Mitchells & Butlers plc · LSE:MAB
Mitchells & Butlers — Six Continents — Schroder Salomon Smith Barney Hotels Conference (2002)
28 slides from Mitchells & Butlers's conference presentation, 2002
Slide 1: Schroder Salomon Smith Barney Hotels Conference
SCHRODER SALOMON SMITH BARNEY HOTELS CONFERENCE TIM CLARKE CHIEF EXECUTIVE SIX CONTINENTS PLC
Slide 2: Strategic Position
Strategic Position Brands Assets Financials Global status Improving asset quality Retail earnings Revenue delivery Identified investment Strong balance priorities sheet Distribution scale Rigorous investment Spread portfolio criteria Franchise model 2
Slide 3: Business Resilience: Profit Split
Business Resilience Profit Split fic 4% &L cas O ci - 40% Retail and Soft Drinks 6% Pa Ameri Asia Americas M & F EMEA O & L 21% 26% F 4% & er M A Oth E Six Continents Retail EM vic/ 32% rit 7% B 3 *Pro-forma 2001 after adjusting for Inter-Continental Hong Kong, Posthouse and pubs sold.
Slide 4: Geographic Split of Hotels Profit
Geographic Split of Hotels Profit* Americas EMEA Asia Pacific North America O & L UK 25% ICH Hong Kong 2% 10% London 10% New York 3% Provinces 15% ANZSP Region 2% Chicago <1% San Francisco <1% France 7% Other 3% Paris 5% Miami 1% Other 2% Other 5% North America M & F 33% Germany 3.5% Latin America 1
Slide 5: Impact of 11th September
Impact of 11th September • Retail traded well • Soft Drinks unaffected • Hotel profit reduction $25 million 5
Slide 6: Key Long-Term Priorities
Key Long-Term Priorities Capturing the long term industry growth requires: • Differentiated brands • International distribution • Scale economies • System revenue delivery Our business model allows us to do this 6
Slide 7: Key Near-Term Priorities
Key Near-Term Priorities Performance and delivery • Using system scale to promote room-night volume • Cost actions in Hotels and overheads • Distribution opportunities 7
Slide 8: Travel Growth
Travel Growth International Tourist Arrivals 1050 WTO Forecast (pre Sep 11) 950 850 level (lhs) millions of arrivals 750 650 550 450 350 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 source: World Tourism Organisation 8
Slide 9: Short-Term Caution - Lessons from the 1990's
Short-Term Caution - Lessons from the 1990’s US Hote ls - P e rc en tag e Ch a n g e in ADR, Oc c u p an c y a n d Rev P AR 8.0% 6.0% 4.0% R e vP A R % Chan g e on P rior Y ear ADR 2.0% O c cupa nc y 0.0% -2.0% 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 -4.0% 9
Slide 10: International Position
International Position Hotel Markets US Germany Italy China France Spain UK Percentage of international 16% 19% 4% 1% 5% 35 11% travel Percentage of world market 25% 7% 7% 5% 5% 4% 3% Market Position by rooms Six Continents 2 3 3 1 - - 1 Source: SCH analysis WTO Factbooks 10
Slide 11: Brand & Distribution Profile
Brand & Distribution Profile Brands Segment No. Rooms No. Hotels Upper Upscale 45,000 137 Upscale 47,000 162 Midscale 298,000 1,587 Midscale w/o F&B 101,000 1,254 Extended stay 4,000 37 Unconverted hotels 19,000 89 514,000 3,266 11
Slide 12: The Influence of Hotel Branding
The Influence of Hotel Branding All Business Travellers Europe Not at all 12 Just a little 18 A fair amount 40 A great deal 26 12 Source: BDRC
Slide 13: Franchising is a Key Driver of Brand Scale
Franchising is a Key Driver of Brand Scale Franchisor Hotel Owner Guest Brand Strength Property Returns Reward Programme Powerful Reservation Superior Revenue Distribution System Delivery Consistency Hotel Development, Simplicity of Operation Service Standards Operating & Service Model Quality Contr
Slide 14: We Have a Powerful System Fund
We Have a Powerful System Fund • c.$350 million in annual marketing spend – Reservations – Priority Club – Sales and Marketing • More than one-third of room-nights via our reservations, Priority Club, marketing & sales network • Scale of our hotel network - largely non P&L funding 14
Slide 15: Reward Programmes Deliver Huge Benefits
Reward Programmes Deliver Huge Benefits • 12.5 million members • 25% of all guest stays • 5% RevPAR premium • 10% growth in room-nights • 2 million new members 15
Slide 16: US National Campaigns: Come Back to New York
US National Campaigns “Come Back to New York” 16
Slide 17: US National Campaigns: This is your boarding call
US National Campaigns “This is your boarding call” 17
Slide 18: Current Promotions
Current Promotions • EMEA stay 3 times get 1 night free • Americas 5,000 bonus points promotion • Almost gold initiative Other activity and use of Alliances • Triple business options • Meeting options • Spalding golf • Delta free tickets 18
Slide 19: where you want to be
where you want to be You want to be with a hotel that doesn’t take you for granted, That's famous for innovation and continues to introduce new ways to surprise and delight you. A hotel that has extensive business facilities...that has dedicated staff to ensure your meeting runs smoothly... that i A
Slide 20: Other short term actions
Other short term actions • Reducing costs • Reducing inventory But • Maintaining capital spend • Bringing forward refurbishments 20
Slide 21: Inter-Continental - Chicago
Inter-Continental - Chicago 21
Slide 22: Inter-Continental - Chicago Renovated Room
Inter-Continental - Chicago Renovated Room 22
Slide 23: Inter-Continental - Chicago
Inter-Continental - Chicago 23
Slide 24: Asset Ownership is the Enabler to Brand Scale
Asset Ownership is the Enabler to Brand Scale Ownership Franchise & Reduce Asset phase Management Intensity Long term Contract Phase segment High growth Brand Strength Low 24 Time
Slide 25: Key Strategic Distribution Priorities
Key Strategic Distribution Priorities • Extend global representation of Inter- Continental and Crowne Plaza across key cities and resorts • Build domestic positions for Holiday Inn and Express in Western Europe • Leverage US midscale franchise infrastructure Primary focus to accelerate distribution
Slide 26: Distribution Growth and Future Pipeline
Distribution Growth and Future Pipeline 98 - 2000 2000/01 Pipeline Rooms Growth 43,000 23,000 67,000 26 Note: signed deals
Slide 27: Summary
Summary • Leading international branded players are in pole position • Resilient retail and franchise businesses • Drive further distribution 27
Slide 28: Six Continents
SIX CONTINENTS
Six Continents — Schroder Salomon Smith Barney Hotels Conference (2002) on 6ix