Mitchells & Butlers Plc · LSE:MAB
Mitchells & Butlers — HY 2024 Earnings Presentation
32 slides from Mitchells & Butlers's earnings presentation, 2024
Slide 1: Half Year Results 2024
Half Year Results 2024 Mitchells & Butlers - Restricted
Slide 2: Strong performance across the period
Strong performance across the period Financial Highlights • Strong like-for-like sales growth of 7.0% - ahead of the market • Adjusted operating profit growth of 64% to £164m • Operating margin recovery to 11.7% • Cashflow before bond amortisation of £137m (HY 2023 £10m) Progress on strategic Priori
Slide 3: Financial Review HY 2024
Financial Review HY 2024 Tim Jones Chief Financial Officer Mitchells & Butlers - Restricted
Slide 4: Income Statement
Income Statement (before adjusted items) HY 2024 HY 2023 Movement 28 week 28 week % £m £m Revenue 1,396 1,282 +8.9% Operating costs (1,232) (1,182) Operating profit 164 100 +64.0% Interest (55) (58) Pensions finance charge (1) (1) Profit before tax 108 41 +163.4% Operating margin 11.7% 7.8% +3.9bps
Slide 5: Strong like-for-like sales as inflation falls
Strong like-for-like sales as inflation falls • Like-for-like sales growth of 7.0% • Broad-based growth across all brands • Volumes in marginal decline across the half, closer to pre- covid trends • Last 4 weeks, following Easter in both this year and last, like-for- like growth of 5.3% despite coro
Slide 6: Diverse portfolio of brands and locations
Diverse portfolio of brands and locations Premium Miller & Carter Browns Castle Nicholson’s Premium Country Pubs Estate Locations All Bar One Alex 23% City Centre Vintage Inns 25% Rural Drink-led Food-led Harvester 52% Suburban Ember Inns Toby Carvery High Street sites Suburban sites Stonehouse Valu
Slide 7: Adjusted EBIT movement
Adjusted EBIT movement +£10m +£60m +£30m +£15m £(48)m £(3)m HY 2023 FY 2023 openings FY 2024 openings Like-for-like trading Efficiencies Cost headwinds Energy HY 2024 £100m and remodels and remodels £164m Margin Margin 7.8% 11.7% Mitchells & Butlers - Restricted
Slide 8: Reduced cost inflation
Reduced cost inflation FY24 FY25 100 100 90 90 80 80 70 70 60 60 50 50 40 40 30 30 20 20 10 10 0 0 Food/Drink Labour Other site and Energy Food/Drink Labour Other site and Energy central costs central costs • FY 2024 overall cost inflation of under 3% anticipated, includes fall in energy cost – 80%
Slide 9: Strong cash flow
Strong cash flow HY 2024 HY 2023 £m £m Operating cash flow 238 172 Working capital movement 27 27 • Working capital inflow from strong Pension escrow return 35 - sales growth Capital expenditure (81) (98) • Pension escrow return of £35m from Main Plan Lease principal and interest (28) (37) • Lower c
Slide 10: Balance sheet strength
Balance sheet strength Acceleration in amortisation HY 2024 FY 2023 £m £m Assets Property, plant and equipment 4,114 4,086 ROU leases 316 327 Acceleration in amortisation Other 71 112 Non-current assets 4,501 4,525 Cash 179 194 126 Other 122 151 Total assets 4,817 4,802 Liabilities: Borrowings (1,26
Slide 11: Pensions
Pensions Both Main and Executive Plans now in buy-in Returns of surplus contributions • £35m received from Main Plan escrow in H1 FY24 • Up to £12m from Executive Plan escrow expected FY 2025 • Potential for further surplus value in Main Plan - DWP consultation on Defined Benefit scheme surplus unde
Slide 12: Strong performance across the period
Strong performance across the period Financial Highlights • Strong like-for-like sales growth of 7.0% - ahead of the market • Adjusted operating profit growth of 64% to £164m • Operating margin recovery to 11.7% • Cashflow before bond amortisation of £137m (HY 2023 £10m) Progress on strategic Priori
Slide 13: Phil Urban, Chief Executive Officer
Phil Urban Chief Executive Officer Mitchells & Butlers - Restricted
Slide 14: Sustained outperformance vs. the market
Sustained outperformance vs. the market Rolling four-weekly average like-for-like sales vs Coffer Peach Tracker • Like-for-like sales growth of 7.0% for the year • Outperformed the market by c.2.5ppts over the first half, as measured by CGA Business Tracker Mitchells & Butlers - Restricted
Slide 15: Strong progress across all areas of our balanced scorecard
Strong progress across all areas of our balanced scorecard Guest sentiment vs. market Safety Profit Guests People • We use a balanced scorecard to measure the quality of profit • Strong guest review scores of 4.5 out of 5 across the estate and guest sentiment ahead of the market • Record people scor
Slide 16: Momentum for the future
Momentum for the future Mitchells & Butlers - Restricted
Slide 17: Market growth
Market growth • The UK total eating out market forecast to grow by c.2.4% from 2024 to 2027 • Branded restaurants expected to see continued growth • Outlet numbers have declined by c.18,000 over the past 5 years due driven by Covid and cost of living pressures Total eating out market by turnover (m)
Slide 18: Market outperformance since 2016
Market outperformance since 2016 Rolling four-weekly average like-for-like sales vs Coffer Peach Tracker Mitchells & Butlers - Restricted
Slide 19: Improving outlook for consumer spending
Improving outlook for consumer spending • Reducing levels of inflation having a positive impact on consumer confidence • Disposable income returned to consistent growth from April 2023 Consumer confidence Asda income tracker Source: GfK consumer confidence barometer Source: Asda income tracker Mitch
Slide 20: Consumer trends
Consumer trends 1. Value Scrutiny 2. Premiumisation and experience 3. Technology and data 4. Health and wellbeing 5. Sustainability and conscious consumption Mitchells & Butlers - Restricted
Slide 21: 1. Value scrutiny
1. Value scrutiny What are we seeing? How are we responding? of consumers are going out less frequently 35% due to cost-of-living concerns of consumers say that one bad experience 25% is enough to make them less loyal to a venue Mitchells & Butlers - Restricted
Slide 22: 2. Premiumisation and experience
2. Premiumisation and experience What are we seeing? How are we responding? Competitive socialising continues to expand and diversify Dining becoming more immersive Growth in events Fenix, Manchester Jacuzzi, London Mitchells & Butlers - Restricted
Slide 23: Acquisitions - Ego & Pesto
Acquisitions - Ego & Pesto • Remaining stake in Ego acquired in FY 2023 • Ego provides a positive addition to our range of brands with a Mediterranean inspired menu • Integration of Ego onto systems and processes now complete • Recently added Pesto, a collection of 10 restaurants to our estate to fu
Slide 24: Organic growth - Orleans Smokehouse & Arrowsmiths
Organic growth - Orleans Smokehouse & Arrowsmiths • Further expansion of the brand portfolio through new brand development • First Orleans Smokehouse opened in Solihull averaging over £70k sales per week • 5 Arrowsmith implants now open within existing sites • Opportunity to premiumise and enhance g
Slide 25: 2. Premiumisation and experience
2. Premiumisation and experience What are we seeing? How are we responding? Competitive socialising continues to expand and diversify Dining becoming more immersive Growth in events Fenix, Manchester Jacuzzi, London Mitchells & Butlers - Restricted
Slide 26: 3. Technology and data
3. Technology and data What are we seeing? How are we responding? Operators are Continuing to improve the user experience. investing in First Party data… Social Media advertising Growing our First Party data and My Account ..and increasingly using Social media as a …Experimenting with AI… primary ad
Slide 27: 4. Health and wellbeing
4. Health and wellbeing What are we seeing? How are we responding? Health is becoming more nuanced Increase in ‘flexitarian’ drinking 0% 0% 14% Non-drinkers 41% have purchased an 50% have purchased a 23% rarely drink alcohol alcohol-free beer in the mocktail in the last 12 last 12 months months Mitc
Slide 28: 5. Sustainability & Conscientious Consumption
5. Sustainability & Conscientious Consumption What are we seeing? How are we responding? Eating out purchases are currently less influenced by sustainability considerations when compared to other categories. Consumers believe responsibility sits with the industry to reduce impact. Food waste Reduce
Slide 29: Strong performance across the period
Strong performance across the period Financial Highlights • Strong like-for-like sales growth of 7.0% - ahead of the market • Adjusted operating profit growth of 64% to £164m • Operating margin recovery to 11.7% • Cashflow before bond amortisation of £137m (HY 2023 £10m) Progress on strategic Priori
Slide 30: Questions
Questions Mitchells & Butlers - Restricted
Slide 31: Half Year Results 2024 Supplementary slides
Half Year Results 2024 Supplementary slides Mitchells & Butlers - Restricted
Slide 32: HY 2024 – Outlet reconciliation
HY 2024 – Outlet reconciliation Total Managed 1 Franchised Total MAB Opening outlets (start FY 2024) 1,663 55 1,718 Transfers 2 (3) 1 (2) Disposals (3) (3) Acquisitions 2 1 3 Closing outlets (end H1 2024) 1,659 57 1,716 Notes: 1. HY 2024 closing managed total includes 10 non-trading sites. 2. During