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Not Just a Football Club…….

Manchester United PLC Results for Year to 31 July 2002 30 September 2002 Not Just a Football Club……. Not Just a Football Club……. Agenda Introduction Peter Kenyon Group results for the year Nick Humby From fans to customers David Gill Strategies to build on Peter Kenyon

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Not Just a Football Club…….

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  1. Manchester United PLCResults for Year to 31 July 200230 September 2002Not Just a Football Club……

  2. Not Just a Football Club……. Agenda • Introduction Peter Kenyon • Group results for the year Nick Humby • From fans to customers David Gill • Strategies to build on Peter Kenyon on the global brand

  3. Not Just Winning…….Creating Value • Turnover up 13% to £146.1m (2001 £129.6m) • Profit before tax up 48% to £32.3m (2001 £21.8m) • Dividend increased by 55% to 3.1p (2.0p) with a final normal dividend of 1.46p per share and a special dividend of 1.00p per share.

  4. Not Just Winning…..Strong Revenue Growth 31/7/02 % 31/7/01 £000 change £000 Match day 56,253 9% 51,763 Media 51,948 66% 31,237 Commercial 26,493 -3% 27,411 Merchandising 11,368 -41% 19,158 Total turnover £146,062 £129,569 Growth over last year 13%

  5. Not Just Winning……Increasing Dividends 2002 2001 (restated) £000£000 Turnover 146,062 129,569 Profit before tax 32,347 21,778 Tax (7,308) (7,399) Profit after tax 25,039 14,379 Effective tax rate 22.6% 34.0% Earnings per share 9.6 5.5 Dividend per share 3.1 2.0 Dividend cover 3.1 2.8

  6. Not Just Winning…..Increasing Profits 2002 2001 £000 £000 £000 £000 Operating profit 33,929 31,680 Player amortisation (17,647) (10,173) Profits on player disposals 17,406 ( 241) 2,219 (7,954) 33,688 23,726 Exceptional costs (864) (2,073) 32,824 21,653 Associates/JV’s (504) (602) Interest 27 727 Profit before tax 32,347 21,778

  7. Not Just Winning…….Managing Costs 2002 % 2001 £000 increase £000 Turnover 146,062 13% 129,569 Gross profit 130,377 21% 107,449 Wages & salaries (69,999) 40% (50,002) Other operating expenses (26,449) 2% (25,767) Operating profits 33,929 31,680 Gross margin 89% 83% Wages a % of turnover 48% 39% Operating margin 23% 24%

  8. Not Just Winning….. GoodContribution from Each Stage of ECL Profits increase by 34% over last year

  9. Not Just Winning……Managing the Cash 2002 2001 £000 £000 Cash from operations 42,806 50,882 Net transfer fee (12,083) (43,310) Fixed asset investment (13,923) (7,802) 16,800 (230) Dividend & interest (5,197) (4,467) Tax (9,433) (7,377) Other - 274 Net cash flow 2,170 (11,800) Net cash/debt on 31 July 933 (1,237)

  10. Not Just Our Fans…...Our Customers Executive Box Seats Increasing Value as Customers Increasing Number of Fans Season Tickets MU Finance Customers MU TV Subscribers Members Museum/Tour Visitors ManUtd.com Unique Users Purchase of Replica Shirts UK Fans Overseas fans Match day Commercial Media

  11. Not Just Our Fans……Valued Customers of Our Partners PRINCIPAL SPONSOR OF MANCHESTER UNITED THE OFFICIAL BEER OF MANCHESTER UNITED OFFICIAL BETTING PARTNER OF MANCHESTER UNITED OFFICIAL INTERNET PARTNER OF MANCHESTER UNITED OFFICIAL IMAGING PARTNER OF MANCHESTER UNITED OFFICIAL SOFT DRINK SUPPLIER TO MANCHESTER UNITED THE OFICIAL RADIO STATION OF MANCHESTER UNITED OFFICIAL GROOMING PARTNER OF MANCHESTER UNITED OFFICIAL BUSINESS SOLUTIONS PARTNER TO MANCHESTER UNITED

  12. Not Just Fans……MU Finance Customers

  13. Not Just UK Fans……Developing New International Products Nike • Merchandising business transferred to Nike on 1st August 2002 • Minimum guarantee for each of the 1st 4 periods to 31 May of £20.7m • First 12 months to 31July 2003 worth £24.2m and year to July 2004 £20.7m • Failure to qualify for Europe would reduce guarantee by £2m p.a. • Break point for Nike after 6 years • Confident start with launch of new home shirt • New deals - JSV, Central Trading and Sport Etail assigned to Nike

  14. Not Just UK Fans……Developing New International Activity Reds Café • Licence trademarks for launch of chain of family restaurants in Asia • First 3 sites identified US Tour • Promote Manchester United in US ahead of next season • Four games (Seattle, Los Angeles, Boston and New York)

  15. Not Just Football Tactics……Football Strategy • Contracted Beckham, Keane, Stewart, O’Shea in addition to 8 last year • 19 players under contract for 3 seasons or more, average age 26 • Secured renewal of Manager for 3 years • Acquired Rio Ferdinand for £29.3m • Developing Academy to produce new 1st team stars • International alliances to identify and develop new young players

  16. Not Just Football Tactics……Media Strategy • Manchester United live games averaged 3 million UK viewers • Manchester United PPV games attract 68% more than FAPL average buys • Media rights acquired for Club use • Delayed FAPL rights • ECL archive & web rights (03/04) • Overseas rights sold in 161 territories last year • Key media contract renewals ahead

  17. Not Just Football Tactics…….Business Strategy In summary:- • Achieving good results • Maintain strong operating cash flows • Secure a stable and successful playing set up • Invest in academy to bring on next generation • Managing player costs around 50% of turnover level • Develop quality partnerships to drive new revenue streams • Deliver ambitious CRM targets • Exploit appealing media product • Dividend policy focused on rewarding shareholders when the company is successful • Not just a football club …… a global brand

  18. Appendices

  19. Match Day Turnover up 9 %

  20. Media Turnover up 66%

  21. Commercial Turnover Down 3%

  22. Average Revenue Per Match

  23. Capital Expenditure Since Flotation £,000 Rebuilding of west stand 10,300 Refurbishment of south and east stands 5,790 Acquisition of United trading estate 9,125 Rebuilding of north stand 18,650 North stand fit-out (including museum) 17,106 Land/property/car parks 10,381 Carrington training ground (phase I & II) 20,942 South stand executive suites 5,304 Stadium expansion - east & west stands (incl. Megastore) 33,279 Ticketing/membership building 1,992 Other (mainly plant, machinery, fixtures & fittings) 33,320 Total to 31 July 2002 166,189 Expenditure on future major projects (estimate) 3,000 169,189 Net cash received from shareholders (flotation/placing) 23,425 Funded via cash generated 145,764 169,189

  24. Profit on Disposal of Players Gross transfer fee receivable £m £m Stam 16.0 Cole 6.3 Yorke 1.8 Greening 2.0 Wilson 1.5 Macken 1.0 Other 0.6 29.2 Less associated costs of disposals (2.9) Net proceeds of disposals 26.3 Less amortised player registration costs Stam 6.2 Cole 2.6 Other 0.1 (8.9) Profit on disposal of players £17.4

  25. New Dividend Policy Per share Total Dividend £m cover Normal dividend 2.10p £5.455 4.60 Special dividend 1.00p £2.598m Total dividend 3.10p £8.053 3.10 Less interim dividend 0.64 Dividends payable on 22 November 2002 2.46

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