Mitchells & Butlers Plc · LSE:MAB
Mitchells & Butlers — Investor Presentation (February 2013)
19 slides from Mitchells & Butlers's investor presentation, Feb 8, 2013
Slide 1: Mitchells & Butlers: Food for thought
Mitchells & Butlers Food for thought 8 February 2013 Alistair Darby Chief Executive 1
Slide 2: Agenda
Agenda Background on Mitchells & Butlers Recap of results and recent trading Review of M&B fundamentals Conclusion 2
Slide 3: Background on M&B
Background on M&B Demerged from Bass/Six Continents in 2003 Largest UK managed restaurant and pub company 1,600 restaurants & pubs nationwide 130m meals and 420m drinks sold p.a. £3.8bn asset base: 85% freehold Long term securitised debt finance High quality estate heavily focused on eating out 3
Slide 4: Long term sales trends
Long term sales trends £24k 55% £22k 50% 45% £20k 40% £18k 35% £16k 30% £14k 25% £12k 20% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 AWT (LHS) Food Mix (RHS) Consistent food focus and growth in sales 4
Slide 5: Solid results during period of change
Solid results during period of change Income statement (52 weeks) FY 2012 FY 2011 52 wks £m 52 wks £m Retained Estate: Revenue 1,855 1,762 5.3% Operating profit* 297 288 3.1% Disposed operations - 6 Total operating profit* 297 294 1.0% Interest* (135) (138) Profit before tax* 162 156 3.8% Earnings p
Slide 6: Recent trading and outlook
Recent trading and outlook Like for like sales growth LFL sales up 4% over the festive 2.5% 2.1% season 2.0% Challenging January post 1.5% holidays and snow 1.0% 1.0% No significant change to economic environment 0.5% -0.1% -0.3% Operational execution is key 0.0% -0.5% FY 12 Wk 1-8 Wk 1-14 WK 1-17 F
Slide 7: M&B: fundamentals
M&B: fundamentals 1. High quality freehold estate 2. Winning brands and formats 3. Highly engaged retail teams 4. Scale at corporate, brand and unit levels 5. Strong balance sheet with secure asset backing Strong foundations on which to build 7
Slide 8: M&B fundamentals: 1. High quality freehold estate
M&B fundamentals: 1. High quality freehold estate 85% freehold c. 45% in London or South East £3.8bn asset base Annual valuation c. £90m of maintenance capex One of the highest quality pub estates in the UK 8
Slide 9: Case study: Country pubs
Case study: Country pubs Price / Quality Premium Village Pub & Country Dining Kitchen (39) (81) Vintage Inns (194) Customer Demographics Over 300 classic country pubs 9
Slide 10: M&B fundamentals: 2. Winning brands and formats
M&B fundamentals: 2. Winning brands and formats Industry-leading brands & operating formats Meeting guest needs across the market Leveraging brand strength Ability to move with market trends Three quarters of brands & formats developed through in-house innovation Household names and well-loved brand
Slide 11: M&B brands and formats
M&B brands and formats Village High Pub & Miller & Kitchen Carter Harvester Crown 27 Toby 205 Carveries Vintage Inns 147 39 118 194 Food as % of sales 26 81 Alex 38 Sizzling 47 Browns Premium Pubs Ember All Bar One Country 220 Dining 130 Town Centre & Community Nicholson’s Metropolitan Professionals
Slide 12: Case study: Harvester
Case study: Harvester 205 restaurants nationwide Salad & grill menu Family, healthy, choice, affordable Responds well to TV, radio and press advertising
Slide 13: M&B fundamentals: 3. Highly engaged retail teams
M&B fundamentals: 3. Highly engaged retail teams 65% Increased front line 60% labour and training 55% Investment in amenity Improved: 50% Guest satisfaction 45% Guest recommendation Employee engagement 40% FY 2011 FY 2012 Guest satisfaction Net promoter score Improved guest focus throughout the orga
Slide 14: Case study: Miller & Carter
Case study: Miller & Carter Cooking Skill & Raw product Service / Environment Expertise Engagement from field to fork = guest recommendation 14
Slide 15: M&B fundamentals: 4. Significant scale
M&B fundamentals: 4. Significant scale Significant corporate scale: Purchasing : 130m meals and 420m drinks Investing in IT infrastructure Significant brand scale National brand advertising Social media presence Attractive partnership opportunities Significant unit scale: Average weekly takes £23k O
Slide 16: M&B fundamentals: 5. Strong balance sheet
M&B fundamentals: 5. Strong balance sheet FY 2010 FY 2011 FY 2012 Property, plant and £3,693m £3,848m £3,848m equipment book value Group net debt £2,302m £1,870m £1,841m Net debt : EBITDA 5.1x 4.7x 4.5x Interest cover1 2.1x 2.1x 2.2x FCF DSCR (covenant 1.1x)2 1.6x 1.5x 1.6x Long term debt financing
Slide 17: More to do
More to do LFL sales below major peers Inconsistent returns on capital Triennial pension valuation Ongoing business transformation focused on guest service Opportunity to build on strong foundations 17
Slide 18: Priorities for the year ahead
Priorities for the year ahead Successful execution of established strategy Guest service Brand development Operational excellence: safe, efficient Proactive response to cost inflation (especially food) Focus on returns on expansionary capital Triennial pension valuation A unified business intent on
Slide 19: Mitchells & Butlers
Mitchells & Butlers Food for thought 8 February 2013 Alistair Darby Chief Executive 19
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