Mitchells & Butlers Plc · LSE:MAB
Mitchells & Butlers — FY2020 Earnings Presentation
22 slides from Mitchells & Butlers's earnings presentation, November 2020
Slide 1: Full Year Results 2020
Full Year Results 2020 –1–
Slide 2: Phil Urban, Chief Executive Officer
Phil Urban Chief Executive Officer –2–
Slide 3: A strong start to the year
A strong start to the year • Strong trading performance, including growth over the festive period of 5.6% • Ignite initiatives continued to add value • Improved margins and labour efficiency resulted in operating profit growth • Further initiatives were yet to be rolled out • Positioned for a strong
Slide 4: Initial business closure in March
Initial business closure in March • Trading remained resilient during initial reports of Covid-19 cases • As trading began to be significantly impacted we quickly entered the initial closure period announced on 20th March • Measures were quickly taken to preserve profitability and reduce waste: - tr
Slide 5: During closure
During closure • A skeleton team was retained to ensure security and maintenance of sites • Played an active role in UK Hospitality’s work to lobby Government to: - secure early warning of reopening date - devise Covid secure protocols • Smooth reopening of 85% of the estate on 4th July thanks to de
Slide 6: Successful reopening
Successful reopening • Extensive protocols meant capacity was well controlled on reopening • Trade built quickly during July, suburban and food led businesses performing well and city and wet-led struggling • Eat Out to Help Out Government scheme successful, resulting in like-for-like growth of 1.4%
Slide 7: Current trading position
Current trading position Open Closed England 0 1,477 Wales 56 3 Scotland 24 56 Germany 0 44 • Reopening from 2nd December will be with tougher restrictions • Site closures and social distancing measures will impact festive trade, but expect December to be a profitable month • Trade not likely to ret
Slide 8: Adapting to the new environment
Adapting to the new environment • Work on Ignite will continue to enable acceleration in 2021 • Order at table app accelerated to be live across 8 brands before Christmas • There has been a step up in Delivery and Click and Collect sales to £400k per week • Embracing video conferencing will deliver
Slide 9: Strength of our people
Strength of our people • Our teams have faced the challenges with exceptional professionalism • Front line teams have adapted to ever-changing protocols whilst protecting guests’ experiences • Protecting jobs has been a priority • Not been immune to the impacts of the pandemic and unfortunately had
Slide 10: Summary
Summary • Ignite continued to deliver momentum before closure • Strength of business remains: - 82% freehold estate - broad portfolio of popular brands • Industry supply will be reduced following pandemic • Confident in ability to regain position at top of the UK hospitality sector – 10 –
Slide 11: Financial Review 2020, Tim Jones, Chief Financial Officer
Financial Review 2020 Tim Jones Chief Financial Officer – 11 –
Slide 12: Key messages
Key messages • Covid-19 has led to an uncertain and challenging year • Strong and immediate action taken to preserve profitability • Stability and flexibility obtained through revised financing arrangements • Strong market position for when restrictions are lifted – 12 –
Slide 13: Income Statement (before adjusted items)
Income Statement (before adjusted items) FY 2020 FY 2019 £m £m Revenue 1,475 2,237 Operating costs (1,376) (1,920) Operating profit 99 317 Interest (127) (113) Pensions finance charge (4) (7) Profit before tax (32) 197 Operating margin 6.7% 14.2% (Loss)/Earnings per share (6.3)p 37.2p FY 2020 includ
Slide 14: Like-for-like sales
Like-for-like sales Proportion of 86% 94% 95% 90% estate open • Like-for-like sales primarily determined by Government restrictions • Food has generally performed better than drink • Restrictions continued into FY 2021 leading into the second lockdown on 5 November – 14 –
Slide 15: Cash flow
Cash flow FY 2020 FY 2019 £m £m EBITDA before movements in the valuation of the 255 418 property portfolio Non cash items 5 24 Operating cash flow 260 442 Working capital movement 20 9 Pension deficit contributions (25) (49) Cash flow from operations 255 402 Capital expenditure (108) (152) Net finan
Slide 16: Balance Sheet and Liquidity
Balance Sheet and Liquidity • Strong platform of liquidity and financial flexibility established in the Summer: - Existing unsecured facilities increased to £250m and extended to end of 2021. - Covenant waivers obtained as part of refinancing for the Securitisation, including 6 month look back test
Slide 17: Property valuation and net assets
Property valuation and net assets £bn Net assets * Adjusted for IFRS 16 impact • Increase in net assets and property valuation since HY 2020 following resumption of trading • Total freehold and long lease estate valuation of £3.8bn (FY 2019 £4.0bn) • Net assets £1.7bn (£3.90 per share) – 17 –
Slide 18: Outlook
Outlook • Challenging and highly uncertain trading environment which depends on Government restrictions • Unable to provide guidance on expected forward financial performance • Confident in ability to recover quickly once restrictions are lifted - Strong estate of largely freehold assets - Balanced
Slide 19: Questions
Questions
Slide 20: Full Year Results 2020 Supplementary Slides
Full Year Results 2020 Supplementary Slides – 20 –
Slide 21: FY 2020 – Outlet reconciliation
FY 2020 – Outlet reconciliation Total Managed1 Franchised Total MAB Opening outlets (start FY 2020) 1,680 68 1,748 Transfers (5) 5 - Disposals (8) (2) (10) Acquisitions - - - Closing outlets (end FY 2020) 1,667 71 1,738 Notes: 1. FY 2020 closing managed total includes 7 non-trading sites. 2. Lodges
Slide 22: FY 2020 – Securitisation profile
FY 2020 – Securitisation profile – 22 –