Manchester United PLC

Preliminary Results to 31 July 2004

27 September 2004

Preliminary Results – July 04Preliminary Results – July 04Striving to be the best…..on and off the pitchStriving 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

Preliminary Results – July 04Preliminary Results – July 04Financial highlightsFinancial 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

£36.0mConsistent financial performance

Preliminary Results – July 04Preliminary Results – July 04DividendsDividends

• 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

Preliminary Results – July 04Preliminary 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

Preliminary Results – July 04Preliminary 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, JV’s etc. 1.1 (0.4)

Profit before tax 27.9 -29% 39.3

Strong operating performance – PBT impacted by player trading

Preliminary Results – July 04Preliminary Results – July 04 Revenue analysisRevenue analysis

Media£62.5m

(£56.2m)

Matchday£61.2m

(£70.6m)

Commercial £45.3m

(£46.2m)

£m £m2003 Revenue 173.0

Less one-off items in 2003ECL Final (3.5)Nike – yr 1 of contract (3.5) (7.0)

166.0MatchdayDomestic cup gate receipts (3.6)ECL – reduced no’ games (4.4)Other 2.1 (5.9)MediaFAPL TV 0.9ECL – new contracts 3.0Domestic Cup 2.4 6.3CommercialVodafone / Platinum 1.1Other 1.5 2.6

2004 Revenue 169.0

Revenue down but improved mix benefits Operating Profit

Preliminary Results – July 04Preliminary Results – July 04 Revenue mixRevenue mix

Underlying revenue from FAPL up

104.7

23.0

1.9

114.9

29.9

1.3

129.9

27.6

8.5

7.0

136.8

25.0

7.3

0

20

40

60

80

100

120

140

160

180

200

2001 2002 2003 2004

One-off factors

Cup

ECL

FAPL

£m

Preliminary Results – July 04 Preliminary Results – July 04 Operating profit before depreciation and Operating profit before depreciation and amortisation upamortisation up

Staff costs£76.9m

(£79.5m)

Operating Profit

£58.3m (£57.3m)

Other Operating Charges£33.9m

(£36.2m)

£m2002/03

55.1Exceptionals 2.2ECL Final (1.3)Nike – yr 1 of contract

(3.5)

52.5Contribution from domestic cup 0.3Contribution from ECL 0.2Staff costs 2.6Other revenues net of costs 2.72003/04

58.3

Operating profit margin 34%

Preliminary Results – July 04 Preliminary Results – July 04

Operating profit before depreciation and Operating profit before depreciation and amortisation by competition amortisation by competition

Premiership and other activities

£30.0m (£26.5m)

ECL£23.6m (£22.3m)

One off factors£0m (£2.6m)

Domestic cup£4.7m (£3.7m)

UCL contribution 40%

Preliminary Results – July 04 Preliminary Results – July 04 Player trading - disposalsPlayer trading - disposals

Profit & Loss

Net cash rec’d/(paid)

in year

Outstanding

asset £m £m £m

Barthez (5.2) (2.6) -

Beckham 0.8 11.9 -

Veron 0.8 5.9 6.3

Butt 1.5 (0.3) 2.0

Cole / Yorke 0.8 0.8 -

Stam - - 12.0

Forlan (1.9) - 1.4

Others 0.1 0.3 0.1

(3.1) 16.0 21.8

Cash generated by player disposals

Preliminary Results – July 04 Preliminary Results – July 04 Player trading - acquisitionsPlayer trading - acquisitions

Capitalised in

the year

Cash paid in the year

Outstanding

creditor £m £m £m

Djemba Djemba - 3.1 0.2

Bellion 0.7 2.3 0.1

Ferdinand 1.5 2.3 0.3

Ronaldo 12.0 4.9 7.1

Kleberson 5.8 5.4 0.4

Heinze 6.8 3.9 2.9

Saha 12.5 12.5 -

Smith 7.1 6.6 0.5

Others 4.2 3.8 2.0

50.6 44.8 13.5

Reinvesting in the squad

Prior years

Current year

Preliminary Results – July 04 Preliminary Results – July 04 Cash flow summaryCash flow summary

2004 2003 Average 99-04

£m £m £m Operating cash flow 58.8 57.9 49.2

Player trading (net) (28.8) (7.9) (22.0)

Tangible fixed assets (net) (4.7) (4.2) (12.7)

Cash inflow before tax, dividends & interest

25.3

16.8

14.5

Cash balances at year end 36.0 28.6

Net Assets 173.4 156.4

Strong cash generation & balance sheet

Preliminary Results – July 04Preliminary Results – July 04Stadium expansion update

● Develop North East and North West quadrants of the stadium

● Increase capacity by 7,800 to 75,600 from start of2006/07 season

● Costs estimated to be £39 million

● Planning application submitted 10 September

● Expected cash payback of 6 years

Largest club stadium in England

Computer image of North East Quadrant

Preliminary Results – July 04Preliminary Results – July 04Our Vision……to 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

Maintaining Playing Success

Number Contracts Expire

30/6/05 30/6/06 30/6/07 30/6/08 30/6/09 30/6/10

Goalkeepers 3 2 - 1 - - -

Defenders 7 1 1 2 - 3 -

Midfielders 9 - 3 2 3 1 -

Forwards 6 - 1 1 1 2 1

25 3 5 6 4 6 1

Includes Rooney

Continual process of squad development

Preliminary Results – July 04 Preliminary Results – July 04 Media RevenuesMedia 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

Preliminary Results – July 04Preliminary Results – July 04Commercial Focus

• 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

TREATING OUR FANS AS CUSTOMERS

WORKING WITH THE RIGHT PARTNERS

DEVELOPING OUR OWN MEDIA CONTENT

Preliminary Results – July 04 Preliminary Results – July 04 Treating Fans as Customers

Customer Focused Initiatives

• 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

Customer Relationship Management

• Collected 2.5 million fan records

• Filling data gaps

• Segmentation of fan base

• Tailored communication

• Appropriate products and service

• Contractual improvement of data quality

Preliminary Results – July 04 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

Preliminary Results – July 04 Preliminary Results – July 04 Working With The Right Partners/Media Content

Vodafone

Audi

Re-alignment of sponsorship structure

Media Content

• £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

Shirt Sales (000’s)

03/04 02/03 Home 406 1,741Away 631 521Third 259 300

1,296 2,565

Preliminary Results – July 04 Preliminary Results – July 04 Working With The Right Partners - Nike

Europe23%

(22%)

UK55%

(57%)

ROW22%

(21%)• 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

Geographic split of sales

Strong 2nd year of global partnership

Preliminary Results – July 04Preliminary Results – July 04Performance summaryPerformance 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

Appendices

Match Day Turnover down 13%Match Day Turnover down 13%

Matchday Catering

£4.1m (£3.4m)

Membership & Travel

£3.1m (£3.8m)

Other(including

tours) £4.8m(£6.8m)

Domestic Cup games

£3.6m (£6.8m)

Executive & Season Ticket

£28.5m (£27.8m)

League Match*£12.2m

(£11.4m)

European games*

£4.9m (£10.6m)

* Includes hospitality

Media Turnover up 11%Media Turnover up 11%

Domestic Cupgames

£3.7m (£1.3m)

UK Radio£0.8m (£0.8m)Overseas

£2.7m (£2.1m)

MUi£1.5m (£1.4m)

ECL TV£20.0m

(£17.0m)

UK Domestic TV equal share

£11.1m (£10.4m)

UK Domestic TV live/merit

£22.7m (£23.2m)

Commercial Turnover down 2%Commercial Turnover down 2%

Other£3.2m (£2.4m)

MU Finance£2.2m (£1.8m)

Non matchday catering

£3.5m (£3.1m)

FAPL Sponsors

£1.1m (£1.3m)

Platinums£5.5m (£5.2m)

Vodafone£9.0m (£8.2m)

Nike£20.8m

(£24.2m)

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.

Number of games played in 2003/04Number of games played in 2003/04

First Half Second Half Year Last Year

Home Games

FAPL 12 7 19 19

ECL 3 1 4 8 FA Cup - 2 2 3

Carling Cup - - - 3

15 10 25 33

Other events 3 1 4 4 18 11 29 37

Away Games FAPL 11 8 19 19

ECL 3 1 4 8

Carling / FA Cup 4 2 6 3

18 11 29 30

Total MU Games 33 21 54 63 TV FAPL

Live Sky 10 4 14 16

PPV 4 2 6 6 Highlights 9 7 16 14

23 13 36 36

Capital Expenditure Since FlotationCapital Expenditure Since Flotation

£,000Stadium developments 1991-2003 93,2192004 – Quadrants development 2,820

96,039

Carrington training ground (phase I & II) 21,268

United Trading Estate 9,125Land/property/car parks 12,5972004 – car parks 1,740 23,462

Other (plant, machinery, fixtures & fittings) 36,0042004 – LED hoardings etc 3,477 39,481

Total to 31 July 2004 180,250