Mitchells & Butlers Plc · LSE:MAB
Mitchells & Butlers — H1 2012 Earnings Presentation
33 slides from Mitchells & Butlers's earnings presentation, May 18, 2012
Slide 1: Half Year Results – 18 May 2012
Half Year Results – 18 May 2012
Slide 2: Bob Ivell, Executive Chairman
Bob Ivell Executive Chairman
Slide 3: Tim Jones, Finance Director
PEOPLE LOVE TO EAT AND DRINK WITH us Tim Jones Finance Director mitchelle 2) & Butlers
Slide 4: Income statement
Income statement 28 weeks ended 7 April 2012 H1 2012 H1 2011 £m £m Retained Estate: Revenue 969 912 6.3% Operating profit 138 136 1.5% Disposed operations - 5 Total operating profit* 138 141 (2.1%) Interest* (70) (78) Profit before tax* 68 63 7.9% Earnings per share* 12.5p 11.3p 10.6% * Stated befor
Slide 5: Like-for-like sales growth vs market
Like-for-like sales growth vs market 5.0% Moving annual total like-for-like sales growth 4.0% 3.0% 2.0% 1.0% 0.0% Wk1 Wk3 Wk5 Wk7 Wk9 Wk11 Wk13 Wk15 Wk17 Wk19 Wk21 Wk23 Wk25 Wk27 M&B Peach Tracker Note: The chart shows MAB retained estate like-for-like sales & Peach Pub Tracker sales on a moving ann
Slide 6: Drivers of LFL food and drink sales
Drivers of LFL food and drink sales Food Drink 7.0% 1.4% (3.7%) 6.0% Mix & 5.0% 4.8% Range 1.3% (0.7%) Volume 4.0% Mix & Volume 2.9% Range 3.0% LFL Price 2.0% + 3.4% LFL 1.0% Price + 2.2% 0.0% Total LFL sales growth of 2.7%
Slide 7: Retained Estate: EBIT movement
Retained Estate: EBIT movement +£1m (£3m) +£4m (£12m) +£5m +£22m £138m £136m H1 11 H1 12 (£13m) (£2m) Returns Opening Returns Opening NMW, duty, Food, Employment Trading costs costs CRC, rates energy inflation FY 11 capex H1 12 capex
Slide 8: Retained Estate: net operating margin
Retained Estate: net operating margin +0.1% (1.3%) 14.9% H1 11 14.2% +2.1% (1.4%) H1 12 (0.2)% FY11 & FY12 NMW, duty, Food, energy Employment Trading capex CRC, rates inflation
Slide 9: Exceptional items
Exceptional items H1 2012 H1 2011 £m £m Profit / loss on asset disposals - (3) Pensions curtailment charge - (13) Bid defence (6) - Restructuring and reorganisation IT infrastructure (7) - Support operations (7) - Operating exceptionals (20) (16) IAS19 pensions finance charge (6) (4) (26) (20) Tax c
Slide 10: Brand roll-out
Brand roll-out Number 70 of sites 60 50 40 30 20 10 0 H1 H2 H1 H2 H1 H2 H1 FY 09 FY 10 FY 11 FY 12 Conversions New sites • On track to deliver a total of c.55 new sites and conversions in FY 2012
Slide 11: Brand roll-out returns
Brand roll-out returns Overall EBITDA return of 17% on FY11 & FY12 investments Number opened Achieved in H1 2012 EBITDA ROI%* Freehold acquisitions 8 14% Package lease acquisitions 9 14% Single site lease acquisitions 18 26% Conversions 7 15% • Brand roll-out focused on new openings going forward •
Slide 12: Group cash flow
Group cash flow H1 2012 H1 2011 £m £m EBITDA 198 199 Working capital / non cash items 8 (28) Maintenance capex (48) (46) Trading Cash Flow 158 125 Net interest paid (63) (69) Tax (10) (8) Deficit pension contributions (20) (20) Free Cash Flow 65 28 Expansionary capex (42) (53) Disposals 3 417 Except
Slide 13: Group net debt
Group net debt Apr 12 Sep 11 Apr 11 £m £m £m Securitisation debt (2,207) (2,226) (2,257) Cash & other 136 137 152 Securitised net debt (2,071) (2,089) (2,105) Cash 207 219 185 Group net debt (1,864) (1,870) (1,920) Net Debt : EBITDA* 4.6x 4.7x 4.9x * Ratio calculated using previous 12 months’ EBITDA
Slide 14: Outlook
Outlook • Consumer environment remains challenging • Cost inflationary pressures expected to ease marginally in H2 • On track to open c. 55 new sites and conversions in FY12 • FY12 is a 53 week accounting year • Additional week trading profit • Cashflow timing impact
Slide 15: Key messages
Key messages • Resilient financial performance in challenging conditions • LFL +2.7% • EPS pre-exceptionals +10.6% • Operating margin 0.7 ppts lower due to cost pressures • Business transformation programme underway and on track • Continue with disciplined brand rollout, focused on new site acquisit
Slide 16: Bob Ivell, Executive Chairman
Bob Ivell Executive Chairman
Slide 17: Agenda
Agenda • Board recruitment • CEO • Non-executive directors • Business change agenda • Organisational change • Business development • Brand development
Slide 18: Organisational change
Organisational change Organisation Ways of working: Culture change Benefits structure redesign WOW trials & communication tracking Define and Implement new Define and commence the organisation implement new cultural change structure operations Identify and track the journey including that is fit for
Slide 19: Organisation structure redesign
Organisation structure redesign Design principles Guest centric Simple, scalable & cost effective Agile & responsive Clear accountabilities Focus on high performance
Slide 20: Organisation change: Results so far
Organisation change: Results so far • Brand Operations Directors have ‘top to bottom’ accountability for their brands • Marketing and HR alignment to brands • Functional teams now focused on guests • Localised activity to deliver improved customer experience • Investment in guest service training, k
Slide 21: Ways of working (WOW) pub trials: Objectives
Ways of working (WOW) pub trials: Objectives • Make our teams guest-focused with supporting controls • Engage and listen to feedback from guests and team • Empowered general managers and management teams to take accountability for performance • Driving like-for-like sales growth
Slide 22: Ways of working (WOW) pub trials: Video
Ways of working (WOW) pub trials: Video
Slide 23: Ways of working (WOW) pub trials: Initial results
Ways of working (WOW) pub trials: Initial results Performance against control group Our People Team motivation +20% Our Guests Overall guest satisfaction +2.6% Likely to revisit +3.7% Our Profits LFL sales growth +0.5% LFL profit growth +4.0% Refine & roll out over the next 12 months
Slide 24: Business development: Upgraded IT infrastructure
Business development: Upgraded IT infrastructure • Network upgrade • Outlet capacity increased 50 times • Corporate capacity increased tenfold • Free wi-fi roll out • Enabler for future developments • Hand-held terminals, NFC payment technology • Customer loyalty and retention schemes • Cloud-based
Slide 25: Business development: Digital marketing platform
Business development: Digital marketing platform FY 2009 FY 2010 FY 2011 H1 2012 Facebook fans 28k 266k 480k 627k Mobile subscribers 77k 530k 834k 960k Online bookings - 30k 694k 655k • 100% growth in mobile website visits • Email sign-up increased 47% • Target of 1.5m online bookings this FY
Slide 26: Business development: Other innovation
Business development: Other innovation • Industry-leading innovative approach to energy saving: • Char-grills and cellar heat recovery provides free hot water • Ambient air cellar cooling • LED lighting • Glycol timers • Carbon trust recertification 2012 • Overall energy saving projects delivered RO
Slide 27: Ongoing brand development – Harvester
Ongoing brand development – Harvester 200th Harvester: Peterborough National TV advertising
Slide 28: Ongoing brand development – Browns
Ongoing brand development – Browns Bluewater: £54k AWT Birmingham: £35k AWT Newcastle: £60k AWT
Slide 29: Ongoing brand development – Miller & Carter
Ongoing brand development – Miller & Carter Epping: £48k AWT Hockley Heath: £29k AWT
Slide 30: Progress so far
Progress so far • £10m of annualised savings • 90 headcount reduction • Guest-centric structures • Re-investment into service to deliver top line growth • WOW trials – initial positive results • Robust and flexible IT infrastructure • Wi-fi roll out • Innovation in digital media & energy usage • Ong
Slide 31: Conclusion
Conclusion • Resilient performance • Business change programme continues – early stages • Ongoing brand innovation • Disciplined brand rollout • Well positioned for future growth
Slide 32: From the 1912 Mitchells & Butlers manager's handbook
From the 1912 Mitchells & Butlers manager’s handbook: “…we feel how absurd it would be to subject managers to hard-and-fast rules for all circumstances; rules which might fail, and more than likely would fail, just at the most awkward moment. We prefer to leave it to our managers, who are on the spo
Slide 33: Q&A
Q&A Half Year Results – 18 May 2012