Mitchells & Butlers plc · LSE:MAB
Mitchells & Butlers — FY2015 Earnings Presentation
28 slides from Mitchells & Butlers's earnings presentation, 2015
Slide 1: Full Year Results 2015
Full Year Results 2015 Bob Ivell Chairman
Slide 2: Financial Review 2015
Financial Review 2015 Tim Jones Finance Director
Slide 3: Income statement
Income statement (Pre-exceptional items) FY 2015 FY 2014 £m £m Revenue 2,101 1,970 +6.6% Operating costs (1,773) (1,657) Operating profit 328 313 +4.8% Interest (129) (131) Pensions finance charge (15) (10) Profit before tax 184 172 +7.0% Operating margin 15.6% 15.9% (0.3 ppts) Earnings per share 35
Slide 4: Like-for-like sales growth
Like-for-like sales growth Week 1 – 32 Week 33 – 52 Week 1 – 52 Week 1 – 8 FY 2015 FY 2015 FY 2015 FY 2016 Food 2.5% 1.0% 1.9.% (2.1%) Drink 0.3% (1.4%) (0.4%) (1.2%) Total 1.4% 0.0% 0.8% (1.6%) Financial Review 2015 –4–
Slide 5: Like-for-like volume and spend trends
Like-for-like volume and spend trends Food Drink 8.0% 8.0% 6.0% 6.0% 4.0% 4.0% 2.0% 2.0% 0.0% 0.0% (2.0%) (2.0%) (4.0%) (4.0%) (6.0%) FY10 FY11 FY12 FY13 FY14 FY15 (6.0%) FY10 FY11 FY12 FY13 FY14 FY15 Volume Price / spend Financial Review 2015 –5–
Slide 6: EBIT movement
EBIT movement £6m (£1m) £15m £5m (£10m) FY14 Orchid Direct Like-for- FY14 new FY15 new FY15 £313m cost like openings openings £328m inflationa trading Note: a Direct costs include wages and salaries, utilities and goods for resale Financial Review 2015 –6–
Slide 7: Interest charge
Interest charge FY 2015 FY 2014 £m £m Finance costs (130) (132) Finance revenue 1 1 Net pensions finance charge (15) (10) Total interest (144) (141) • Expected net pensions finance charge for FY 2016 is £12m Financial Review 2015 –7–
Slide 8: Group cash flow
Group cash flow FY 2015 £m FY 2014 £m EBITDA 439 422 Working capital / non cash items 48 18 Pension deficit contributions (86) (49) Cash flow from operations 401 391 Maintenance & infrastructure capex (116) (120) Net interest paid (127) (135) Tax (25) (34) Free cash flow before exceptional items 133
Slide 9: Dividend
Dividend FY 2015 FY 2014 £m £m Net cash flow 89 (199) Mandatory bond amortisation (61) (58) Add back: one-off pension contribution 40 - Surplus cash 68 (257) • Criteria set out in pensions agreement met • Recommended 5 pence per share final dividend • Represents 2/3 ongoing full-year payout • Policy
Slide 10: Property
Property • Freehold and long leasehold properties valued annually • 20% of sites inspected per annum • Short leaseholds assessed for impairment • Total value of £4.2bn (FY 2014 £4.2bn) FY 2015 FY 2014 £m £m Revaluation (54) (25) Income statement Other impairment (11) (11) Balance sheet Revaluation r
Slide 11: Capital expenditure and returns
Capital expenditure and returns FY 2015 FY 2014 £m £m Maintenance and infrastructure 116 120 Expansionary 46 42 Total capital expenditure 162 162 • 14 new sites and 51 conversions completed in FY 2015 • FY 2016 guidance: increased maintenance capex through accelerated remodel spend, similar level of
Slide 12: Orchid conversions and synergies
Orchid 35.0 25.0 15.0 Acquired FY 2015 FY 2016 FY 2017 Closure Synergies Synergies Synergies costs Conversions Conversions Conversions • 41 conversions completed • Head office closed, support functions absorbed • Increased EBIT contribution of £5m in FY 2015 Note: Annualised EBITDA excluding like-fo
Slide 13: Key messages
Key messages • Like-for-like sales growth of 0.8% following weak Q4 • Strong earnings growth of 9.5% • Orchid integration on track • Final dividend reinstated at 5 pence per share • Like-for-like sales down 1.6% in the first eight weeks of FY 2016 Financial Review 2015 – 13 –
Slide 14: Business Review 2015
Business Review 2015 Phil Urban Chief Executive
Slide 15: Agenda
Agenda • Introduction • External landscape • M&B: my observations • My priorities • Summary Business Review 2015 – 15 –
Slide 16: External landscape
External landscape The market Consumers National living wage Business Review 2015 – 16 –
Slide 17: The market
The market • Increasingly competitive market - Large number of new entrants - Good quality - Located on our doorstep • Entrants will grow the market over time Business Review 2015 – 17 –
Slide 18: Consumers
Consumers • Increasingly high demands - Value - Service - Availability • Always connected Business Review 2015 – 18 –
Slide 19: National living wage
National living wage • Significant impact on the industry • Nobody can ‘control’ their way out of NLW • Rounded and iterative approach required - Efficiency - Brand propositions - Price - Consumer opportunity Business Review 2015 – 19 –
Slide 20: M&B: my observations
M&B: my observations • Giant of the industry • Portfolio of best brands and locations • Freehold asset backing • Quality people Business Review 2015 – 20 –
Slide 21: So why have results not been stronger?
So why have results not been stronger? Strong brands Engaging Strong Significant and assets culture infrastructure scale BUT BUT BUT BUT Lacking Unbalanced Slow to Lack of commercial portfolio innovate pace edge Business Review 2015 – 21 –
Slide 22: How do we address these issues?
How do we address these issues?
Slide 23: My priorities
My priorities Build a more Instil a more Increase the pace of balanced business commercial culture execution and innovation Business Review 2015 – 23 –
Slide 24: Build a more balanced business
Build a more balanced business • Clearly targeted brand propositions • Balanced portfolio • Right brand, right site Business Review 2015 – 24 –
Slide 25: Instil a more commercial culture
Instil a more commercial culture • Results-orientated culture • Focus on profitable sales • Simplify to drive pace Business Review 2015 – 25 –
Slide 26: Increase the pace of execution and innovation
Increase the pace of execution and innovation • Upgrade digital innovation • Encourage trials and NPD Business Review 2015 – 26 –
Slide 27: My priorities
My priorities Build a more Instil a more Increase the pace of balanced business commercial culture execution and innovation Business Review 2015 – 27 –
Slide 28: Questions
Questions