Mitchells & Butlers plc · LSE:MAB
Mitchells & Butlers — Six Continents — CSFB conference (2002)
30 slides from Mitchells & Butlers's conference presentation, 2002
Slide 1: David Bland, Managing Director EMEA, Six Continents Hotels
David David Bland Bland Managing Managing Director Director EMEA EMEA Six Six Continents Continents Hotels Hotels
Slide 2: Inter-Continental Paris
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Slide 3: Driving distribution in EMEA
Driving distribution in EMEA Six Continents PLC overview Focus on EMEA Brand positioning Drivers of growth Creating value
Slide 4: Operating Profit 2001
Operating Profit 2001* Britvic 7% Hotels Retail 55% 39% *Actual split unadjusted
Slide 5: Hotels: a strong global spread
Hotels: a strong global spread Operating Profit 2001* Asia Pacific 6% EMEA Americas 42% 52% *Actual profits at hotel level
Slide 6: Hotels: spread of ownership
Hotels: spread of ownership Operating Profit 2001 Owned Managed & Leased & Franchised 45 % 55 %
Slide 7: Asset ownership - enables brand scale
Asset ownership - enables brand scale Ownership Franchise & Reduce asset Long term phase management intensity segment contract growth phase High Brand strength Low Time
Slide 8: Four key reasons for owning property
Four key reasons for owning property 1. To secure key sites IC Hong Kong 2. To drive mass distribution 3. New brand development 4. Creation of prototypes Holiday Inn - Atlanta
Slide 9: All acquisitions have to meet strict criteria
All acquisitions have to meet strict criteria NPV positive Above WACC returns by year 3 Earnings enhancing in first full year of ownership
Slide 10: SCH EMEA: a major force in the region
SCH EMEA: a major force in the region 585 Hotels 49 Countries Europe Middle East $2bn System revenues $290m Operating profit ‘01 Africa
Slide 11: EMEA: balance of ownership
EMEA: balance of ownership Operating Profit 2001 Managed & Franchised 15% Owned & Leased 85 %
Slide 12: EMEA: broad geographical spread
EMEA: broad geographical spread Operating Profit 2001 MEA 10% UK 40% Benelux Other 10% 9% Germany 9% France 17% Spain Italy 2% 3%
Slide 13: EMEA: hotels by brand
EMEA: hotels by brand (Sept 2001) Hotels Rooms 73 22,550 47 12,308 323 52,947 97 9,184 585 Total 107,249
Slide 14: EMEA: Clear rate hierarchy
EMEA: Clear rate hierarchy ($) 143 110 77 70
Slide 15: EMEA: strong brand awareness
EMEA: strong brand awareness Example: Holiday Inn Pan Europe UK Germany Italy France 1st 1st 1st 2nd 3rd “Holiday “Holiday Inn Inn isis the the No. No. 11 brand brand in in Europe Europe taking taking into into account account key key measures measures of of awareness, awareness, usage usage and and
Slide 16: Focus of management action
Focus of management action Revenue delivery focus on domestic and intra-regional guests promotional activity expanded sales force Maintaining capital investment property modernisation continues systems investment Cost reduction hotels headcount corporate re-engineering
Slide 17: EMEA strategic growth priorities
EMEA strategic growth priorities Extend representation of Inter-Continental and Crowne Plaza across key cities and resorts Build strong positions for Holiday Inn and Express in Western Europe - UK - Germany - Italy - Spain - France Accelerate Accelerate distribution distribution of of existing exist
Slide 18: Drivers of growth (1) - organic development
Drivers of growth (1) - organic development Rooms in pipeline - EMEA Owned Mgd / Franchised Total 0 4,237 4,237 525 3,127 3,652 400 7,637 8,037 400 4,043 4,443 1,325 19,044 20,369 Total Rooms 26,909 80,340 107,249
Slide 19: New developments
New developments Holiday Inn Paris - Inter-Continental at Disneyland Resort Warsaw Inter-Continental Cologne Crowne Plaza Brussels airport Crowne Plaza London - The City Crowne Plaza NEC Birmingham
Slide 20: Drivers of growth (2) - major acquisition
Drivers of growth (2) - major acquisition Example: Holiday Inn UK
Slide 21: Posthouse - rationale
Posthouse - rationale Advanced midscale strategy in Europe Increased scale and resources to drive Holiday Inn brand now midscale market leader in UK Value in deal from our ability to improve revenue - better customer offer - superior yield management - improved sales and marketing - capital to inves
Slide 22: Holiday Inn UK - Plans on track
Holiday Inn UK - Plans on track 2001 2002 2003 2004 People integration Complete Reservation system roll- roll-out Upgrade service standard Complete Re--brand hotels Re Complete Regenerate sales function Complete Marketing campaign Ongoing Rooms renovation Ongoing Building Building aa revPAR revPAR p
Slide 23: Holiday Inn UK - marketing campaign
Holiday Inn UK - marketing campaign
Slide 24: Drivers of growth (3) - investment in our properties
Drivers of growth (3) - investment in our properties Example: IC modernisation programme IC Budapest and IC Vienna completed with strong uplifts IC Madrid complete May 02 IC Paris Le Grand closed from December 01 IC Mayfair and IC Cannes to start this year Refurbishments in line with stated plans
Slide 25: Inter-Continental Madrid
Inter-Continental Madrid
Slide 26: Inter-Continental Madrid
__ Inter-Continental Madrid
Slide 27: Drivers of growth (4): overall system scale
Drivers of growth (4): overall system scale Powerful system fund - $350m annual marketing spend Priority Club - 12.5m members - 5% revPAR premium - 2 million new members Over Over 33% 33% ofof room room nights nights via via our our reservations, reservations, Priority Priority Club, Club, marketing
Slide 28: Capturing long term industry growth
Capturing long term industry growth Inherent Positioning Differentiated brands with segment coverage International distribution and distribution scale Scale economies and system revenue delivery Priority Club Flexible business model Six Six Continents Continents Hotels Hotels well well positioned po
Slide 29: Summary
Summary Well positioned for growth Gaining high return management contract and franchise business Looking for value creation from our balance sheet strength and downturn opportunities Clear, strategic and financial criteria
Slide 30: David Bland, MD EMEA, Hotels
David Bland MD EMEADavid Bland Hotels Six Continents Managing Director EMEA Alastair Scott Head SixofContinents Investor Relations Hotels