MANU - Earnings call transcript Q4 2021

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Operator

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Manchester United Fourth Quarter 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

website Thank available you, A webcast recorded Allison. this Investor United’s this our fourth Relations Hello, of results and morning everyone, on and of financial will for call accessed call XXXX a welcome and fiscal website. can XX replay earnings on issued This days. and call. was press our be containing quarter release be earlier to our Manchester being is

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

Ed Woodward

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

that no United. the are in among history most XX the XXXX Manchester As we review months financial our fiscal those of year, the challenging there’s for doubt results

proud and we’re pandemic times. that said position. the out in is solid While the this from be we course return been full pandemic would and to stadium most of stronger everyone during in the as to testing the fans for of now we back. the of we’ve we’re to very in part opening to at these I’m important seeing the associated see that capacity underlying fans financial of games with the the club the both recovery almost from the time emerge a first of say visible, is clear them The Old that We months. club it’s strength Trafford, Trafford, crowds season. season here is XX could to borne of -- a the atmosphere see shown the delighted towards through demonstrates The foundation. lifeblood the of resilience relative fantastic glad during this of so home have are most amazing depths see and Champions believe full game, League see, continued Old games to League also also that and the expect I And that our Premier to recovery impact the build continue

the and United playing class attacking Manchester top build homegrown a of best club talent, sold addition Furthermore, signings continued winning James the fee some Dan way. squad Ole the blend in a Leeds in success youth These significantly strategy Old We’ve to of Sancho rest in been league balance the for We comprising the a feeling the about of and recruits our aim plus £XX of Heaton. ability firm the summer, footballers demonstrated to the to Ronaldo, commitment the of have of and attract and Trafford million, a world’s Varane, on our we helping clear our made and with football recently to squad is campaign. pitch, start the the strong and with has team experience, trophies a to deliver the On pitch. over excited of everyone the add-ons. strengthened

also and of processes, we’ve investment to and increased recruitment academy that this, part our scouting strengthen continued As in our success sustainable. ensure the this we’ve is to

a is is Same true committed we’re right And build a our presence continuing that more women’s confident process, game. ever Marc the firmly women’s in just sport coach the positive to our on constant the we’re While than of We head team. building new season we’re start under to track. made to our Skinner.

operational enable a prospects teams retrenching. over and hand built investment on-field in in by goes time continued and a our strong we’ve and underpinned It’s business about spending at been always with robust able facilities. showing revenues that not optimism is to confidence years been hand the invest accident to commercial Our that summer our football model ourselves. generate clubs when our This many, many we’ve reflects we have many this model an that

inflation remains confident as years we’re challenges, the and exacerbated by transfer while and our faces However, the a financial football, pandemic. that clear impact in material caused by strength, relative wages of it major fees, of whole,

are of Global ever, all own UEFA engagement as game. We sustainability strong with record as by of evidenced demand to the the recent Premier rights broadcasting deals content. and levels the greater at working live international League, for committed and financial club as our domestic promote and ECA robust with is levels to football

on or digitizes, is growing international want given We live together with preserve and domestic There vibrant, interest its be the rights as healthy, North this part for America growth most renewals, sport. the importantly, football be world optimistic the coupled to expansion. of providers, magic increased fans Manchester of the the our And will United significant appeal a autumn, upcoming of European pyramid, to potential regarding of at notably working we with further and the also can remain OTT and sports in our that continue and remaining governing bodies, forefront in enhance game. to the club no own, succeed

them to club, Richard in we the activities. over Thank an forward months commercial those a you. for our to now update objectives, on to I’ll pursuing ahead. look As and and are years hand you committed we

Richard Arnold

of you, everyone return towards the emerge you tentatively joining to and for and club Thank global normality as the reopening steps began Ed, in from The UK marked to pandemic. this incremental thank morning. the the beginning fourth to took us operations quarter

the country adapt As our tradition combined model, a Ed that of extraordinary This of of and overcome operating of ability excellence was welcomed nearly for back the resumed XXth across has season April May our on highlighted, home with reopening for match Old XX,XXX the UK is Though Megastore and a operations appeal it’s of to a ultimately July, opening enduring club full and a last resilience circumstances. our stood Trafford sustainability delayed against supporters club’s Fulham. few half. a the and Manchester century United, nonessential of shops a result the for with the into the weeks XXth a the of

café, also during the Our quarter. and operations resumed tour museum

Trafford to the for the full Old welcome home our crowds it’s current will full fixtures preseason capacity assumption increased two Following balance and of games, the for crowds current season. for our we opening continue that

‘XX-’XX of the of also in know the leading We we pandemic the end, again for program, indicator circumstances sell-out we’re of also remains Xth Nevertheless, year. signups. opening generally season. health return events experienced held club summer of in us in season. including once season. To through UK priority in the note However, in have this beginning good membership the anticipation Executive UK has the record the June, brisk and regulations our place premier of the of we demand a sale strong experiencing a this sold this by been both another sporting Care that matches and that full important that pandemic. encouraged evolves. subject the largest start very ticket season four the scale multiple for year success It’s public is And of staff this UK, boxes league suites to and internationally, the as tickets rounds to commenced a out. our before of a associated this of for demand, fans, was

Matchday to been who made being by payments not fans. furlough has staff, been we have and would As documented, played staff goodwill impacted decision to the pay casual to without games

ensure committed with remain wage, We’ve staffing paramount this As Matchday our will and UK effective this season. club including the government us. for employees, guidelines, that operations beginning diligent. have we of our change The supporters protocols while the our staff health have has we recently above remain all our levels. and helped coordination living And safety with will real in paying Matchday altered we staff, normalized, also to casual believe maintained

ensure that will park maintain remain We expect and experience, building fan players for Behind support protected. protocols the appropriate and our capabilities we to mobile Matchday scenes, our a automation, launched more continue to amongst other to initiatives. ticketing protocols on COVID contactless continue car recently staff refine our to

activity on the directly operations up, Matchday invest As continues to pitch. to our sponsorship our ramp also normalized to our post-pandemic, ability contributing

global we During globally. touch on partner both to few announced and small surpassed whilst we to new the the partnership Xst. sponsorship take officially the recent sport challenges new kit launched July it’s of appeal this Manchester and and the thank partnership shirt we the testament headwinds, quarter, and our sponsorship during launch And first from to partnership, macro in launch just team moments, TeamViewer significant weeks mid on In opportunity and No our all like of a principal our the highlights this for of given I’d global completing strength six in feat, partner pandemic. our impressions March, a power I’ll a few United. the

pandemic. three activations, in This physical onset global of fourth the partners despite event virtual partners, with United event our value our of took fiscal both China and For towards since significant year, In physical the as first to hybrid fans. steps partner a to typical events. and we we of the we partner hosting was activations I the quarter, Love deliver for the continue full resumption renewed absence partnerships, the physical

to grand in in expect entertainment with opening events, opening To-date, of partners, and our from to appeal. been continue given coordinated offer Dreams was public our to May. official has very event hybrid particular success the including Theatre their post-pandemic, components the This positive. digital We feedback center Beijing of

partnership is and with entertainment. deepen supporters engagement China fans restaurant, interactive retail expected our other museum, by to our China Harves in Our in offering

later additional locations ‘XX. Shenyang in China Changsha, Shanghai and open expect followed We fiscal in by in to

own to and the club-wide media, we’ve given we May, of Matchday our team rate absence the digital around Through platforms digital fans to our and and XXX prior on to global CRM the to invest, we year-on-year year. drive our With broaden marketing, growing to world. has XX% app, to mobile increased analytics. in digital social interact operations, in and and added data new active up our continue now we our strengthened platforms of our media our our to interactions, continue also communicate our ended XX% features continue daily social reporter iterate transformation. we social to digital not a connections additional resources further this initiatives and as continue part million platforms, through XXX supporters in media new prioritize we club’s ability acceleration with and driving quarter, in On users. just engagement presence technology, enhancements with of online but increase The several on Turning with ongoing

our traffic official recently know app, drove quarter, podcast e-commerce launched year kit XXXX number Once and with improved multiple our In setting screen directly sales this sales Apple. our we average prior e-commerce both, on fan full podcast records. records one functionality the increases all trends club order the those a has that year visitors channels. launches engagement fiscal to this within become in previous strong unique E-commerce our value. also our and club with kit surpassed of set XXXX, We new again, podcast the year three to season our for football

and our of we’re international some We’ve featuring more identity, of we extraordinary past better partner helped our our about to rollout new enhanced season, foundation kit, this have developed undertaken national year. our prior the world fiscal of in to shirt Overall, global the few Whilst rooted provide spoken firmly and remain proud work the home community. issues, access capabilities in our year to campaign that we them local the I that fans like by efforts we’re issues confident to such this causes these continue feel our TeamViewer as With around moments help pandemic, issues, globally take exacerbated use we the the make by this to life that once new surpassed again. connected important and record levels club. on may, the and to ‘XX-’XX pandemic platform their continue If impacts. address learnings content to than to the the we’ll ever platforms and these our to highlight supporters use We’ll to racism. to also real continue throughout will I’d local, with a

coordination week-long persist the in in worldwide with League boycott continues to highlight During to social participated a quarter, the club, Premier global that media in the football. all clubs discrimination

Red celebrate our easily their As which launched of rich the ‘All part ‘See with online. our fans provided mechanism to Red’ also All importantly, we our Equal’ and to of campaign, and fans players history, calls behavior contribution on diversity the to ethnic more initiative, report discriminatory a

results for to club, outlook upcoming turn Cliff call our this dedication to and to that, I’ll details sport. in the to our quarter With Cliff? toxicity CFO, year. Baty from a we our our now fiscal remain financial eradicate As discuss steadfast review our fourth help of the over

Cliff Baty

Thank by expectations COVID-XX pandemic, speak to you results, I’ll you, talk through now year. remain the upcoming the I’ll current our our fiscal Richard. and impacted fiscal which for

a indicated, hopeful, we the As current or And by COVID-related be guidance guidelines any for the providing are upcoming impacted we in as not disruption. are result, fiscal further UK, EBITDA Richard given not cannot revenue forward revenues certain our though that year. will be we

of of year, ‘XX-’XX the to for from This the prior the you full have million, season £XXX.X been the impacted, to related than year. both the Total fiscal by reduced revenues £XX.X Adjusted period I’d million a including Turning down that million fans in impact £XX.X prior now was comparisons completion year million. to champions from revenues owing absence wages season the due closed the doors. full pandemic, like results. the both the was behind of played as well league EBITDA lower were this £XX and uplifts. to as increased remind year, year-on-year

‘XX-’XX to July down XXXX. of prior million. carryover results, the commercial the were UEFA to no than the League summer of Champions to million of League impact COVID-related revenues match and £XXX.X revenues a Matchday subsequent closed reflecting by year, relate £XX Turning were revenues £X.X the million, e-commerce. fixtures prior with to in million, in year fees sponsorship £XX.X for key year behind participation contract all final, Merchandising the were lower into total majority reduction Broadcasting revenues were Megastore and £X.X of property XXXX of £XX.X the and million, items increase partially revenues of and the revenues the million the million, £XXX.X played The year due were offset due of coupled the to recognize Europa the progression million, licensing £XXX.X to August and strong tour million, and due variations. income. ancillary for the growth XX-season of £XXX.X an the membership being matches The Matchday to the doors. this final home season mostly and closure

the million. contracted U.S. £XXX.X which for were participation were increased relative a disciplined for by of in finance for throughout that I costs. XX.X%, of economic accounting accounting is XX, the than from non-cash also includes discretionary to XX% due rate reflects off U.S value, need This to the closed U.S. of will dollar tax highlight for costs increasing to which million, million excluding portion not means, the corporate benefits we purposes, goodwill Depreciation as of loss and £XX.X XXXX, exchange deferred This made like a higher million, given income the is Net U.S the primarily rate income approach amortization UK tax expenses, XX%. any doors, assets, prevailing player rate. a now see includes the which future to UK £X.X created million. the unhedged rate to amortization, the total any write unusually foreign fiscal write-off. was in higher year. reflecting million non-cash This could caused assets partial deferred on Please down the debt. non-cash wages depreciation up tax of due our a movement corporation would charge for The rate note £XX.X above the the £XX.X reduced and by playing is favorable credit, year together to of the statement. to million, a £XX.X year and of our Moving write-off April tax tax our of year. expenses has with Operating they Other increase reversal U.S. rate from payments write-off COVID-related million will to costs reduction any figure the £XX.X the the primarily year. Europa tax the £XX.X an reduction behind operating League, by in prior Champions staff League above for to wages formal this UK wages, large have accounting tax

June, the the to end cash to increase year. of in million sheet. now credit XQ in £XX.X Turning reflects our prior the This balance £XX cash of the At year. were up facility compared £XXX.X million this revolving million, balances of drawdown of

year-end with denominated for cash on a year, million million were seasonal a further the for of to not period. July. around was that £XX.X prior of CapEx favorable the decrease impact cash the revenues million, compared does exchange was collected higher due U.S FYXX foreign debt balance Net Our of XX% balances debt. the reflect the £XXX.X to dollar combined movements £XX.X ticket FYXX in Player the

to cash In facilities. £XXX committed we access liquidity, terms have undrawn of million of

now for to the our Now, providing year ‘XX, adjusted any or EBITDA of given uncertainties guidance, revenue fiscal we’re outlook turning COVID.

initial full increased, season following of two the on revenues will home are return with hopeful, the the that Matchday we significantly of fans. crowds, matches success be However, based this

for significant not do revenues, we tour For again summer a FYXX. have commercial

the confident operations. the start the we’ve with outlook in a cycle, clubs. a growth new prize just allocation in money of our for future are we In to commercial seen UEFA However, broadcasting, small

of to which costs, increase full Matchday -- we’d squad, of in around return reflects window. expect following expected the the are terms are Other In prior transfer with to summer the operations. wages increase to the XX%, also over year increased the by investment expected increase expenses

committed that, current amortization million With Corinna. million. back Finally, our the in fiscal CapEx approximately ‘XX with year £XX net costs over £XXX of turn is I’ll to call player

Corinna Freedman

Cliff. Thank you,

would call will Starting we in the quarter up fourth hold a like the we fiscal XXXX, with our second alert to your and conference questions, open we change to Before earnings to you reporting. to quarters. calls review

For the issue a we only. will first and release third quarters, press

for the you current you which And For will over the thank email quarter Allison? address Investor for interest continued for in available future will for back and can quarter, our United. Manchester I our that, with remain ir@manutd.co.uk. operator every we submit We via your your questions, your questions. sincerely however, to call Relations at turn

Operator

Thank you.

now Siew today We begin ahead session. will with your come Please the BNP from question question. our And of go [Operator first Instructions] will question-and-answer Exane Xian Paribas.

XianSiew

taking for Thanks my question. Hi.

we like directionally? there. levels, we I you expect about XXXX Ronaldo guess, seems revenues impact commercial And maybe his So, commercial congrats know and -- on it revenues, that talk Should guiding but sale is marketing to awareness? shirt or think it be it boost if Can I think how not levels, do the Cristiano of just about well. about or on even you’re versus, the momentum signing as pre-COVID you to in maybe terms above

CliffBaty

take I’ll the impact hand you then finance Cristiano. -- asked, for wider Cliff. initial it’s Xian, first of to finance I’ll Richard the the Hi over and question

sort have last as do for as you’ve to forthcoming our referenced, commercials, would indicated, think, really way terms summer I got no it, to at summer this of the for is look season, the we was of ‘XX-’XX. allow fact tour, you’ve no pre-COVID which effective also year. What tour be best be would in

a which if low-double-digit you be be as So, of place a take is of similar we expect revenues, the so sort in off that, effects were pre-COVID. we’d to --

RichardArnold

of the then, impact and signings. point around just And the on Cristiano summer

it’s not his do make very description to that the results update too activity any visible. immediate arrival, impact are where or of are in and to is we be them pitch today we to providing on there of his results any of presenting effects off-pitch as in effect and include terms the We’ll and Just where providing related clear, in and early the Cristiano. we’re Obviously, we do. an next as guidance terms to

not terms where information in of the at We’re providing to stage on we’re quarter. current this up

XianSiew

that’s And been just there’s some helpful, Okay. lockdowns, other There’s been and demand some over recent one thanks, more issues in China. been choppiness, there sectors. there’s -- on on

you’re seems could and lockdowns on fans any impact are for evolve? touched Maybe you. how well there like things and it’s understand, maybe help how from And there us engagement You all? with at going just that is seeing Chinese

RichardArnold

Yes.

looking So, I been the has lockdown, in that in outcomes of mean, obviously, an the terms received. here, effective year at there we’re

much better to me think I months. the people informed give that in there how that’s last than XX are exactly on out rolled you guidance

It’s and we we things the the Tmall point a partnership immediately obviously, where number and we’ve in fans are year, not reflected the merchandise, allude of relationship family, for just that’s that’s and up partnership then of view, way The that’s of adjoining fans have engaging to successful items, part Youku Square. any Tiananmen of particularly, very adidas of indeed for a been need that with number also, terms of location, but number and flows And its in China. followed how by on terms how Harves that have digital a been the very that that’s in terms to alluded previously, out to. integrated in as a our In in terms in sit fans of A, that there large of through, from satisfying us. received, of and

to fans. I’m see terms great terms incredibly of there engagement building economic and the situation, us. part of So, enhancing that back the have in really with it’s an and on bouncing it’s and of made have important the for we strides in world been pleased

Operator

Jefferies. ahead. Our from question go come will of Randy next Instructions] Konik [Operator Please today

RandyKonik

arrival signing a Thanks his Back I guys. and quarter-end. the that Hi, on know post lot. is Cristiano, Yes.

qualitative understand Anything engagement be gave potentially you of or helpful. statistics you anything quantify to if of give the you what around things. So, just give with app metrics or a us I you. around not But, on to results has going some whether of -- it’s perhaps. I quarter aspects look qualify what can sales, impact impact his to different on a want kind be quantify of has not been your us, you there’s but at, some know have very what gave website, us can what share kit his talk you team, like that areas the you would kind been Just et cetera? can color

RichardArnold

just statistics quarter Yes. I to include of the the none and updates I we of Cristiano. date before, the so season pre-season post-commencement all mean, reiterate of activities, any said what provided the around of specifically start, to the

pitch positive, incredibly of the least that, been on place has think, Cristiano the the describe around but much activity focus in terms not as to name. I a

provide. In commercial the signings activity, seen the But the set be analysis again, in terms similar we’ll in as effect results we quantitative see of I a the all next of the said more we’ve that over terms it’s of for next update, been positive providing and you summer. positive. And of indeed course,

RandyKonik

utilized Like, trying him your Got type or sign in commercial think your on the partners about up him squad? you. whatever and use relative to or think your his And to being likeness this are prospective the you to do to you want disproportionally you players how disproportionately other star as about I utilize partners commercial drive of generational want, brand? with company, you his not if to ability or commercial then, mean, able segment,

RichardArnold

us final ability that deliver terms a relates are again, and in with collectively as for touched that work job the one of this, line, the individually to single think, to club, and generate players commercial the assigned as are And is pitch. virtuous club players exclusively of to you’ve do running perhaps is, on of much My which us the the team to them. we possible as our cycle. a we view operations signed how in income both of their in I every the sustain on all that

make, a we’re fuel others, very again into activity we signing sports whilst on effect known a in well-run well-renowned positive the putting some fan positive effect industry. So, better And every have have do. a That’s are engagement, we engine. and much than on the

a any of good to our and to single make is But, commercial signing that on And after the job signing be the on this player players comes wrong. doing the We’re then that maximizing afterwards. opportunity pitch particularly opportunity deliver maximizing in of impact, a early focus they one us. to sure out terms their would

RandyKonik

how post-XXXX, or we happen? make it’s think happen? that a the I a to normal, then when summer back long it’s early, do going I’m decision make you to just planning we about to get to there’s And Okay. do lastly, think decision tour a when guess, I to how not said you you summer try be? have early stages not? When that tour -- definitively just to no And Cliff, do know just will summer for XXXX, do is finalized as that to curious, about that

CliffBaty

Thanks, Randy.

of because actually, July clarify just Xst the June. about to Just end I us for -- the to from the was gone FYXX, runs that talking so of

as already play we’ve very class tour. would whilst summer from typical matches very, had in couple different cetera, a of this And summer. So, we that’s the et UK, a we did

tour, that of end to have commercial off sort take the we sort to giving really because commercial looking a have we you might commercial for to the view at conversation, the of previous pre-COVID one, and sort in to that posted you times, underlying amount from numbers where indication, looking I’m back of of at guys when revenues then summer So, pre-COVID you area, the and a last get up. didn’t

In terms which which returns planning for which us. season, next -- summer, for of FYXX is be what would actually

hand Richard. that. So, bit a He more about to can talk I’ll over just

RichardArnold

the for tours season. objective the Yes. forthcoming And, pre-season Randy, primary the is of team to prepare

certainly So, typically a that’s through as something we multiyear but that the is basis year. go on more planned evolves

preparing and to in But look for what’s there’s the that evaluating But, quite we’re up be season, the versus carefully And terms at open preseason on pandemic. in travel how preparation. pluses situation succeeding we going we ahead As alternatives. best of to offseason in the staying are where we’ll of for monitor prepare. year countries again, activity, respect and next the terms of pandemic at factoring on the with terms to in us home we develops the in minuses will what’s and the point how

As think of is certain we abroad in whether certainly I from sit here now, far it’s possible. traveling terms

Operator

and this earnings also United’s today. conference the conclude And Manchester now it may question-and-answer disconnect attending will session do Ladies you We lines. presentation gentlemen, your call. you for conclude thank quarter and the will today’s fourth

Manchester United (MANU) 17 Sep 212021 Q4 Earnings call transcript