Mitchells & Butlers plc · LSE:MAB
Mitchells & Butlers — Six Continents — Merger or Acquisition (October 2002)
23 slides from Mitchells & Butlers's merger presentation, Oct 1, 2002
Slide 1: Separation, Return of Capital, Trading Update
Six Continents PLC Separation Return of Capital Trading Update 1st October 2002
Slide 2: Sir Ian Prosser
SIR IAN PROSSER 2
Slide 3: 5 Years Focus
5 Years Focus z Move from leisure conglomerate to focused businesses z Separation is the final significant move z Return of £3bn since 1997 3
Slide 4: Tim Clarke
TIM CLARKE 4
Slide 5: Separation Rationale
Separation Rationale z Two powerful businesses z Limited synergies and stated expectation of separation z Retained corporate structure to finance cash acquisition during hotel downturn z Smaller declines in asset prices than in hotel cash flows z Potential acquisitions have not met our strict criter
Slide 6: Benefits of Separation
Benefits of Separation z Clear market valuations z Efficient balance sheets z Greater strategic flexibility z Consolidation opportunities z Sharper management focus 6
Slide 7: Retail: Overview
Retail: Overview z Retail is the largest UK managed pub and restaurant Leading operator: c.£1.5bn revenues Player z Significant scale benefits in supply chain, overheads and marketing z 2,089 selected locations High Quality z Average weekly takes of £14.2k; 3x industry average Estate z 3% of outlets
Slide 8: Retail: Brand development: Target segments
Retail Brand development: Target segments Residential Pubs Pub 42% Restaurants 27% Drinks Food led led Bars Restaurants 27% City Centre 4% Note: Percentages represent split of SCR UK outlets (excluding Bowling, Bowling, Hotels) 8
Slide 9: Retail: Management
Retail: Management z Appointed as Non- Non-Executive Director of Six Continents PLC in 1996 Chairman Roger Carr Age: 54 z Chairman of Chubb PLC; Non- Non-Executive Director of Centrica and Cadbury Schweppes z Joined Six Continents in 1990. Appointed to the Board in 1996 and and became Group Chief Ex
Slide 10: Retail: Capital Structure & Dividend
Retail: Capital Structure & Dividend z Efficient balance sheet Capital Structure z Net debt 30/09/03 estimated around £1.3bn* z Credit Rating BBB- / Baa3 z First year dividend of 8.5p** Dividend z Targeting real increases in dividend * At market value ** Post share consolidation 10
Slide 11: Retail: Trading Update
Retail: Trading Update z Sales up over 5%, AWT £14.2k z Margins defended despite £19m regulatory costs z Like-for-like sales: invested + 2.0% uninvested - 1.5% z 400 ex-Allied sites now converted 11
Slide 12: Richard North
RICHARD NORTH 12
Slide 13: Hotels: Overview
Hotels: Overview Strong Competitive Brands Significant Global Scale Position 3,323 hotels** 515,463 rooms** Rooms in system: 98 countries** #2 worldwide 13.5m Priority Club Rewards Members*** #2 in US #2 in Europe + #1 in Asia Pacific £1.9bn revenue* £427m EBIT* Ca. £250m in off P&L system fund spen
Slide 14: Hotels: Strategy
Hotels: Strategy Develop high quality, strongly differentiated brands 1. - the brand promise of asset quality, service standards, brand personality Leverage global system scale economies to drive superior RevPAR and GOP premiums 2. - driving the benefits in IT, sales and brand marketing Build up net
Slide 15: Hotels: Management
Hotels: Management z Previously: Chairman Sir Ian Prosser Chairman Six Continents PLC (Since 2000) Age: 59 Chairman and Chief Executive, Six Continents PLC z Also Chairman, Britvic; previously: Chief Richard C. North Group Finance Director, Six Continents PLC Executive Age: 52 Group Finance
Slide 16: Hotels: Capital Structure & Dividend
Hotels: Capital Structure & Dividend z Balance sheet strength Capital Structure z Credit Rating BBB / Baa2 z Net debt 30/09/03 estimated around £1.3bn* z First year dividend of 13.5p** Dividend z Targeting real increases in dividend z Rebuild cover over time * At market value ** Post share consolida
Slide 17: Hotels: Trading Update
Hotels: Trading Update z Improving performance in weak market z Focus on sales and marketing delivering results z Renovation programme on plan z September trading 17
Slide 18: Britvic Soft Drinks
Britvic Soft Drinks z Retained with hotels management continuity on-trade opportunities z Good prospects z Current trading 18
Slide 19: Return of Capital
Return of Capital z £700m return (81p per share) z Required investment grade ratings z Tougher ratings environment z Capital plus prospective dividends - £970m 19
Slide 20: Conclusion
Conclusion z Freedom to pursue appropriate strategies z Improve ability to participate in consolidation z Align management rewards more directly to performance z Sharpen management focus z Provide clear market valuations z Create efficient balance sheets Further details to be sent to shareholders ea
Slide 21: Hotels, Retail & Britvic
Hotels, Retail & Britvic ae InTeRCONTI NENTAL OPNSOy A BROWNS <I CROWNE PLAZA y HOTELS RELONTE *ethia eenoete Goose Goose Yotidas Syn EXPRESS ALL’ BAR:-ONE
Slide 22: This presentation does not constitute an offer to sell or invitation to purchase
This presentation does not constitute an offer to sell or invitation to purchase any securities or the solicitation of any vote or approval. Unless otherwise determined by Six Continents and permitted by applicable law and regulation, the details of the transaction will not be communicated, directly
Slide 23: Forward-looking statements notice
This presentation contains certain forward-looking statements as defined under US law (Section 21E of the Securities Exchange Act of 1934). Such statements include, but are not limited to, statements made by Management about the separation of the group, the proposed return of capital and the propose
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