Mitchells & Butlers Plc · LSE:MAB
Mitchells & Butlers — FY2023 Earnings Presentation
29 slides from Mitchells & Butlers's earnings presentation, February 2024
Slide 1: Full Year Results 2023
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Slide 2: Summary
Summary ❑ Strong performance: • Strong trading performance in the face of significant headwinds • Sales growth of 9.1% with all brands in growth • Record market outperformance of 2.7ppts • Underlying profit, excluding Government aid in FY 2022, up 17.6% ❑ Encouraging outlook: • Well placed with uneq
Slide 3: Financial Review FY 2023
Financial Review FY 2023 Tim Jones Chief Financial Officer
Slide 4: Income Statement (before adjusted items)
Income Statement (before adjusted items) Note: FY23 includes £1m of government support (FY22 £53m) –4– Mitchells & Butlers - Restricted
Slide 5: Income Statement (before adjusted items)
Income Statement (before adjusted items) Note: FY23 includes £1m of government support (FY22 £53m) –5– Mitchells & Butlers - Restricted
Slide 6: Strong like-for-like sales
Strong like-for-like sales FY23 FY24 • Sustained like-for-like sales growth in both food and drink • Broad-based growth across all brands • FY23 growth driven by both volume and spend • Like-for-like sales growth excluding VAT 11.3% • Like-for-like sales growth for eight weeks since period end of 7.
Slide 7: Diverse portfolio of brands and locations
Diverse portfolio of brands and locations –7– Mitchells & Butlers - Restricted
Slide 8: Adjusted EBIT movement 52 week
Adjusted EBIT movement 52 week +£29m £(175)m +£170m £(52)m +£15m £(6)m FY 2022 FY 2022 FY 2022 FY 2022 FY 2023 Like-for-like Efficiencies Cost FY 2023 £240m government £188m openings openings trading* headwinds £221m support rebased and and remodels remodels *Like-for-like trading includes impact fr
Slide 9: Cost inflation beginning to abate
Cost inflation beginning to abate • FY 2023 cost headwinds £175m which equates to 10% of £1.8bn cost base • FY 2024 headwinds are expected to be c.£65m (c.3%) a reduction to pre-pandemic norms • Unhedged energy prices are expected to reduce into FY 2024 –9– Mitchells & Butlers - Restricted
Slide 10: Cash flow and debt
Cash flow and debt FY 2023 FY 2022 £m £m Operating cash flow 368 380 Working capital movement (1) 19 Pension deficit contributions (8) (44) Capital expenditure (157) (122) Acquisition of 3Sixty Restaurants net of cash (12) - Lease principal and interest (68) (61) Net interest (90) (99) Tax (3) (2) D
Slide 11: Main pension plans now both fully funded
Main pension plans now both fully funded Main and Exec Plan Triennial pension deficits • Both Main and Executive schemes now in buy-in therefore essentially de-risked with all contributions ceased (from September 2023) • £47m held in escrow accounts pending potential return • Remaining deficit of £2
Slide 12: Consistent reduction in net debt
Consistent reduction in net debt Covid-19 and open offer Securitisation debt service • Track record of consistent reduction in net debt to £1.2bn (3.26 times EBITDA) • Securitisation debt service includes inbuilt acceleration of repayment • Material reduction in annual debt service costs from 2030 •
Slide 13: Summary
Summary ❑ Strong performance: • Strong trading performance in the face of significant headwinds • Sales growth of 9.1% with all brands in growth • Record market outperformance of 2.7ppts • Underlying profit, excluding Government aid in FY 2022, up 17.6% ❑ Encouraging outlook: • Well placed with uneq
Slide 14: Phil Urban Chief Executive Officer
Phil Urban Chief Executive Officer
Slide 15: Outperformance vs. the market throughout the year
Outperformance vs. the market throughout the year Rolling four-weekly average like-for-like sales vs Coffer Peach Tracker, vs. calendar year 2022 • Like-for-like sales growth of 9.1% for the year • Outperformed the market by 2.7ppts over the year, as measured by CGA – 15 – Mitchells & Butlers - Rest
Slide 16: Pricing strategy
Pricing strategy 60 Guest sentiment vs. market 55 50 45 40 35 30 Jul-23 Jul-22 Nov-22 Feb-22 Apr-22 May-22 Jun-22 Apr-23 May-23 Jun-23 Jan-22 Mar-22 Aug-22 Sep-22 Dec-22 Jan-23 Feb-23 Mar-23 Aug-23 Sep-23 Oct-22 M&B Market excl. M&B Net sentiment as reported by Sentiment Search • Maintain value thro
Slide 17: Trading performance FY 2024
Trading performance FY 2024 • Like-for-like sales growth of 7.2% in the first 8 weeks of FY 2024 • Performance remains ahead of the market • Encouragingly festive bookings are ahead of the same time last year, key dates particularly strong – 17 – Mitchells & Butlers - Restricted
Slide 18: Energy efficiency and capital reduction
Energy efficiency and capital reduction • Large scale programme of energy efficiency has resulted in 3% year-on-year consumption reduction • Energy ambassadors support behaviour change • Investment in energy controls and solar panels facilitate consumption reduction • Focused on reducing maintenance
Slide 19: People
People • Team turnover in FY 2023 reduced by 13ppts to 81% • Retail team engagement near all-time record high • The employment environment has begun to ease, particularly for back-of-house roles • Strong training and progression opportunities mean we have a rich pipeline of talent – 19 – Mitchells &
Slide 20: Strategic priorities
Strategic priorities Build a more Instil a more Drive an innovation balanced business commercial culture agenda Brand propositions Guest-driven decisions Build on technology investment Conversion to successful formats Profitable sales Digital marketing Upgraded amenity in core Core operational drive
Slide 21: New concept value creation Ego
New concept value creation Ego Value creation • Total investment of £16m (net of £5m cash acquired) for 100% • The Ego brand which complements our portfolio and provides purchasing and conversion opportunities • Annual synergies of c.£3m from M&B supply chain • Conversion of c.6-10 sites per year un
Slide 22: Strategic priorities
Strategic priorities Build a more Instil a more Drive an innovation balanced business commercial culture agenda Brand propositions Guest Driven decisions Build on technology investment Conversion to successful formats Profitable sales Digital marketing Upgraded amenity in core Core operational drive
Slide 23: Capital programme
Capital programme • 200 investment projects planned for FY 2024 • Increased focus on investment in energy consumption reduction technology including solar, voltage optimisers and electric kitchens • 150 sites identified solar panels and 40 for electric kitchens for FY 2024 • Strong returns generated
Slide 24: Ignite
Ignite SALES COST REDUCTION Sales Culture Menu & Product Maintenance Process Takeaway Own Channel Cost Benchmarking Tables & Yield Management Delivery Digital Rewards Top 300 Dynamic Pricing Food and Drink Fraud Waste Guest Obsessed Energy Recycling Order at Table SUSTAINABILITY Auto-Order TeamPlan
Slide 25: Sustainability
Sustainability PROGRESS -11% 97% -25% – 25 – Mitchells & Butlers - Restricted
Slide 26: Summary
Summary ❑ Strong performance: • Strong trading performance in the face of significant headwinds • Sales growth of 9.1% with all brands in growth • Record market outperformance of 2.7ppts • Underlying profit, excluding Government aid in FY 2022, up 17.6% ❑ Encouraging outlook: • Well placed with uneq
Slide 27: Questions
Questions
Slide 28: Full Year Results 2023 Supplementary slides
Full Year Results 2023 Supplementary slides
Slide 29: FY 2023 – Outlet reconciliation
FY 2023 – Outlet reconciliation Total Managed1 Franchised Total MAB Opening outlets (start FY 2023) 1,646 72 1,718 Transfers2 14 (16) (2) Disposals (10) (1) (11) Acquisitions 13 - 13 Closing outlets (end FY 2023)3 1,663 55 1,718 Notes: 1. FY 2023 closing managed total includes 29 Ego outlets and 42