Mitchells & Butlers plc · LSE:MAB
Mitchells & Butlers — H1 2011 Earnings Presentation
35 slides from Mitchells & Butlers's earnings presentation, May 20, 2011
Slide 1: Half Year Results – 20 May 2011
Simon Burke Chairman Half Year Results – 20 May 2011
Slide 2: Tim Jones, Finance Director
Tim Jones Finance Director Half Year Results – 20 May 2011
Slide 3: Income statement
Income statement 28 weeks ended 9 April 2011 H1 FY11 H1 FY10 £m £m Retained Estate: Revenue 912 875 4.2% Operating profit 136 136 Other operations 5 20 Total operating profit 141 156 (9.6%) Interest (78) (83) PBT (pre exceptionals) 63 73 (13.7%) EPS (pre exceptionals) 11.3p 13.0p (13.1%) 3
Slide 4: Retained Estate: EBIT movement
Retained Estate: EBIT movement +16 (4) £136m (6) £136m H1 FY10 H1 FY11 (3) (3) NMW & duty Food inflation Easter Trading Accelerated costs movement brand roll-out 4
Slide 5: Retained Estate: Key statistics
Retained Estate: Key statistics Retained Estate 28 weeks ended 9 April 2011 H1 Growth Food spend per head 7.4% Food customer numbers 0.1% Food cash gross margin 8.6% Total cash gross margin 4.3% Outlet staff costs 24.9% (0.2) ppts Net margin 14.9% (0.6) ppts 5
Slide 6: Retained Estate: Net operating margin
Retained Estate: Net operating margin (0.7%) +1.1% (0.4%) 15.5% H1 FY10 (0.4%) (0.2%) 14.9% H1 FY11 NMW & Food Easter Trading Accelerated duty costs inflation movement brand roll-out impact 6
Slide 7: Brand roll-out
Brand roll-out Conversions New openings 40 31 29 14 9 6 3 1 0 1 H1 H2 H1 H2 H1 H1 H2 H1 H2 H1 FY09 FY10 FY11 FY09 FY10 FY11 Note: Includes all acquisitions from FY09 onwards 7
Slide 8: Capital expenditure
Capital expenditure EBITDA return of 19% on last 2 years’ investments Total capex in H1 FY11 of £99m - £53m rolling out brands - £43m refurbishment capital - £3m infrastructure Total capex in FY11 estimated at £170m - £75m rolling out brands - £85m refurbishment capital - £10m infrastructure 8
Slide 9: Group cash flow
Group cash flow H1 FY11 H1 FY10 £m £m EBITDA 199 225 Working capital / non cash items (30) 5 Maintenance capex (46) (59) Net interest paid (69) (74) Tax (8) 0 Deficit pension contributions (20) (15) Operating Cash Flow 26 82 Expansionary capex (53) (9) Disposals 417 21 Share capital 2 2 Net Cash Flo
Slide 10: Group net debt
Group net debt Apr 11 Sep 10 £m £m Securitisation debt (2,257) (2,274) Cash & other 152 215 Securitised net debt (2,105) (2,059) Cash / (unsecured net debt) 185 (243) Group net debt (1,920) (2,302) Net Debt : EBITDA* 4.9x 5.1x • Ratio calculated using previous 12 months’ EBITDA for the Retained Esta
Slide 11: Internal operations & property disclosure
Internal operations & property disclosure H1 FY11 Operations Property Total £m £m £m Revenue 912 - 912 EBITDAR 215 - 215 Rent (123) 102 (21) EBITDA 92 102 194 EBITDA % 10.1% 21.3% Replicates estimated market rent for all properties Internal rent included in performance evaluation All brands profitab
Slide 12: Key messages
Key messages Robust like-for-like sales growth Net debt under 5 times EBITDA through disposals Proceeds extracted from securitisation Strong pipeline of brand roll-out investment opportunities 12
Slide 13: Jeremy Blood, Interim Chief Executive
Jeremy Blood Interim Chief Executive Half Year Results – 20 May 2011
Slide 14: Key messages
Key messages Underlying business is strong A clear strategy to drive value Strategy implementation on track Good progress …. more to do 14
Slide 15: Personal observations
Personal observations Asset quality Brand potential Committed people Strong foundations for growth 15
Slide 16: Clear & continuing strategy
Clear & continuing strategy Focus on food growth Brands - Roll-out - Continual innovation Margin growth - Gross margins - Cost base - Capital efficiency Strategy will drive value and earnings growth 16
Slide 17: Eating-out continues to grow
25 27 29 31 £bn 33 35 37 39 41 43 45 2000 Q1 2000 Q2 MAT eating out of home data 2000 Q3 2000 Q4 2001 Q1 Source: Q4 2010 Consumer Trends, ONS 2001 Q2 2001 Q3 2001 Q4 2002 Q1 2002 Q2 2002 Q3 2002 Q4 2003 Q1 2003 Q2 2003 Q3 2003 Q4 2004 Q1 2004 Q2 2004 Q3 2004 Q4 17 2005 Q1 2005 Q2 2005 Q3 2005 Q4 200
Slide 18: Food drives like-for-like sales
Food drives like-for-like sales FY 10 FY 10 FY 11 Wk 1-33 Wk 34-52 Wk 1-33 Food 4.5% 5.0% 5.5% Drinks 1.4% 1.5% 1.8% Total 2.7% 3.0% 3.3% Food is engine for growth 18
Slide 19: Menu innovation driving cash margins
Menu innovation driving cash margins H1 Food cash gross margin +7.2% (1.4%) +8.6% +2.7% +0.1% Customer visits Same product price Spend & mix Same product cost movements increases inflation Sustainable cash margin growth Retained Estate 19
Slide 20: Price key factor in drink cash margin
Price key factor in drink cash margin +3.3% (3.0%) +4.8% (1.3%) (2.2%) +1.6% Same product Mix Volumes Disposals COGS & Duty price movements Balancing price and volume to deliver improved cash Retained Estate 20
Slide 21: Building brand power
Building brand power 21
Slide 22: Step change in capital programme
Step change in capital programme 31 conversions 29 new openings - Successful conversion of Ha Ha Bar & Grill - Site acquisitions continue Strong pipeline of good sites 22
Slide 23: Brand potential remains high
Brand potential remains high Brand Current Potential Site Harvester 176 400 Toby 135 300 Vintage Inns 224 350 23
Slide 24: Building brand power
Building brand power Improved Guest Driving Brand & food profitability feedback margins & insight capital efficiency Improved Brand sales innovation Advertising & Improved Quality & brand roll-out satisfaction operational implementation 24
Slide 25: = A ie
= A ie
Slide 26: Salad & Grill
Salad & Grill Before After Stronger brand proposition for customers… 26 better economic model
Slide 27: Re-engineering the operation
Re-engineering the operation 27
Slide 28: National advertising
National advertising Driving sales in existing sites and new locations 28
Slide 29: New locations
New locations Retail park developments trading successfully 29
Slide 30: Continual innovation
Continual innovation Maximising utilisation of assets 30
Slide 31: Improving brand strength
Improving brand strength 31
Slide 32: Driving value from operational leadership
Driving value from operational leadership GOOD INVESTING MORE PROGRESS FOR FUTURE TO DO • Guest satisfaction • Brand advertising • Driving value from • Food sales & scale • New site costs margins • Overhead • LFL momentum efficiency • Brand roll-out • Procurement - Strong pipeline • Capital efficien
Slide 33: Outlook
Outlook Current trading is robust Consumer spending weaknesses set to continue Cost pressures have returned 33
Slide 34: Conclusion
Conclusion Underlying business is strong A clear strategy to drive value Strategy implementation on track…more to do Brand roll-out will deliver value growth 34
Slide 35: Questions & Answers
Questions & Answers Half Year Results – 20 May 2011