Mitchells & Butlers plc · LSE:MAB
Mitchells & Butlers — Six Continents — Investor Presentation (2001)
11 slides from Mitchells & Butlers's investor presentation, 2001
Slide 1: Franchise or Own?
FRANCHISE OR OWN? RICHARD SOLOMONS CHIEF FINANCIAL OFFICER SIX CONTINENTS HOTELS
Slide 2: Business Resilience
SIX CONTINENTS PLC Business Resilience L c 4% as O& f i 6% i Americ P a c Asia Americas M & F EMEA O & L 21% 26% F 4% & A M er E t h EM / O Six Continents Retail i c r itv 7% 32% B *Pro-forma 2001 after adjusting for Inter-Continental Hong Kong, Posthouse and pubs sold.
Slide 3: Geographic Split of Hotels Profit
SIX CONTINENTS HOTELS Geographic Split of Hotels Profit* •Americas •EMEA •Asia Pacific •North America O & L 10% •UK 25% •ICH Hong Kong 2% –New York 3% –London 10% •ANZSP Region 2% –Chicago <1% –Provinces 15% •Other 3% –San Francisco <1% •France 7% –Miami 1% –Paris 5% –Other 5% –Other 2% •North Ameri
Slide 4: Each constituent in the franchise value chain has different requirements
Each constituent in the franchise value chain has a different set of requirements. Franchisor Hotel Owner Guest Brand Strength Property Returns Reward Programme Powerful Reservation Superior Revenue Distribution System Delivery Consistency Hotel Development, Simplicity of Operation Operating & Servi
Slide 5: Economics of ownership and franchise are at opposite ends of the return spectrum
The capital, revenue and profitability economics of ownership and franchise are at opposite ends of the return spectrum Example Example Incremental Property Incremental Franchise Capital 300 - Revenue 100 4.0 EBITDA 45 3.5 EBIT 35 3.5 Annual Capex 6 Additional assessments on franchisees to fund mark
Slide 6: We choose to own assets in a number of scenarios
We choose to own assets in a number of scenarios primarily as a way to grow and strengthen our brands •Development of a new brand •Where we are still developing the brand to achieve the necessary scale •Where there are positive synergies - we can add value •Prototype development Holiday Inn - Atlant
Slide 7: Asset ownership helps accelerate brand development through the franchise growth cycle
Asset ownership helps accelerate development of a brand through this franchise growth cycle. Ownership Franchise & Reduce Asset phase Management Intensity Long term Contract Phase segment High growth Brand Strength Low Time
Slide 8: Ownership Structure Around The World
Ownership Structure Around The World Proportion of Hotels Owned 17% 13% 2% <1% 50% Based on Interims 2001 release
Slide 9: Powerful Sales & Marketing Machine
Worldwide Sales & Marketing Spend Powerful Sales & Marketing Machine
Slide 10: Many other business models are used to balance return on capital
SIX CONTINENTS PLC In fact there are many other business models that we use and our aim is to choose the best balance to drive Six Continents return on capital and maximise the distribution growth of our brands. Asia Americas EMEA Pacific Financed Leased Owned
Slide 11: SIX CONTINENTS
SIX CONTINENTS