminary Results July 04Player / Agent
disclosures

• First UK club to provide full disclosure of all
  player trading activity
• Aim to set benchmark for the sector
• Transparency key to improving industry standards

Consistent high standards of governance
6
Preliminary Results July 04Profit and loss
summary
July 04 July 03
m Change m
Turnover 169.0 -2 173.0
Group operating profit before depreciation and amortisation 58.3 2 57.3
Depreciation (6.6) -10 (7.3)
Amortisation (21.8) 4 (21.0)
Exceptional Costs - - (2.2)
Group Operating Profit 29.9 12 26.8
(Loss)/profit on disposals (3.1) 12.9
Interest, JVs etc. 1.1 (0.4)
Profit before tax 27.9 -29 39.3
Strong operating performance PBT impacted by
player trading
7
Preliminary Results July 04 Revenue analysis

• m m
• 2003 Revenue 173.0
• Less one-off items in 2003
• ECL Final (3.5)
• Nike yr 1 of contract (3.5) (7.0)
• 166.0
• Matchday
• Domestic cup gate receipts (3.6)
• ECL reduced no games (4.4)
• Other 2.1 (5.9)
• Media
• FAPL TV 0.9
• ECL new contracts 3.0
• Domestic Cup 2.4 6.3
• Commercial
• Vodafone / Platinum 1.1
• Other 1.5 2.6

Revenue down but improved mix benefits Operating
Profit
8
Preliminary Results July 04 Revenue mix
m

Underlying revenue from FAPL up
9
Preliminary Results July 04 Operating profit
before depreciation and amortisation up

• m
• 2002/03 55.1
• Exceptionals 2.2
• ECL Final (1.3)
• Nike yr 1 of contract (3.5)
• 52.5
• Contribution from domestic cup 0.3
• Contribution from ECL 0.2
• Staff costs 2.6
• Other revenues net of costs 2.7
• 2003/04 58.3

Operating profit margin 34
10
Preliminary Results July 04 Operating
profit before depreciation and amortisation by
competition
UCL contribution 40
11
Preliminary Results July 04 Player trading -
disposals
Cash generated by player disposals
12
Preliminary Results July 04 Player trading -
acquisitions
Prior years
Current year
Reinvesting in the squad
13
Preliminary Results July 04 Cash flow summary
Strong cash generation balance sheet
14
Preliminary Results July 04 Stadium expansion
update

• Develop North East and North West quadrants of
  the stadium
• Increase capacity by 7,800 to 75,600 from start
  of 2006/07 season
• Costs estimated to be 39 million
• Planning application submitted 10 September
• Expected cash payback of 6 years

Largest club stadium in England
15
Computer image of North East Quadrant
16
Preliminary Results July 04Our Visionto be
the best football club in the world both on and
off the pitch

• Developing key strategies for growth
• Maintain playing success
• Develop media rights
• Leverage global brand
• Treat fans as customers
• Maximise use of Old Trafford

Consistent strategy designed to deliver long-term
value
17
Maintaining Playing Success


Continual process of squad development
18
Preliminary Results July 04 Media Revenues

• FAPL 04/05 - Total value unchanged but no
  stepped onwards increases
• - 2.3m p.a. deposits finished 03/04
• - Additional live games granted under
  new contracts
• - Increase in overseas contracts
• - Net impact 8m decrease in 04/05
• UCL 04/05 - 15 (03/04 45) of fixed
  TV pool due to 3rd in FAPL in 03/04
• - 4 English teams (03/04 3)
• - Net impact 6m decrease in 04/05

Impact of centrally negotiated media contracts
19
Preliminary Results July 04Commercial Focus
TREATING OUR FANS AS CUSTOMERS

• CRM
• Targeting key markets
• Membership
• New business initiatives
• Re-alignment of sponsorship structure
• Nike
• Vodafone
• Driving profitability
• Re-structuring key deals
• Efficiency of content creation
• New business initiatives

WORKING WITH THE RIGHT PARTNERS
DEVELOPING OUR OWN MEDIA CONTENT
20
Preliminary Results July 04 Treating Fans as
Customers
Customer Focused Initiatives
Customer Relationship Management

• 1.7 million fans attending games
• MU Finance
• 116,000 customers
• International expansion
• One United
• 193,000 members
• International expansion
• 3.8 million shirts in 1st 2 years
• 6 million unique users p.a.
• c100k MUTV subscribers

• Collected 2.5 million fan records
• Filling data gaps
• Segmentation of fan base
• Tailored communication
• Appropriate products and service
• Contractual improvement of data quality

21
Preliminary Results July 04 Targeting Key
Markets
Must Have Business

• Membership
• Merchandise
• Kit
• Non-kit
• Media
• MUTV
• Publishing
• Internet
• Mobile
• Soccer Schools
• Sponsor activation
• Tours to create halo effect

Strong focus on most attractive markets
22
Preliminary Results July 04 Working With The
Right Partners/Media Content
Vodafone

• 36m over 4 years
• Mobile JV
• Portals Launched in UK, Australia, Sweden and New
  Zealand
• Significant addition to Platinum tier
• 2 Year deal
• Cash plus supply of cars
• Nike, Vodafone plus fewer, bigger relationships
  (primary partners)
• Tailored rights packages
• Global activation
• Secondary tiers of suppliers and promotional
  partners
• Importance of MUTV
• Content efficiency
• New publishing deal

Audi
Re-alignment of sponsorship structure
Media Content
23
Preliminary Results July 04 Working With The
Right Partners - Nike
Geographic split of sales

• Strong shirt sales for non-home kit year
• Working closely with Nike to target individuals
  in key markets more effectively
• Established soccer schools in Hong Kong and
  Disneyland Paris
• MU Premier Cup - final at Old Trafford

Shirt Sales (000s) 03/04
02/03 Home 406
1,741 Away 631 521 Third
259 300 1,296 2,565
Strong 2nd year of global partnership
24
Preliminary Results July 04Performance summary

• FA Cup winners for record 11th time
• Strong results and cash generation
• Continued evolution of playing squad
• Continued success of Nike and Vodafone
  partnerships
• Exciting stadium expansion plans
• Progressive growth in basic dividend to 2.65p

Consistently setting high standards
25
Appendices
26
Match Day Turnover down 13
Includes hospitality
27
Media Turnover up 11
28
Commercial Turnover down 2
29
Media contracts

• Domestic
• New FAPL contracts worth 1.3 billion (current
  1.4 billion) for 3 years 2004/05 2006/07
• Distribution principles retained (50 equal
  share, 25 facility fees, 25 merit awards)
• 136 live appearance over 4 packages (current
  contract 66 Sky 40 PPV)
• Stepped increases in current contract plus a new
  limit of 25 live games will mean reduced income
  to MU from new contract
• Overseas contracts up 29
• ECL
• Current contracts for 3 years from 2003/04
  2005/06
• Distribution
• Participation fee - CHF 2.5m
• Group stage - CHF 0.5m per match plus CHF 0.5m
  win/CHF 0.25m draw
• Last 16 - CHF 2.5m
• Quarter final - CHF 3.0m
• Semi-final - CHF 4.0m
• Final - Winner CHF 10m / Runners up CHF 6m
• TV pool - CHF 89m for English clubs
• - Fixed 50 allocated on FAPL prior season
  finish (1st 40, 2nd 30, 3rd 15, 4th 15)
• - Performance 50 allocated on number of
  games played relative to total number of games
  played by English Clubs.

30
Number of games played in 2003/04
31
Capital Expenditure Since Flotation

• ,000
• Stadium developments 1991-2003 93,219
• 2004 Quadrants development 2,820
• 96,039
• Carrington training ground (phase I II)
  21,268
• United Trading Estate 9,125
• Land/property/car parks 12,597
• 2004 car parks 1,740 23,462
• Other (plant, machinery, fixtures fittings)
  36,004
• 2004 LED hoardings etc 3,477 39,481
• Total to 31 July 2004 180,250

32
(No Transcript)