Mitchells & Butlers Plc · LSE:MAB
Mitchells & Butlers — FY2024 Earnings Presentation
30 slides from Mitchells & Butlers's earnings presentation, 2024
Slide 1: Full Year Results 2024
Full Year Results 2024 Mitchells & Butlers - Restricted
Slide 2: Strong performance across the period
Strong performance across the period Highlights • Strong recovery from FY 2023 • Adjusted operating profit growth of 41.2% to £312m • Like-for-like sales growth of 5.3% - consistently ahead of the market • Full capital programme delivering strong returns • Further Ignite initiatives to deliver effic
Slide 3: Financial Review FY 2024
Financial Review FY 2024 Tim Jones Chief Financial Officer Mitchells & Butlers - Restricted
Slide 4: Income Statement
Income Statement (before adjusted items) FY 2024 FY 2023 Movement 52 week 53 week % £m £m Revenue 2,610 2,503 Operating costs (2,298) (2,277) Operating profit 312 226 Interest (99) (108) Pensions finance charge (2) (3) Profit before tax 211 115 Operating margin 12.0% 9.0% Earnings/(loss) per share 2
Slide 5: Income Statement
Income Statement (before adjusted items) FY 2024 FY 2023 Movement 52 week 52 week % £m £m Revenue 2,610 2,459 +6.1% Operating costs (2,298) (2,238) Operating profit 312 221 +41.2% Interest (99) (108) Pensions finance charge (2) (1) Profit before tax 211 112 +88.4% Operating margin 12.0% 9.0% +3.0bps
Slide 6: Strong like-for-like sales as inflation falls
Strong like-for-like sales as inflation falls 10% 9% • Like-for-like sales growth of 5.3%, 8% ahead of the sector 7% GROWTH RATE % • Broad-based growth across brand 6% portfolio 5% • Volumes in marginal decline, 4% closer to pre-covid trends 3% 2% • First 7 weeks like-for-like growth in FY 2025 of 4
Slide 7: 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 8: Adjusted EBIT movement
Adjusted EBIT movement +£37m +£90m +£45m +£17m £(95)m £(3)m FY 2023 FY 2023 openings FY 2024 openings Like-for-like trading Efficiencies Cost headwinds Reduced FY 2024 £221m and remodels and remodels electricity and gas £312m costs Margin Margin 9.0% 12.0% Mitchells & Butlers - Restricted
Slide 9: Cost inflation driven by wages and national insurance
Cost inflation driven by wages and national insurance FY 2025 100 • FY 2025 90 - Non labour cost inflation low 80 - Labour increases from April • National Insurance up £11m (£23m pa) 70 • Minimum wage up £21m (£42m pa) 60 - Aggregate increase of c.5% of cost base 50 • FY2026 and beyond 40 - Annualis
Slide 10: Strong cash flow
Strong cash flow FY 2024 FY 2023 £m £m Operating cash flow 454 368 Working capital movement 15 (1) Pension escrow return 35 - • Working capital inflow from sales Pension deficit contributions (1) (8) growth Capital expenditure (154) (157) • Pension escrow return of £35m from Acquisitions of 3Sixty R
Slide 11: Pensions – derisked with a surplus funding position
Pensions – derisked with a surplus funding position Executive plan • Full scheme buy out completed during the year • £12m escrow monies repaid after the year end Main Plan • Full scheme buy in completed in FY 2023 • £35m escrow monies repaid during the year • Surplus funding position of £164m now re
Slide 12: Balance sheet strength
Balance sheet strength Acceleration in amortisation FY 2024 FY 2023 £ms £m £m (250.00) Assets Annual Cash Interest Annual Amortisation (200.00) Property, plant and equipment 4,419 4,086 ROU leases 307 327 (150.00) Pension surplus 164 - (100.00) Other 53 112 Non-current assets 179 4,943 4,525 (50.00)
Slide 13: Strong performance across the period
Strong performance across the period Financial Highlights • Like-for-like sales growth of 5.3% - consistently ahead of the market • Adjusted operating profit growth of 41% to £312m • Operating margin recovery to 12.0% • Cashflow before bond amortisation of £185m Progress on strategic Priorities • Ne
Slide 14: Phil Urban, Chief Executive Officer
Phil Urban Chief Executive Officer Mitchells & Butlers - Restricted
Slide 15: Sustained outperformance vs. the market
Sustained outperformance vs. the market Covid 2016 2017 2018 2019 2022 2023 2024 Rolling four-weekly average like-for-like sales vs CGA Business Tracker • Sustained market outperformance since 2016 • Reflects the strength of our brand portfolio and estate locations Mitchells & Butlers - Restricted
Slide 16: Outperformance during FY 2024
Outperformance during FY 2024 Rolling four-weekly average like-for-like sales vs CGA Business Tracker • Like-for-like sales growth of 5.3% for the year • Outperformed the market by c.1.7ppts over the year, as measured by CGA Business Tracker Mitchells & Butlers - Restricted
Slide 17: Opportunity to continue to grow market share
Opportunity to continue to grow market share M&B’s revenue share of GB Total Pubs, Bars & Service-led restaurant turnover M&B v Mkt Net Sentiment 70 65 60 Net Sentiment Score 55 50 45 40 35 30 M&B Total Market Ex MAB • Systematic growth of market share over last nine years with opportunity for furth
Slide 18: Levers to continue market outperformance
Levers to continue market outperformance Build a more balanced business Instil a more commercial culture Drive an innovation agenda • Brand propositions • Guest-driven decisions • Build on technology investment • Conversion to successful formats • Profitable sales • Digital marketing • Upgraded amen
Slide 19: Balanced portfolio
Balanced portfolio • Optimising our estate through systematic upgrade of amenities • Constant evolution of our brand formats informed by guest insight • Operate at the premium end of each market sector • Committed to a 7-year investment cycle • Investment covers front and back of house as well as ex
Slide 20: Commercial edge
Commercial edge A skill we have now embedded across the organisation • Putting the guest at the heart of all that we do • Guest insight drives decision making • Rigorous review of conversion of sales to profit across central functions and operations • Move at pace across the business with project ma
Slide 21: Innovation
Innovation Driving an innovative spirit across the business • Deployment and optimisation of technology • Introduction of multiple tools which have enhanced the efficiency of day-to-day operations • Making digital marketing the engine room for the business • Launched My Account across multiple brand
Slide 22: Levers to continue market outperformance
Levers to continue market outperformance Build a more balanced business Instil a more commercial culture Drive an innovation agenda • Brand propositions • Guest-driven decisions • Build on technology investment • Conversion to successful formats • Profitable sales • Digital marketing • Upgraded amen
Slide 23: Capital Programme
Capital Programme Remodel Conversion Acquisition Maintenance Systematic upgrade of Rebalancing of portfolio Purchase of new sites Maintenance of fittings amenity and evolution of by changing the brand which add value to the and equipment as well as brand offers within a site portfolio sustainability
Slide 24: The next wave of Ignite
The next wave of Ignite Cost Inflation Product Sales Capital Investment Development • Established programme facilitating change across the business to unlock value • Incremental improvements across Productivity Data Driven Insights Our Spaces Stock Management multiple fronts simultaneously • Ideatio
Slide 25: Ignite – impactful initiatives
Ignite – impactful initiatives Focus on under-performing Utilising 3rd party delivery brand Using AI to enhance Bookings assets to enhance the appeal of our productivity with Using our table management Systematically working on delivery options through an opportunities identified in software to unlo
Slide 26: Sustainability Making moments matter
Sustainability Targets Making moments matter Net zero emissions By 2040 Respect for the planet We are committed to reducing our emission, tackling waste Pride in our offers We strive to deliver responsibly sourced products and menu options for Care for communities People are central to our business,
Slide 27: Strong performance across the period
Strong performance across the period Highlights • Strong recovery from FY 2023 • Like-for-like sales growth of 5.3% - consistently ahead of the market • Adjusted operating profit growth of 41.2% to £312m • Full capital programme delivering strong returns • Further Ignite initiatives to deliver effic
Slide 28: Questions
Questions Mitchells & Butlers - Restricted
Slide 29: Full Year Results 2024 Supplementary slides
Full Year Results 2024 Supplementary slides Mitchells & Butlers - Restricted
Slide 30: FY 2024 – Outlet reconciliation
FY 2024 – Outlet reconciliation Total Managed 1 Franchised Total MAB Opening outlets (start FY 2024) 1,663 55 1,718 Transfers 2 (5) 4 (1) Disposals (6) - (6) Acquisitions 14 1 15 Closing outlets (end FY 2024) 1,666 60 1,726 Notes: 1. FY 2024 closing managed total includes 31 Ego, 10 Pesto and 43 Ale