Good day, 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. Before we begin, we would like to inform everyone that this conference call will include estimates and forward-looking statements, which are subject to various risks and uncertainties that could cause actual results to differ materially from these statements. Any such estimates or forward-looking statements should be considered in conjunction with the cautionary note in our earnings release regarding forward-looking statements and risk factors discussions in our filings with the SEC. Manchester United Plc assumes no obligation to update any of the estimates or forward-looking statements. I will now turn the call over to Ed Woodward, Executive Vice Chairman of Manchester United. Please go ahead, sir.

Thank you, Operator, and thank you, everyone, for joining us today. With me on the call as usual are Cliff Baty, our CFO; and Hemen Tseayo, Head of Corporate Finance. As we look back at the fourth quarter and indeed the four months since our last earnings call, we are pleased that the Club has made excellent progress on a number of fronts. In May, we won the UEFA Europa League, our third trophy of the season having earlier won the Community Shield and the League Cup, and of course, as Europa League Champions, we qualified for Champions League this season. We are also pleased about our Chelsea business done during the summer bringing in three top players, Lindelof, Lukaku and Matic. Moreover, we also agreed new contracts with several players including, Carrick, Zlatan Ibrahimović, Romero and Valencia, together with extending two of our young stars, Joel and Andreas Pereira. We believe we’ve improved the balance and depth of our squad and are well placed to challenge for trophies. We had a fantastic tour to this U.S. this summer, which aided our pre-season preparations. Squad is gelling well and we’re pleased with the progress José has made to the squad, as shown in the early games of the season including last night Looking at our 2017 full year results, I am pleased to say that we once again set new records by generating higher revenues, EBITDA and operating profit than we have ever done before as all of our businesses showed year-over-year growth. We announced 12 sponsorship deals, including nine global partnerships, one regional, one financial service and one MUTV international deal. As we reached to more mature profile for our sponsorship business, we see higher levels of revenues each year being subject to renewal considerations by our partners. Once…

Thanks, Ed, and hello, everyone. I’m going to talk through our results for the fiscal year ended 30 June, 2017. For fiscal 2017 year-on-year comparisons have been driven by the following key themes. The impact of non-qualification to the Champions League; secondly, the new domestic and international Premier League deals. In terms of the headline figures, total revenues for the year were up 12.8% to £581.2 million, with adjusted EBITDA are up 4.1% to £199.8 million, giving an EBITDA margin of 34.4%. Profit for the period was £39.2 million, compared to £36.4 million in the prior year. Turning to the key items in the financial statements, commercial revenues are up £7.2 million to £275.5 million, driven by the increase in retail, merchandising, apparel and product licensing revenues. As Edward mentioned, this is primarily due to growth in the Megastore revenues, as well as the full year contributions from adidas agreement, which commenced on the 1st of August, 2015. Broadcasting revenues are up £53.7 million, due to the new Premier League broadcasting rights agreement, together with our success in the UEFA Europa League. Matchday revenues are up £5 million, due to the playing two more home games in the year, as well as record sales of match-by-match executive seats. During the year, total operating expenses, excluding depreciation and amortization were up 17.9%, including wages up 13.5%, primarily due to increase in first team salaries, following investment in the playing squad. It is worth noting that ‘16, ‘17 player wages did not include any salary uplifts in connection with Champions League qualification. Other operating expenses increased 29.3%, due primarily to the impact of playing more games in the year, as a result of progression in domestic and European tough competitions, as well as adverse foreign exchange movements. Excluding these foreign exchange movements,…

Thank you, Mr. Baty. [Operator Instructions] And your first question will come from John Janedis of Jefferies. Please go ahead.

Hi. Good morning. This is actually Brian Paturzo on for John. Maybe the first question for Ed, so as we think about ESPN and CBS both deciding to launch direct-to-consumer live sports applications, we think this furthers the narrative that the stream rights for live sports will become increasingly more valuable. So as you think longer term, given updated view on how the UEFA and EPL could look at better monetize stream rights in the next round of renewals. And do you think that new non-traditional players like Facebook and Amazon could potentially enter the next?

Yeah. Hi. Absolutely, I think, they will enter the mix. I think anecdotally there was strong interest in the last cycle and we are hearing that around the Premier League Table but also, as -- you asked the question about UEFA, we are also hearing that from a European perspective as well in terms of interest in the Champions League in Europe rights. But, I think, the wider picture you have to look, what’s happening elsewhere at the moment, because obviously there aren’t any clear European sales to these kind of partners at the moment. But you look at the interest that Facebook and Amazon had on the bid for the IPL rights, anecdotally sounds like very big numbers for the Indian cricket. Secondly, Amazon has taken over the Thursday Night streaming from Twitter for NFL. And then, thirdly, the MLS deal with Facebook, I think, is very interesting to broadcast 22 games in the regular season. So I do think, we are going to see an increasing engagement from these -- and we would welcome the interest. I think it’s going to be increasingly important to digitally engage with fans and we think we can be complementary to partners like this coming up.

Yeah. Thanks very much. Then, our second question maybe for Cliff. I know you touched on this in your remarks, but can you provide little bit more color around how MANU’s passed to the Champions League qualification will impact its market pool distribution and any clarity on what impact that might have in terms of the quantity of the distribution? Thanks.

Thanks, Brian. Yeah. As I mentioned, because we qualified through winning the Europa League, we do not share in the heart of the market pool. So this explains how that works. The market pool was split into two. Half of that pool is distributed to the four teams from England to qualify in accordance to their league position. So, if you win the league, you have 40%. If you come fourth, you get 10%. So, the example, if you finish third, the previous season, qualify for the Champions League, you get 20% of that market through finishing third and roughly, that would workout at about £10 million that way. So, in terms of looking at, what we will make from the Champions League this year. Clearly, it’s performance dependent, but we’ve always had said, it’s between £40 million and £50 million is roughly there and we will be £10 million less than that because we miss out on that pool.

Okay. Thanks very much.

Thank you.

The next question will be from Omar Sheikh of Credit Suisse. Please go ahead.

Thanks. Good morning, everyone. Just a couple from me, first, maybe Ed, you mentioned on the sponsorship that we should expect lower growth rates going forward than you’ve seen in the past. I just wonder whether you could talk a little bit more about, how you see this sponsorship market generally right now in terms of what we should be expecting on renewal rates and how you are positioned in that market, that will be helpful? And then also maybe on e-commerce, you mentioned that you’ve seen strong growth driven in the U.S. by, I think, you changed the supplier for operating your website. I just wonder whether there is any sort of wider, sort of implications to the other markets, where you can do perhaps the same thing?

Okay. So the first question, view of the market from a sponsorship perspective. As I said in the call earlier, the script, the overall market continues to go up in terms of an industry for sports sponsorship. So the backdrop is from a macro perspective is good. But what I’m trying to communicate is, as the business gets bigger and the number of deals that are up for renewal increase over time, there is larger number of deals that have to be done just to stand still, whether they’re renewals or new deals. So, yes, we still believe there is growth and that’s partly underpinned by our renewal rates. So I said in the script that we have industry leading renewal rates and we’ve done a lot of analysis around that and that is the case. But we still are looking closely at our product, understanding the digital and social needs, the trends towards that from our partners, and so we’re tuning and looking at the way we can activate with them. And in terms of how we’re positioned, we continue to strongly believe that we are about as well positioned as anybody in this industry. So, again, we’re not saying the business is going to shrink, we’re saying that, the big growth rates we’ve had in the past maybe a bit more measured just because of the size of the business. Second question, e-commerce, yeah, it’s a really interesting question. I mean, so we carved out the U.S. with Fanatics and I think there is a lesson here, and it even something is as simple as you call a shirt or Jersey or a shirt, and how you communicate, how you’re focused on the local market and tuning it for that audience in a way that gives the best chance for sale. And I think, we are looking at how that can be replicated in other key markets that we have. So, the growth that we’ve experienced was fantastic in the U.S. and we think it’s largely because of that local approach.

And sorry, add on that point, when did the Fanatics, as your relationship with Fanatics start, was it in the quarter or was it earlier in the year?

It was earlier in the year, yeah, started...

Earlier in the year. Okay. Great. Super. Thanks a lot.

Thank you.

Your next question will come from Alex Mees of JP Morgan. Please go ahead.

Good morning and congratulations on a good year and also good start for season. And just three questions for me please. Firstly on the comments you made at about sponsorship renewals. I wonder if you can give us any indication of what that rate of renewal is I suspect you won’t, but it’s worth asking the question and also just on renewal pricing, whether you expect to see increases in value of sponsorship agreements, when you renew them? Secondly, with regard to the guidance, I wonder if you can just help me understand the key assumptions with regard to your on-field performance. I would assume that you are assuming that you finished third in the Premier League because I think that is your customary approach, but I just wonder what your base assumptions are with regard to the Champions League? And then, finally, Cliff, I wonder if you can just give us some outlook for net debt, given that it did decline fairly significantly during the year?

Okay. First one, you predicted accurately Alex, I’m not going to answer the first question around the rate of renewals, but as I echo, we are up there as the industry leader on this. The second question, it is a price times volume game and the prices are going up like everything in football to be honest. So we continue to benefit from price increases. But, as I said, it’s more renewal question and just simplifies the business. And with regards to the guidance question on playing performance, the range that we set out there encapsulates the various finishing positions within the Premier League and from a Champions League perspective. It’s the same across all of the -- all the cups, which is, of course, a final assumption. Cliff, do you want to comment to that?

Yes. All right. Just in terms of net debt, look the main drivers of net debt and we’ve said, obviously, you see the EBITDA, but the main driver of net debt can be our CapEx. You see we’ve mentioned at the end of this transfer window, we’re currently sitting at £95 million, I’m not going to forecast what that number is going to be for the reasons I’ve said. So, with the EBITDA guidance that we’ve given and then with £95 million of the major expenditure in terms of CapEx, you can see that likely to generate some cash this year.

Excellent. Thanks, Cliff. Thanks, Ed.

Okay.

And the next question will be from Bryan Kraft of Deutsche Bank. Please go ahead.

Hi. This is actually Clay Griffin on for Bryan this morning. Good morning.

Okay.

Given the elevated cost in transfer market in Europe this summer and Ed’s position now on the UEFA Board, just how would you characterize the willingness of clubs, so maybe revisit or revise your financial fair player rules.

Good question. And I think there has been a lot of press about this already and it’s -- the rhetoric isn’t just coming from clubs, the rhetoric is coming from UEFA and also from the European Club Association. So, I think, the willingness is that to look at it closely to make sure that the rules are being abided by, and obviously, penalties are looked at. So, there is nothing concrete is going on at the moment, but I do think there is a noise level that has increased since August.

Well, I guess, just as a follow-up, are there any kind of structural reforms that you all will be advocating for, I guess, not just in the EPL, but just kind of across Europe, when it comes to the transfer market?

Structural reform, no, not really. I mean, it’s -- it broadly works within the sort of structure that we have around us from an EU perspective if that makes sense. So, it’s -- as an industry and as a market, we don’t think it has major issues. Any other questions?

No. That’s great. Thanks very much.

Okay. Thank you.

And ladies and gentlemen, this will conclude our question-and-answer session. And we will also conclude the Manchester United earnings conference call at this time. We thank you for joining today’s presentation. At this time, you may disconnect your lines.