MANU - Earnings call transcript Q2 2021

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Operator

Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to the Manchester United Earnings Conference Call. At this time, all participants are in listen-only mode.

Following the presentation, we will conduct a question-and-answer session. [Operator Instructions] We would like to remind everyone that this conference call is being recorded. the for to Manchester turn of Freedman, now Relations Investor United. will call Corinna over Head I

Corinna Freedman

Thank you, Grant. United's second Hello, everyone and XXXX call. welcome earnings quarter to Manchester

of and Our being XX days. on webcast this for call and our call site will recorded a is available be replay

Before SEC. and subject and Chief Woodward, estimates forward-looking today matter Director; materially which Chairman are cautionary as of of cause evening; will Development. like With from and I call Director or this as release could we Cliff Managing actual Executive and with would to our include Baty, Executive we our our our our the us remind call such everyone over in our will Hemen various be well begin, as to Ed? to risks differ Tseayo, risk Corporate the opening call our statements. to remarks. factor that that estimates our these a turn uncertainties formality, forward-looking Financial now on Ed considered additional results this conference Any along Officer; Chairman; discussions note earnings conference Group should statements, with the statements, Richard Vice Arnold, for Vice with our included filings

Ed Woodward

thank Thank us. for and everyone you, Corinna joining you

and and supporters. began to reflect for UK on football focus since the our for months been what's on its an whole. to we to course is traffic close today were Manchester old It's tighten grip extraordinarily as opportunity United a While is year XX an on quarter the the fiscal pandemic required the also almost challenging for society second of

importance to has football. As only fabric absence back. to wait highlighted their of I've welcome of them said fans the We can't the before,

in commercial the dedication our a pay want £X over our same, and particular and It around the provided tribute beyond. been for charitable community to employees our not pride going fans. world. together maintain to active our robustness fans finances to and I to that of to support through of keeping to have after reflects play staff and by the of who are source current continue the our we our clubs future a circumstances. enabled have pleased to source and local society of pandemic, to Matchdays our This in we this past The once-a-century-level fueled while of In hectic role play our in coaching, Since resilience ends medical all cycle precious support continue competition of the has and both this positive XXXX. part club discussions force causes in an for on good the the of in with ECA proud business million our and football However, being in how commitment crisis. entertainment in in schedule year UEFA's a matches of reflects start also values community club European the and competition the I'm and responding foundation very difficult to we performed respects. of tested Europe,

optimistic in are details of greater While And course, the we competition. UEFA of anticipate will we falling from successful the positive look world yet rapid capacity crowds new many rate to social reduced examples and of We're final include in full delivered to with forward proposal about In crowds resolved, beginning our involvement with near-term seeing hopeful and this Old live reopening very of that to spectators clubs next season. spring. a control governance of format long-term to to plans support. live confident for leagues. go including sports the to up will infections which hand-in-hand be domestic focus the return The Initially gradual remains a and lockdown UK, football ramping fans we road will seeing vaccines makes for for safely thriving appeal back capacity out dairy we're the fans crucially on prospects this about of us on capacity, with Trafford. the for some remains feel events distancing. full the around and strong Demand greater rollout of be map government's our the with the preparing of with the continue limits the

in the and Return to fundamentals. our enabled of in UK while ever role the we playing a the underlying about form tunnel game across the like I'd be this is pandemic, our active inspire of club we to than prospects. at power campaign strong an on-pitch current As pose of reiterate doubt equally against the those that and cultures by of in feel still of more this no we our we're our generations, end and the look other is are United particular racism sports about pleased beyond summary, forefront that long-term lockdown near-term. the strength Football the confident sadly of and today. Old squad, light in deployment our We easing as society will continue of In progress club's the for discrimination and a efforts. a restrictions And the season's fans challenge ideologies. strong bullish as vaccine at to on Trafford

business teams Arnold, for you my and final a this extend quarter the overview. to through I in their whole hand like and moment, increased self-sustaining enable club In and would our you. to our all fan pitch, key sacrifice Our Group off work to on and update a operations, Academy playing our provide XXXX. engagement, will But comment, strength activities through in to enduring to hard on the our best-in-class operating emerge an sponsor thanks most importantly relative of in Managing this partnerships I'll this all over position. that digital the Richard a squad, model our crisis of and Director, the operational facilitate both stronger investment Thank

Richard Arnold

you everyone today. and joining to for Ed, us thank you, Thank

better. doubt with more that reflect modern this huge the of Ed's eager to season, continued impact we followers. toward and the were sentiment, virus an digital created As deepening of Old by that we've our it many had Trafford that supporters measures full for boards the fans year, time, absence connections our has that and lockdown flexible times And the outset and the will and that crisis the economic we all a of recognize or is Despite rollout, this the surely, widespread year have the path on before the will same and global we're are steadily operations ramifications responded in whether uncertain a to but proud trends backdrop resilience. of for this and adaptability. impose. rebuild past at which this echo our We've and resilience has way way already workplace on providing few the said this us on be opportunity and vaccination our the profound lives impact exponential the of that the a no all tested through with to would has past were pandemic is club, motion, To our pandemic the accelerated as or pandemic, spread the everything things we save help revert understood the global of the not but and normality. At back social

pandemic the we our significant which, come. While and business. expect, benefits headwind, to global ongoing many The transformed years of remains will aspects pivoted a many generate quickly results of we for

positive difference of touched the briefly proud communities we're our in make we humbly on, Ed XXXX. As to able were in

really proud by casual continues. XX,XXX recently I'm our also a staff. the contributions, to been nations, NHS, We've communities the NHS of We we accomplished. initiatives program. that As approximately help of continue local that Old people that efforts as direct and fundraising XXXX. has million hundreds in opened believe the foundation, our for Chairman for of the to in community use We the across as this pandemic with our our benefited supported efforts, in And part payments banks from nearly will vaccination our food unique work are as £X volunteers long Trafford center including of taking kind training national for and schools

club committed advancing, was We FA's of in signatories will the of one Code. founding to also in our and club the The diversity sport. our equality and Football remain Leadership Diversity

of of welcome Old ever construction final fans. better million was completed of disability. and aim Our club, representation spans our in areas all back the groups that £XX end, our pleased will our and XXXX. including And the to end achieve accessible those to we're appropriate commitment of our the equipped LGBT+ than of be society, upgrade at to to To that diversity is all underrepresented our of community Trafford all announce facilities with

to ending football after eager understanding this fans, UK. Old the you with is and And passports at ticketholders, this our that would parallel, aware, deal that May expect We national subject capacity. we're know to of of XX, now the supporters, normal than ongoing In will week, ever with its return. the before. will roadmap for of more to XX,XXX experiences As to four-step a details including restrictions return establishing to the easing other to Trafford. up all earnings plans circumstances plans we stadiums when the be our and mean crowds to look more sharing in season to distancing. our from people all protocols be testing, members government schedule, our hope call, according lockdown. plans may we will operations UK full on proceed shared very allowed to in We If these on season the next our of June. treasure be forward to our return the next It XXst Obviously, last continue return released current for to are

business Moving update. now to our

first operations. and Turning our digital to media

digital engagement to part and Given strengthened and and club a team as transformation. media growing drive we not we've The we demographic in digital increased Matchday social that but of this launched we continued in ongoing In to has platforms reach technology, wide also acceleration initiatives the our have supporters, absence prioritize our our new presence to geographic just leadership rate of invest digital continue and of CRM. media to on and we as club social marketing further several continue quarter. broaden platforms

Instagram on in several own our nine mobile platforms followers features. Premier X have amassing women's enhancements has League surpassed clubs. and a new July and team launched million On developed men's the Our we app following bigger recently launched XXXX

and mobile has fan this benefited experience channels. are data-led logged our in compelling a More Gamify users into our streaks to personalized which engagement our mobile and traffic before. our increased strong more predictions strong have ever end-to-end turn drove quarter Specifically engagement superior app than and now significantly functionalities a app usage in e-commerce

for sales merchandise X-month e-commerce that period note already to the useful it's prior entire the have season. think I surpassed

the In this women's in launch of is achieved season's this and also enjoying kits fact quarter we e-commerce kit. three we of momentum all record continuing record And into men's current are sales record day our sales as January. achieved sales

see have While we only to a product gross to these the well basis stats seeing sales of the was just XX December getting of conversion we significant diversify offset helped believe to traffic loss And mix. revenue we are lockdown. On reach we open latest Megastore closed which on started. and as runway that impressive and the as part these our are are geographic drive continue

government. expect in accordance the time the XX April for to reopen store the communicated fans line We with on by the

with mid-December continues sponsorship we've support impression to to the impressions seeing industry. broadcast channel event our market interactive with India and operations. the took supporter Since signed partners the In million new and supporters two and digital quarter MU flight to a continue deals a first across of renewal of XX global we featuring We our all and our Turning local the stabilize and quality believe programming via generated influencers. streamed partners XXXXXX to and exclusive multi-platform event our partner live. hosts events. to #ILOVEUNITED virtually This we're --

Ole with United Tobin This high-profile fan event event the signing amount viewers viewed and event last with Heath. our web streaming held and app. by across the USA partners our featuring of our also activating U.S. million the India recent YouTube and event #ILOVEUNITED of hosted We was via XX nearly supporters X.X live Xx recently Facebook by of weekend an our

currently WeChat most United XXXX and On the Weibo China. the to engaging is quarter. Manchester club Turning club China's season followed Weibo, the football native platform. this the on football on United platforms for most was

continue months million track TikTok over since We launch Dreams center our brief opening the with XX also Beijing, for on to nearly platform simultaneously early launched likes And our followers and Theater on we've March fastest-growing optimistic Harves. November. be Douyin expect two of we our on with And of near-term football late million launch the the global app. becoming in experience three club earned in first Offline, partner April much the in remains there about. finally to remain center we experience though challenges the

with future, in sustainably, fans just our Club's team, on demand, a to engagement about fuels via will continue virtuous relentlessly results new this growth Cliff? launch which And will the to seasons, review the the club our our details now the over community potential as commitment drives And turn the engagement but of our results, the CFO, our over reinvest the Cliff for I own well our emerging outlook. of discuss deepen are strong to excited platforms we our that by will We supporters. and over of we ability engagement, deliver remain many our cycle not inspired call decades. as opportunities Baty, fortifying and drive our and our next-generation to continuously platforms. the expect that, financial pursue commercial to Ultimately, club. to the engine to that and

Cliff Baty

year Thank be and results, the I'll talk related you, by fiscal first Richard. continue pandemic our to COVID-XX which lockdown. impacted to

providing we or forward any not this be guidance Given adjusted will EBITDA uncertainty, today. revenue

to for fiscal the £XXX.X our £XX.X impacted League revenues versus the and number a comparisons million was due quarter XXXX the the return prior Europa revenues £X.X Adjusted to of impact EBITDA prior played were million quarter. games than just relative of have year As reminder, Champions in to the year, the the relative Total down million the year-on-year been League Champions League. up million, year. to by £X.X the

wholesale million revenues in the by than of prior below to the impacts, royalties £XX.X -- were due prior were £XXX.X prior revenues Megastore items prior the £XX.X and in year, significant by lower million due our trade due Europa with e-commerce credit to together extension. a the our million, sponsorship revenues, to year and total share X.X% revenues the £X.X to contribution revenue. increased year Champions offset figure, which and primarily results, to million, revenues Merchandising commercial million, quarter, reduction reflects revenues. Broadcasting to increased key owing our to a £XX in Turning the the lower COVID £XX.X million, one-off League significant compared revenues sponsor licensing

season. In million, and the matches. £X.X Trafford played three with League in Old played total addition, six no group for were Matchday at all were XX stage games property were Champions revenues quarter in membership fees second attendance, quarter fans including being income. of this matches the

doors. reflecting Champions which £X.X million, player This expenses Moving versus of and exchange versus the primarily decreased prior depreciation down million, the of costs Net wages £XX.X portion by, finance the the the by excluding income the amortization amortization quarter. XX.X%, million were of prior £X.X operating increased to of quarter was in increase period due played X.X% increase income includes total to for impact for £X.X and higher £XX.X participation due on U.S. matches unhedged operating Depreciation were expense million, League. behind an for our statement, debt. gains an up Other year. the million foreign wages closed

interest remain cash in consistent cost previous broadly year-on-year. our have we mentioned in As quarters, U.S. dollars,

at drawing million loss million of cash had of of now over through At £XXX a prior the reflecting the of our XXst the sheet. on the of year, balance just to end £XX during COVID debt December, million was sheet, net credit £XX available down of Turning increase £XX.X an Matchday we million balance £XXX.X a the December, in resulting over the million revenues, quarter. our of lines impact

million Finally, CapEx with million. FY XXXX, £XXX player £XXX of for we be to cash expect amortization at approximately

which initial sentiment and versus forward expect future. occurred prior now Session worth cancellation premier we'll Looking with positioned for additional the we to I'll Ed five lapping that closing, to quarter, current play matches pandemic XXth we're current Question-and-Answer optimistic of year. year. therefore are to quarter stages uncertainty And Richard, the noting to the ready the and it's the weather last the in matches March the reiterate We an the beginning take league early be questions, your and of In current Operator? well the that,

Operator

go now will Vasilescu We Our first ahead. come [Operator today being the Instructions] question-and-answer Paribas. BNP session. will Please Laurent question Exane with from

Xian Siew

Hey A for guys, couple Laurent. me. this is for Xian on

side, retail retail closed. X% only you as that the was considering the mentioned. on was impressive First, pretty I Megastore down thought

help you big e-commerce the decline mentioned for big how is a was e-commerce Can was Megastore? in guys? how bit, the You strong. you dimensionalize And

Ed Woodward

do want you to Rich, take that?

Richard Arnold

Yeah.

think there's report goes a through whereas, difference through mechanism. the thing gross to the revenue, between net where what we share as so in gross licensed we I understand for Megastore report the passing a in first net So reporting of -- the the profit consumers, the e-commerce the is difference versus that retail to

In explosion that's well terms offset of drop by that's the both scale of the product the sale that's as the our partner, license wholesale a profit e-commerce as license the offset been reduction. us the by and to

Megastore. same expect gross year-on-year reduction you the translates broadly are than total smaller -- closing to whilst purely that would a the in from that translates of So the numbers the

Xian Siew

Okay, then Thanks. broadcasting got it. on And rights. second

you recently was the the As rates NFL there wondering, the thinking rights you think break was What getting broadcasting versus between about can domestic I for profile it out you're it are the how maybe And growth about over you potentially thinking think growth double I -- about time? maybe if an about revenue? longer potential article fees. how term, broadcasting international?

Ed Woodward

the likely reduction in about by it's off to think set right point of experienced but to mean, if in. the with covered start -- think to still last example seeing I and think the to Cliff two sales, in I think cycles rate The that NFL growth a expect maybe side. terms you less be that lower U.K. jump I yeah. me premium I on the growth that is we is we come, that And growth the the of sports we've league. of best Let than international big way then growth we're

of premier start a rates. the So deals that league as well growth at seen selling during the XXXX-XXXX, cycle couple some just has the good COVID been as has

I I think number on environment to to the to So come There that's right growth. hearing I the know through I COVID. in can't same the anything regard of selling the they that at least year-on-year want if put really that a during -- positivity don't we're on terms really despite with deals is even the And there's that? obviously as positivity Cliff, to. they're NFL don't as add

Cliff Baty

No.

mentioned think COVID, which we that, But nothing. the I mean, which mentioned, league net just I you the again you appeal of the otherwise happened deal shows had premier international. before across

Xian Siew

Okay, very helpful. Thank guys. you

Operator

will go come Please Konik Jefferies. Randy from Our ahead. with next question

Randy Konik

Thanks Yeah. a lot.

bit statistics club -- give perspective of deeper just China give you team, Obviously great perspective added us to monetizing on in else. a about on the way? the some talk a those everyone engagement touched you're in You your versus region Can you us the remarks. little -- on thinking how

thinking What's and really China? capitalize So latest there about for just team to what's any curious the in there? partnership monetization different update other over on? was have the on I And the strength brand on areas you're on just have of you the -- the going you -- the

Richard Arnold

are both routes in. Yeah, actively main so participating Yeah -- and monetization everyone. pursuing that we three

important China our with the such in our that fans benefit rights part of sponsors. and is The the to attractiveness of first, of obviously, an comes family

revenues. translates fans ability sponsorship with that into engagement engage to and So those an higher

e-commerce the four work particularly – identified with sites spring ecosystem well doing we a Tmall as that's have traffic – integrated with distributed And and first we're sites those further work we're will Secondly, as the opening obviously an the partnership that the and in-market the group, with revenues. on of experiential that that the then to Alibaba basis content with XX finally pass integrated YouTube, on contracted. drives doing we're drive Harves this into

sponsor expansion excited bring that the reach So and of country a engagement for of what big terms can about across very and fan us driving. terms in in that of its

Randy Konik

selling That traditional helpful. it's I'm seeing sure the you. what content, companies was have Netflix-like is – commercial around you. to we're They're least super or have means the which what market, the or that, trying do FOX, like guess, one more thing at The world less media more in or US I

sponsor you the disproportionately different want seeing to your you brands out get world. different get live more – are and kind your interesting exposure the side there to of across exposure that So brand more

you're from thoughts the more some us of, seeing type within commercial segment? the give any demand do Just there? sponsorship And – how ordinary that

Richard Arnold

good question. That's a Yeah.

I So set I are of I apart, items couple think, a globally. us a is mean, that say would what there in unique way

a fans our see the successful that to engagement translates and and huge to the of that the partners is deep a fan of first activate a in with get it and you setting base digital engagement. deep passion The and very particularly multiple commercial level to engagement digital sponsors engagement of scale translates is a looking setting. advertising in typical the with the And into that

digital only a and so – your itself engagement further digital western to – So then ecosystem question, and ecosystem very commercial success that subset. that a strongly offer strongly, powerful. in distinct that And equally obviously not previous there's the as able but is Chinese not in to we're more in if

and tends unique that global that fast-growing large that powerful and to be genuinely company. in strength partners offer the attracts that be are way, is to and to that seeking And that in successful being that able So in basis. terms global market on a of

Randy Konik

Thanks, helpful. Super guys.

Richard Arnold

Randy. Thanks,

Corinna Freedman

Grant?

Operator

the further Thank has session. question-and-answer attending being you questions, today's our no conclude presentation. conference for concluded. There And this now will

now may disconnect. You

Manchester United (MANU) 5 Mar 212021 Q2 Earnings call transcript