Mitchells & Butlers Plc · LSE:MAB
Mitchells & Butlers — FY2021 Earnings Presentation
24 slides from Mitchells & Butlers's earnings presentation
Slide 1: Full Year Results 2021
Full Year Results 2021 –1–
Slide 2: Phil Urban, Chief Executive Officer
Phil Urban Chief Executive Officer –2–
Slide 3: Summary
Summary • The year was dominated by the impact of Covid-19 with total sales down 52.4% on FY 2019 due to mandated closure and restrictions • The successful equity raise and associated refinanced terms provide a strong platform of financial stability • Sales have recovered well since reopening with a
Slide 4: Financial Review 2021 - Tim Jones, Chief Financial Officer
Financial Review 2021 Tim Jones Chief Financial Officer –4–
Slide 5: Income Statement (before adjusted items)
Income Statement (before adjusted items) FY 2021 FY 2020 £m £m Revenue 1,065 1,475 Operating costs (1,036) (1,376) Operating profit 29 99 Interest (120) (127) Pensions finance charge (3) (4) Loss before tax (94) (32) Operating margin 2.7% 6.7% Loss per share¹ (13.6)p (5.7)p ¹Loss per share for FY 20
Slide 6: Recovery in total sales
Recovery in total sales Proportion of - - - 15% 69% 98% 98% 98% 98% 94% 17% 30% Estate Open • Strong recovery of sales as the estate reopened following the easing of restrictions –6–
Slide 7: Like-for-like sales vs. FY19
Like-for-like sales vs. FY19 • Return to like-for-like growth after trading restrictions were lifted on 19 July • Food has performed better than drink, aided by temporary VAT rate reduction • Suburban areas have generally outperformed larger city centres • Sales driven by spend per head growth and V
Slide 8: Diverse portfolio of brands and locations
Diverse portfolio of brands and locations • Importance of a broad range of offer and locations –8–
Slide 9: Annualised cost headwinds
Annualised cost headwinds FY22 Longer term inflation of 3.5% £m • Current food cost inflation estimated to be 7% • Labour cost inflation reflects 6.6% National Living Wage increase from April 2022 • Sharp increase in energy costs which remain volatile and uncertain • Overall inflationary increase on
Slide 10: Strengthened balance sheet
Strengthened balance sheet Net Debt £1,564m £1,270m FY19 FY21 Note: Net Debt excludes IFRS16 liabilities • Equity raise rightsized in February 2021 • Combined with debt refinance balance sheet is well positioned to meet future uncertainty • Group has cash balances on hand of £227m at the balance she
Slide 11: Creating equity value through deleverage
Creating equity value through deleverage 2016 Current 2027 Note: Assumes consistent enterprise value and net debt excludes IFRS16 liabilities • Progress in deleverage through securitisation amortisation and pensions deficit contributions • Over past five years net debt (excl. pensions and leases) re
Slide 12: Summary
Summary • Strong return to profitability and cash generation on lifting of restrictions • Cost headwinds remain a challenge notably labour and utility cost increases • Confident in ability to continue strong recovery with; - Secure financial platform - Strong estate of largely freehold assets - Dive
Slide 13: Phil Urban, Chief Executive Officer
Phil Urban Chief Executive Officer – 13 –
Slide 14: Trading since reopening
Trading since reopening • Sales performance has progressed well since reopening • Volumes have been in decline with spend per head driving growth • Suburbs recovered more quickly than city centres • Food-led brands’ recovery stronger than wet-led • Premium food-led offers have generated very strong
Slide 15: Trading since reopening – MAB vs. Market
Trading since reopening – MAB vs. Market • Strong outperformance of restaurant segment • Comfortable outperformance of pub restaurants • Underperformance in pubs driven by slower recovery of community, wet led offers and strong performance of youth led offers – 15 –
Slide 16: Cost headwinds and mitigation
Cost headwinds and mitigation Cost headwinds Mitigation Employment Ignite 3 Utilities Capital programme Food and Drink • Cost headwinds are challenging in the year ahead • We have a proven track record of successful mitigation in previous years, of c.3.5% inflation, through our Ignite initiatives an
Slide 17: Cost mitigation - Ignite
Cost mitigation - Ignite 3 2016 – 2018 1 2018 – 2019 2021 ONWARDS • First established in February 2016 • Completed over 100 initiatives IGNITE 1 IGNITE 2 IGNITE 3 delivering sales and profit growth • Broad mixture of initiatives designed to both increase sales and enhance efficiency • New wave of in
Slide 18: Resumption of the capital programme
Resumption of the capital programme Pine Marten - Harrogate • Refurbish Innkeepers Collection rooms • Full capital programme planned for in FY 2022 • 42 projects completed since reopening in April • Target 6 -7 year investment cycle • Investment across brand portfolio – 18 –
Slide 19: Our strategic priorities
Our strategic priorities Build a more Instil a more Drive an balanced business commercial culture innovation agenda - Brand propositions - Profitable sales - Build on technology investment - Conversion to successful formats - Core operational drivers - Digital marketing - Upgraded amenity in core -
Slide 20: Summary
Summary • Trading environment remains challenging but we are well placed to return to sales and profit growth • Great business with a strong balance sheet, some of the best UK sites and brands and a team of experiences hospitality professionals • Strategy remains to de-leverage the business as we bu
Slide 21: Questions
Questions, | a
Slide 22: Full Year Results 2021 Supplementary Slides
Full Year Results 2021 Supplementary Slides – 22 –
Slide 23: FY 2021 – Outlet reconciliation
FY 2021 – Outlet reconciliation Total Managed1 Franchised Total MAB Opening outlets (start FY 2021) 1,667 71 1,738 Transfers (5) 3 (2) Disposals (2) (2) (4) Acquisitions - - - Closing outlets (end FY 2021) 1,660 72 1,732 Notes: 1. FY 2021 closing managed total includes 15 non-trading sites. 2. Lodge
Slide 24: FY 2021 – Securitisation profile
FY 2021 – Securitisation profile – 24 –