Manchester United plc (NYSE:MANU) Q4 2022 Earnings Conference Call September 22, 2022 8:00 AM ET Company Participants Corinna Freedman - Head of Investor Relations Richard Arnold - Chief Executive Officer John Murtough - Football Director Collette Roche - Chief Operating Officer Philip Lynch - Chief Executive Officer of Media Victoria Timpson - Chief Executive Officer, Alliances & Partnerships Cliff Baty - Chief Financial Officer Conference Call Participants Randy Konik - Jefferies Xian Siew - BNP Paribas O ...

Financial Performance - Total revenue for the fiscal year ended June 30, 2022, was £583.2 million, an increase from £494.1 million in 2021[173]. - Commercial revenue reached £257.8 million for the year ended June 30, 2022, compared to £232.2 million in 2021[170]. - Broadcasting revenue was £214.9 million for the year ended June 30, 2022, down from £254.8 million in 2021, impacted by COVID-19[171]. - Matchday revenue significantly increased to £110.5 million in 2022, compared to £7.1 million in 2021, as all matches operated at full capacity[172]. - Total operating expenses rose by 28.6% to £692.6 million from £538.4 million in 2021[339]. - Employee benefit expenses increased by 19.1% to £384.1 million, up from £322.6 million[339]. - Profit on disposal of intangible assets was £22.0 million, a 197.3% increase from £7.4 million in the previous year[339]. - Total revenue for the year ended June 30, 2022, was £583.2 million, an increase of £89.1 million, or 18.0%, compared to the previous year[340]. - Commercial revenue for the year ended June 30, 2022, was £257.8 million, an increase of £25.6 million, or 11.0%, over the previous year[341]. - Broadcasting revenue for the year ended June 30, 2022, was £214.9 million, a decrease of £39.9 million, or 15.7%, compared to the previous year[342]. - Matchday revenue for the year ended June 30, 2022, was £110.5 million, an increase of £103.4 million, or 1,456.3%, due to the return of fans[343]. - Total operating expenses for the year ended June 30, 2022, were £692.6 million, an increase of £154.2 million, or 28.6%, over the previous year[344]. - Employee benefit expenses for the year ended June 30, 2022, were £384.2 million, an increase of £61.6 million, or 19.1%, over the previous year[345]. - Amortization for the year ended June 30, 2022, was £151.5 million, an increase of £27.1 million, or 21.8%, over the previous year[347]. - Exceptional items for the year ended June 30, 2022, were a cost of £24.7 million, compared to £nil in the previous year[348]. - Net finance costs for the year ended June 30, 2022, were £62.2 million, compared to net finance income of £12.9 million for the previous year[350]. - Cash resources as of June 30, 2022, were £121.2 million, with access to undrawn revolving facilities of £200 million[354]. Revenue Breakdown - Total Commercial revenue for the year ended 30 June 2022 was £257.8 million[315]. - Total sponsorship revenue for the year ended 30 June 2022 was £147.9 million[316]. - The Premier League represented 25.1%, 35.9%, and 23.2% of total revenue for the years ended 30 June 2022, 2021, and 2020, respectively[310]. - The second largest customer, adidas, represented 13.1%, 15.7%, and 15.3% of total revenue for the years ended 30 June 2022, 2021, and 2020, respectively[310]. - Broadcasting revenue is derived from centrally negotiated domestic and international television rights, with income shared among Premier League clubs based on performance[246]. Audience and Engagement - The club's games during the 2021/22 season generated a cumulative audience reach of 2.9 billion viewers, averaging over 59.8 million viewers per game[166]. - Total social connections grew to over 220.8 million as of June 30, 2022, a 25.4% increase from 176.1 million in 2021[166]. - As of June 30, 2022, the company had over 220.8 million social connections, including approximately 75 million on Facebook, over 58.8 million on Instagram, and over 36.2 million on Twitter[266]. - For the 2021/22 season, the company generated over 2.8 billion interactions across all social media platforms[266]. - The company launched a free global mobile application at the start of the 2018/19 season, enhancing e-commerce functionality and user engagement[263]. - The mobile application includes features such as messaging, matchday audio streaming, and access to the Premier League archive collection, driving additional data acquisition[263]. - The company aims to deepen relationships with fans through a CRM database, enabling targeted communications and upsell opportunities[267]. - The digital media strategy includes localized content in multiple languages to enhance engagement with followers globally[261]. - MUTV is available in 230 markets globally, offering a variety of content including live football and behind-the-scenes coverage[268]. - The membership program saw over 276,000 members at the end of the 2021/22 season, a 95.7% year-on-year increase[273]. Sponsorship and Partnerships - The club has secured new partnerships, including a training shirt partnership with Tezos and a principal shirt partnership with TeamViewer, enhancing engagement through AR solutions[189]. - The company has developed a dedicated sales team to enhance sponsorship opportunities, focusing on larger global brands rather than regional partnerships[227]. - The company believes there is significant growth potential in financial services products, including credit and debit cards, as part of its commercial strategy[234]. - The company retains full control over its retail, merchandising, apparel, and product licensing, generating revenue from a wide range of products globally[237]. - The company aims to expand its e-commerce capabilities by improving digital shopping experiences and targeted merchandise offerings[244]. Community and Social Responsibility - The Manchester United Foundation has impacted over 75,000 young people through community projects and raised over £50,000 for charitable causes[289]. - The club launched the SEE RED campaign to confront racism and discrimination, promoting fan responsibility in reporting incidents[294]. - The club's equality, diversity, and inclusion strategies are embedded throughout its business operations[296]. - The club has frozen general admission season ticket prices for the 2022/23 season for the eleventh consecutive year to support fans[275]. Football Operations - Manchester United operates under FIFA, UEFA, and FA regulations, ensuring compliance with international and domestic football governance[208][209][210]. - The Premier League allows four teams from Manchester United to qualify for the Champions League, enhancing competitive opportunities[209]. - The club's football operations include a global scouting network and a focus on developing players through its youth academy[211]. - The men's first team participates in the Premier League, FA Cup, EFL Cup, and international competitions like the Champions League[212]. - The club's women's team aims to compete at the highest level in Europe, with players from the academy forming a core part of the team[220]. - Manchester United's football operations are supported by a team of over 225 individuals, including coaches, scouts, and medical staff[213]. - The company has enhanced its scouting infrastructure over the past 5 years, establishing a presence in all major footballing nations to improve talent recruitment[223]. - The youth academy has included a homegrown player in every matchday squad for the last 85 years, contributing to talent flow to the men's first team[221]. - The Under 18 men's team won a record 11th FA Youth Cup in May 2022, with the final attended by over 67,000 fans[222]. Infrastructure and Facilities - The company has invested significantly in its performance center, enhancing training facilities with advanced sports and science equipment to ensure players achieve peak physical condition[224]. - The club's commitment to enhancing the fan experience includes investments in facilities and premium seating at Old Trafford[180]. - The club's stadium, Old Trafford, has a capacity of 74,240 and welcomed back 10,000 supporters for the final home match of the 2020/21 season[271]. - Matchday revenue has been enhanced by restructuring stadium facilities, focusing on higher-priced hospitality options[275]. - The average attendance for home Premier League matches has exceeded 99% since the 1997/98 season, indicating high capacity utilization[272]. Compliance and Regulations - The break-even test result submitted in March 2022 was positive, indicating compliance with Premier League Profitability and Sustainability Rules[286]. - UEFA's updated regulations allow a larger deficit of up to €60 million over a three-year period, with specific financial criteria[282]. - UEFA's monitoring process includes breach indicators that trigger additional reporting requirements, ensuring financial compliance[278]. - Total fixed distribution amounts for the Champions League are €1.101 billion, for the Europa League are €255.8 million, and for the Europa Conference League are €188 million[251]. - The total market pool for the Champions League is €300.3 million per annum, while for the Europa League it is €139.5 million per annum, and for the Europa Conference League it is €23.5 million per annum[251]. - UEFA announced a total revenue shortfall of approximately €566 million due to COVID-19, representing 16% of total revenues, which will be recouped over five seasons from 2019/20 to 2023/24[255]. - A projected annual reduction of approximately 3.5% in distributions to clubs is expected through to the 2023/24 season[257].

Manchester United plc (NYSE:MANU) Q2 2022 Earnings Conference Call March 1, 2022 8:00 AM ET Company Participants Corinna Freedman - Head of Investor Relations Richard Arnold - Chief Executive Officer John Murtough - Football Director Collette Roche - Chief Operating Officer Victoria Timpson - Chief Executive Officer of Alliances & Partnerships Phil Lynch - Chief Executive Officer of Digital Products & Experiences Cliff Baty - Chief Financial Officer Hemen Tseayo - Chief Strategy Officer Conference Call Part ...

[Management's Discussion and Analysis of Financial Condition and Results of Operations](index=3&type=section&id=Management's%20discussion%20and%20analysis%20of%20financial%20condition%20and%20results%20of%20operations) This section analyzes the company's financial performance, highlighting revenue recovery, operating expense changes, liquidity, debt, and cash flows [General Information and COVID-19 Impact](index=3&type=section&id=GENERAL%20INFORMATION%20AND%20COVID-19%20PANDEMIC) Manchester United saw significant revenue recovery in 2021/22 due to fans returning to full-capacity stadiums, despite some match postponements from the Omicron variant - The company has developed a leading global sports brand with a community of **1.1 billion** fans and followers, attracting major global sponsors like adidas, TeamViewer, and Tezos[5](index=5&type=chunk) - For the 2021/22 season, Old Trafford stadium welcomed back fans at full capacity, a significant change from the prior period where matches were played behind closed doors[6](index=6&type=chunk) - The Omicron variant surge in December 2021 resulted in the postponement of two Premier League matches (one home, one away)[6](index=6&type=chunk) [Results of Operations](index=4&type=section&id=RESULTS%20OF%20OPERATIONS) The company's results for the three and six months ended December 31, 2021, show Matchday revenue recovery, offset by lower Broadcasting revenue and increased operating expenses [Three months ended 31 December 2021](index=4&type=section&id=Three%20months%20ended%2031%20December%202021%20as%20compared%20to%20the%20three%20months%20ended%2031%20December%202020) Total revenue for the three months ended December 31, 2021, grew 7.3% to £185.4 million, driven by Matchday revenue, offset by lower Broadcasting revenue and increased operating expenses Financial Performance for the Three Months Ended Dec 31 | Metric | 2021 (£ millions) | 2020 (£ millions) | % Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | **185.4** | **172.8** | **7.3%** | | Commercial revenue | 64.4 | 62.6 | 2.9% | | Broadcasting revenue | 86.4 | 108.7 | (20.5)% | | Matchday revenue | 34.6 | 1.5 | 2,206.7% | | **Total operating expenses** | **(179.7)** | **(138.6)** | **29.7%** | | Employee benefit expenses | (97.7) | (81.7) | 19.6% | - Matchday revenue surged by **£33.1 million (2,206.7%)** as all eight home games were played in front of a full capacity crowd, whereas all ten home games in the prior year quarter were behind closed doors[13](index=13&type=chunk) - Employee benefit expenses increased by **19.6% to £97.7 million** due to investment in the first team playing squad[14](index=14&type=chunk) - Exceptional items of **£10.0 million** were recorded, which included compensation to the former men's first team manager and coaching staff for loss of office[16](index=16&type=chunk) [Six months ended 31 December 2021](index=6&type=section&id=Six%20months%20ended%2031%20December%202021%20as%20compared%20to%20the%20six%20months%20ended%2031%20December%202020) Total revenue for the six months ended December 31, 2021, increased 10.7% to £311.9 million, driven by Matchday revenue, offset by lower Broadcasting revenue and higher operating expenses Financial Performance for the Six Months Ended Dec 31 | Metric | 2021 (£ millions) | 2020 (£ millions) | % Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | **311.9** | **281.8** | **10.7%** | | Commercial revenue | 128.8 | 122.3 | 5.3% | | Broadcasting revenue | 129.7 | 156.3 | (17.0)% | | Matchday revenue | 53.4 | 3.2 | 1,568.8% | | **Total operating expenses** | **(333.8)** | **(262.1)** | **27.4%** | | Employee benefit expenses | (186.2) | (153.6) | 21.2% | - Matchday revenue increased by **£50.2 million (1,568.8%)** as all thirteen home games were played in front of a full capacity crowd, compared to all fifteen home games being played behind closed doors in the prior year period[24](index=24&type=chunk) - Broadcasting revenue decreased by **17.0%** primarily due to playing nine fewer home and away games across all competitions, following the completion of the 2019/20 season competitions in the prior year period[23](index=23&type=chunk) - Employee benefit expenses increased by **21.2% to £186.2 million** due to investment in the first team playing squad[26](index=26&type=chunk) [Liquidity and Capital Resources](index=8&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) The company's liquidity is supported by operating cash flow, player sales, and borrowing facilities, with £87.4 million cash and £100 million undrawn facilities, covering key requirements - Primary cash requirements stem from player transfer fees, capital expenditure, interest payments, employee expenses, and dividends[32](index=32&type=chunk) - As of December 31, 2021, the company had cash resources of **£87.4 million** and access to **£100 million** in undrawn revolving facilities[33](index=33&type=chunk) - A semi-annual cash dividend of **$0.09 per share** was paid on January 7, 2022[34](index=34&type=chunk) [Cash Flow](index=10&type=section&id=Cash%20Flow) For the six months ended December 31, 2021, net cash inflow from operating activities decreased, with investing activities resulting in an outflow and financing activities providing an inflow Summary of Cash Flows for the Six Months Ended Dec 31 | Cash Flow Activity | 2021 (£ millions) | 2020 (£ millions) | | :--- | :--- | :--- | | Net cash inflow from operating activities | 32.1 | 61.3 | | Net cash outflow from investing activities | (83.4) | (90.7) | | Net cash inflow from financing activities | 28.4 | 59.2 | | Net (decrease)/increase in cash | (22.9) | 29.8 | - Net capital expenditure on intangible assets (primarily player registrations) was **£77.9 million** for the six-month period, a decrease from £86.6 million in the prior year[44](index=44&type=chunk) - Financing activities included a **£40.0 million** drawdown on revolving facilities and a dividend payment, compared to a £60.0 million drawdown in the prior year[45](index=45&type=chunk) [Indebtedness](index=11&type=section&id=Indebtedness) The company's principal debt includes $425 million senior secured notes, a $225 million term loan, and £100 million drawn revolving facilities, with all debt covenants met Principal Indebtedness as of Dec 31, 2021 | Instrument | Outstanding Principal | Maturity Date | | :--- | :--- | :--- | | Senior Secured Notes | $425.0 million | June 25, 2027 | | Secured Term Loan Facility | $225.0 million | August 6, 2029 | | Revolving Facilities (Drawn) | £100.0 million | April/July 2025 | - The company was in compliance with its consolidated EBITDA covenant of not less than **£65 million** as of December 31, 2021[48](index=48&type=chunk)[53](index=53&type=chunk) [Off Balance Sheet Arrangements & Contractual Obligations](index=13&type=section&id=OFF%20BALANCE%20SHEET%20ARRANGEMENTS) The company's off-balance sheet arrangements include £122.4 million in contingent transfer fees and £989.0 million in total contractual cash flow obligations as of December 31, 2021 - The maximum additional amount payable for contingent transfer fees was **£122.4 million** as of December 31, 2021[60](index=60&type=chunk) Summary of Contractual Obligations as of Dec 31, 2021 | Obligation Type | Total Contractual Cash Flows (£'000) | | :--- | :--- | | Debt obligations | 674,612 | | Lease obligations | 5,639 | | Purchase obligations | 308,778 | | **Total** | **989,029** | [Interim Consolidated Financial Statements](index=15&type=section&id=Interim%20consolidated%20financial%20statements) This section presents the interim consolidated financial statements, including profit/loss, comprehensive income, balance sheet, changes in equity, cash flows, and detailed notes [Interim Consolidated Statement of Profit or Loss](index=15&type=section&id=Interim%20consolidated%20statement%20of%20profit%20or%20loss) For the six months ended December 31, 2021, the company reported a net loss of £16.9 million, primarily due to increased operating expenses and unfavorable net finance costs Profit or Loss Summary for the Six Months Ended Dec 31 | Metric | 2021 (£'000) | 2020 (£'000) | | :--- | :--- | :--- | | Revenue | 311,901 | 281,822 | | Operating profit/(loss) | (4,761) | 21,373 | | Net finance (costs)/income | (17,126) | 19,723 | | **(Loss)/profit for the period** | **(16,941)** | **33,558** | | Basic (loss)/earnings per share (pence) | (10.39) | 20.60 | [Interim Consolidated Statement of Comprehensive Income](index=16&type=section&id=Interim%20consolidated%20statement%20of%20comprehensive%20income) For the six months ended December 31, 2021, the company reported a total comprehensive loss of £16.1 million, including a net loss of £16.9 million, partially offset by other comprehensive income Comprehensive Income Summary for the Six Months Ended Dec 31 | Metric | 2021 (£'000) | 2020 (£'000) | | :--- | :--- | :--- | | (Loss)/profit for the period | (16,941) | 33,558 | | Other comprehensive income, net of tax | 875 | 19,036 | | **Total comprehensive (loss)/income** | **(16,066)** | **52,594** | [Interim Consolidated Balance Sheet](index=17&type=section&id=Interim%20consolidated%20balance%20sheet) As of December 31, 2021, total assets were £1,365.9 million, with £812.3 million in intangible assets and £87.4 million cash, while total liabilities reached £1,119.1 million Key Balance Sheet Items | Metric | 31 Dec 2021 (£'000) | 30 June 2021 (£'000) | | :--- | :--- | :--- | | **Total Assets** | **1,365,858** | **1,260,310** | | Intangible Assets | 812,252 | 754,467 | | Cash and cash equivalents | 87,434 | 110,658 | | **Total Liabilities** | **1,119,113** | **987,798** | | Borrowings (Total) | 582,237 | 530,236 | | **Total Equity** | **246,745** | **272,512** | [Interim Consolidated Statement of Changes in Equity](index=19&type=section&id=Interim%20consolidated%20statement%20of%20changes%20in%20equity) Total equity decreased by £25.8 million from June 30, 2021, to December 31, 2021, primarily due to the £16.9 million net loss and £10.7 million in dividends paid - Total equity decreased by **£25.8 million** during the six-month period, from £272.5 million to £246.7 million[76](index=76&type=chunk) - The main contributors to the decrease in equity were the **net loss for the period (£16.9 million)** and **dividends paid (£10.7 million)**[76](index=76&type=chunk) [Interim Consolidated Statement of Cash Flows](index=20&type=section&id=Interim%20consolidated%20statement%20of%20cash%20flows) For the six months ended December 31, 2021, the company reported a net decrease in cash of £22.9 million, with operating inflow offset by investing outflow and financing inflow Cash Flow Summary for the Six Months Ended Dec 31 | Metric | 2021 (£'000) | 2020 (£'000) | | :--- | :--- | :--- | | Net cash inflow from operating activities | 32,069 | 61,271 | | Net cash outflow from investing activities | (83,402) | (90,690) | | Net cash inflow from financing activities | 28,483 | 59,180 | | **Net (decrease)/increase in cash** | **(22,850)** | **29,761** | [Notes to the Interim Consolidated Financial Statements](index=21&type=section&id=Notes%20to%20the%20interim%20consolidated%20financial%20statements) The notes detail accounting policies, revenue disaggregation, exceptional items, intangible assets, borrowings, debt covenants, and significant contingent liabilities [Basis of Preparation and Accounting Policies (Notes 2 & 3)](index=21&type=section&id=Basis%20of%20preparation%20and%20Accounting%20policies) The interim financial statements are prepared on a going concern basis, supported by £87.4 million cash and £100 million undrawn revolving facilities - The financial statements are prepared on a going concern basis, with management concluding the Group can meet its obligations for at least 12 months following the report date[83](index=83&type=chunk)[86](index=86&type=chunk) - As of December 31, 2021, the Group had cash resources of **£87.4 million** and access to **£100 million** in undrawn revolving facilities[84](index=84&type=chunk) [Revenue from Contracts with Customers (Note 6)](index=24&type=section&id=Revenue%20from%20contracts%20with%20customers%20(Note%206)) Revenue is disaggregated into Commercial, Broadcasting, and Matchday streams, with Broadcasting being the largest contributor at £129.8 million for the six months ended December 31, 2021 Revenue by Component for the Six Months Ended Dec 31 | Revenue Stream | 2021 (£'000) | 2020 (£'000) | | :--- | :--- | :--- | | Commercial | 128,773 | 122,314 | | Broadcasting | 129,755 | 156,302 | | Matchday | 53,373 | 3,206 | | **Total** | **311,901** | **281,822** | [Exceptional Items (Note 8)](index=26&type=section&id=Exceptional%20items%20(Note%208)) Exceptional items totaled £10.0 million, primarily comprising £9.1 million in compensation for a former manager and £0.9 million for a pension scheme deficit - A **£9.1 million** charge was recorded for compensation paid to a former men's first team manager and coaching staff for loss of office[113](index=113&type=chunk) - An additional **£0.9 million** was charged related to a deficit in the Football League pension scheme, based on the latest actuarial valuation[113](index=113&type=chunk)[114](index=114&type=chunk) [Intangible Assets (Note 17)](index=34&type=section&id=Intangible%20assets%20(Note%2017)) As of December 31, 2021, intangible assets totaled £812.3 million, including goodwill and player registrations, with £144.3 million in additions and £72.5 million in amortization Intangible Assets Breakdown as of Dec 31, 2021 | Asset Type | Net Book Value (£'000) | | :--- | :--- | | Goodwill | 421,453 | | Registrations | 385,505 | | Other intangible assets | 5,294 | | **Total** | **812,252** | - Additions to player registrations in the six-month period amounted to **£144.3 million**[144](index=144&type=chunk) [Borrowings (Note 26)](index=39&type=section&id=Borrowings%20(Note%2026)) Total borrowings as of December 31, 2021, were £582.2 million, including senior secured notes, a term loan, and drawn revolving facilities, with all debt covenants met Borrowings Breakdown as of Dec 31, 2021 | Instrument | Amount (£'000) | | :--- | :--- | | Senior secured notes | 312,318 | | Secured term loan facility | 164,734 | | Revolving credit facilities | 100,000 | | Accrued interest | 5,185 | | **Total** | **582,237** | - The Group has **£100 million** in outstanding loans and **£100 million** in borrowing capacity under its revolving facilities[177](index=177&type=chunk) [Contingent Liabilities and Contingent Assets (Note 31)](index=45&type=section&id=Contingent%20liabilities%20and%20contingent%20assets%20(Note%2031)) The company's contingent liabilities include £122.4 million in potential transfer fees and ongoing discussions with UK tax authorities regarding player-related tax matters - Maximum potential contingent transfer fees payable were **£122.6 million**, dependent on conditions such as player appearances, team success, and individual awards[196](index=196&type=chunk)[197](index=197&type=chunk) - The Group is in active discussions with UK tax authorities over player-related tax matters, which represents a potential future liability[199](index=199&type=chunk)

[Overview and Highlights](index=1&type=section&id=Overview%20and%20Highlights) This section details key management changes, new commercial partnerships, and significant expected growth in international Premier League rights revenue [Key Highlights](index=1&type=section&id=Key%20Highlights) The company announced a new CEO, Richard Arnold, and is actively searching for a permanent manager, while securing a new training kit partnership and anticipating a 30% growth in international Premier League rights revenue - Richard Arnold was appointed as the new Chief Executive Officer, effective February 1, 2022, with Ralf Rangnick serving as Interim Manager for the remainder of the season[1](index=1&type=chunk) - A new principal training kit partnership was announced with blockchain partner, Tezos[1](index=1&type=chunk) - The new Premier League rights cycle, commencing in 2022/23, is expected to grow international revenues by **30%**, with total international rights anticipated to exceed UK domestic rights for the first time[1](index=1&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) CEO Richard Arnold outlined a clear vision for winning and strengthening fan engagement, while CFO Cliff Baty highlighted robust Q2 revenue growth despite COVID-related match postponements - CEO Richard Arnold emphasized a clear vision and strategy to win, fostering a culture of excellence and strengthening the role of fans[2](index=2&type=chunk) - CFO Cliff Baty noted robust revenue growth of **7.3%** for the second fiscal quarter, despite the postponement of two matches due to COVID-19[2](index=2&type=chunk) [Financial Performance](index=2&type=section&id=Financial%20Performance) This section provides a comprehensive overview of the company's Q2 fiscal 2022 financial results, including revenue, EBITDA, net loss, and net debt analysis [Key Financials Summary](index=2&type=section&id=Key%20Financials%20Summary) For the second quarter of fiscal 2022, total revenue increased by 7.3% YoY to £185.4 million, primarily driven by a massive recovery in Matchday revenue, while Adjusted EBITDA decreased by 17.6% to £57.9 million, and net debt rose by 8.6% to £494.8 million Q2 & Six Months Fiscal 2022 Financials (£ million) | Metric | Three months ended 31 Dec 2021 | Three months ended 31 Dec 2020 | Change | Six months ended 31 Dec 2021 | Six months ended 31 Dec 2020 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Total revenue | 185.4 | 172.8 | 7.3% | 311.9 | 281.8 | 10.7% | | Adjusted EBITDA | 57.9 | 70.3 | (17.6)% | 69.1 | 91.1 | (24.1)% | | (Loss)/profit for the period | (1.4) | 63.9 | - | (16.9) | 33.6 | - | | Basic (loss)/earnings per share (pence) | (0.86) | 39.17 | - | (10.39) | 20.60 | - | | Net debt | 494.8 | 455.5 | 8.6% | 494.8 | 455.5 | 8.6% | [Revenue Analysis](index=3&type=section&id=Revenue%20Analysis) Total revenue for Q2 was £185.4 million, with Matchday revenue surging by 2,206.7% due to the return of fans, Commercial revenue growing 2.9% from retail, and Broadcasting revenue falling 20.5% due to fewer games played Revenue Breakdown for Q2 FY2022 vs Q2 FY2021 (£ million) | Revenue Stream | Q2 2022 | Q2 2021 | Change (%) | | :--- | :--- | :--- | :--- | | Commercial | 64.4 | 62.6 | 2.9% | | Broadcasting | 86.4 | 108.7 | (20.5)% | | Matchday | 34.6 | 1.5 | 2,206.7% | - Commercial revenue growth was driven by a **17.7% increase** in Retail, Merchandising, Apparel & Product Licensing, while Sponsorship revenue decreased by **6.9%** due to the expiry of a training kit deal[10](index=10&type=chunk) - The surge in the Omicron variant in December 2021 resulted in the postponement of two Premier League matches (one home, one away)[5](index=5&type=chunk) [Operating Expenses and Other Financial Items](index=4&type=section&id=Operating%20Expenses%20and%20Other%20Financial%20Items) Total operating expenses for the quarter increased by 29.7% YoY to £179.7 million, driven by higher employee benefit expenses and other operating costs related to full-capacity matches, alongside £10.0 million in exceptional compensation costs - Total operating expenses rose **29.7% YoY** to **£179.7 million**[11](index=11&type=chunk) - Employee benefit expenses increased **19.6%** to **£97.7 million** due to investment in the first team playing squad[12](index=12&type=chunk) - Exceptional items of **£10.0 million** were recorded, which includes compensation to the former men's first team manager and certain coaching staff for loss of office[15](index=15&type=chunk) - Net finance costs were **£7.5 million**, compared to net finance income of **£19.7 million** in the prior year quarter, due to unfavorable foreign exchange movements[17](index=17&type=chunk) [Cash Flow and Net Debt](index=5&type=section&id=Cash%20Flow%20and%20Net%20Debt) In Q2, the company experienced a net cash outflow from operating activities of £31.5 million, a significant shift from the prior year, leading to a decrease in cash and cash equivalents and an increase in net debt to £494.8 million - Net cash outflow from operating activities was **£31.5 million** for the quarter, compared to a **£1.0 million** outflow in the prior year quarter[19](index=19&type=chunk) - Net Debt increased to **£494.8 million** as of Dec 31, 2021, up from **£455.5 million** a year earlier[21](index=21&type=chunk) - The company drew down **£40.0 million** on its revolving credit facilities during the quarter[20](index=20&type=chunk) [Consolidated Financial Statements](index=9&type=section&id=Consolidated%20Financial%20Statements) This section presents the company's consolidated profit or loss, balance sheet, and cash flow statements for the period, highlighting key financial positions and movements [Consolidated Statement of Profit or Loss](index=9&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss) For the three months ended December 31, 2021, the company reported an operating profit of £5.4 million, significantly down from £48.5 million in the prior year, resulting in a net loss of £1.4 million compared to a £63.8 million profit previously Consolidated Statement of Profit or Loss (Three Months Ended Dec 31, 2021; in £ thousands) | Item | Three months ended 31 Dec 2021 | Three months ended 31 Dec 2020 | | :--- | :--- | :--- | | Revenue | 185,440 | 172,850 | | Operating profit/(loss) | 5,405 | 48,469 | | Net finance (costs)/income | (7,472) | 19,702 | | (Loss)/profit before income tax | (2,067) | 68,171 | | (Loss)/profit for the period | (1,402) | 63,828 | [Consolidated Balance Sheet](index=10&type=section&id=Consolidated%20Balance%20Sheet) As of December 31, 2021, total assets were £1.366 billion, slightly down from the prior year, while total equity decreased significantly to £246.7 million, and total liabilities increased to £1.119 billion Consolidated Balance Sheet Summary (in £ thousands) | Item | As of 31 Dec 2021 | As of 31 Dec 2020 | | :--- | :--- | :--- | | Total Assets | 1,365,858 | 1,381,600 | | Total Equity | 246,745 | 405,579 | | Total Liabilities | 1,119,113 | 976,021 | | Non-current borrowings | 477,052 | 471,026 | | Current borrowings | 105,185 | 65,114 | [Consolidated Statement of Cash Flows](index=12&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) For the three months ended December 31, 2021, the company reported a net cash outflow from operating activities of £31.5 million, an outflow from investing activities of £18.7 million, and an inflow from financing activities of £39.6 million, resulting in a net decrease in cash and cash equivalents of £10.6 million Consolidated Statement of Cash Flows (Three Months Ended Dec 31, 2021; in £ thousands) | Item | Three months ended 31 Dec 2021 | Three months ended 31 Dec 2020 | | :--- | :--- | :--- | | Net cash (outflow)/inflow from operating activities | (31,493) | (1,039) | | Net cash outflow from investing activities | (18,657) | (37,255) | | Net cash inflow from financing activities | 39,568 | 59,588 | | Net (decrease)/increase in cash and cash equivalents | (10,582) | 21,294 | [Supplemental Information](index=7&type=section&id=Supplemental%20Information) This section explains the company's use of non-IFRS financial measures, such as Adjusted EBITDA and Adjusted profit, and provides their reconciliations to IFRS equivalents [Non-IFRS Measures and Reconciliations](index=7&type=section&id=Non-IFRS%20Measures%20and%20Reconciliations) The company utilizes non-IFRS measures like Adjusted EBITDA and Adjusted profit to offer a clearer perspective on underlying performance, with Q2 Adjusted EBITDA at £57.9 million and Adjusted profit at £7.4 million - The company uses non-IFRS measures such as Adjusted EBITDA, Adjusted profit/(loss), and Net debt to provide insight into its operating performance and financial condition[25](index=25&type=chunk)[27](index=27&type=chunk)[30](index=30&type=chunk) Reconciliation of Net Loss to Adjusted EBITDA (Q2 FY2022; in £ thousands) | Description | Amount | | :--- | :--- | | (Loss)/profit for the period | (1,402) | | Adjustments (Tax, Finance, Amortization, etc.) | 59,349 | | **Adjusted EBITDA** | **57,947** | Reconciliation of Net Loss to Adjusted Profit (Q2 FY2022; in £ thousands) | Description | Amount | | :--- | :--- | | (Loss)/profit for the period | (1,402) | | Adjustments (Exceptional items, FX, etc.) | 10,739 | | Adjusted income tax expense | (1,966) | | **Adjusted profit for the period** | **7,396** |

Manchester United plc (NYSE:MANU) Q4 2021 Results Conference Call September 17, 2021 8:00 AM ET Company Participants Corinna Freedman - Head, IR Ed Woodward - Executive Vice Chairman Richard Arnold - Group Managing Director Cliff Baty - CFO Conference Call Participants Xian Siew - Exane BNP Paribas Randy Konik - Jefferies 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 list ...