Mitchells & Butlers : Analyst presentation(3.95 MB) (Analyst presentation)

‌Full Year Results 2025

‌Strong operational performance

Highlights

• Like-for-like sales growth of 4.3% - consistently ahead of the market

• Adjusted operating profit growth of 5.8% to £330m

• Record non-financial metrics for guest and teams

• Accelerated capital programme delivering strong returns

• Well-positioned for the year ahead

Mitchells & Butlers - Restricted

‌Financial Review FY 2025 Tim Jones Chief Financial Officer

Mitchells & Butlers - Restricted

‌Income Statement - strong trading momentum

	FY 2025 52 week £m	FY 2024 52 week £m	Movement %
Revenue	2,711	2,610	+3.9%
Operating costs	(2,381)	(2,298)
Operating profit	330	312	+5.8%
Interest	(91)	(99)
Pensions finance income / (charge)	7	(2)
Profit before tax	246	211	+16.6%
Operating margin	12.2%	12.0%	+0.2ppts
Earnings/(loss) per share	30.9p	26.4p	+17.0%

(before adjusted items)

‌Diversified estate delivering strong like-for-like sales

Easter moves to April (H2) in FY25

• Like-for-like sales growth of 4.3%,

• Consistent market outperformance across all cohorts

• Volumes broadly flat in both food and drink

• Post year end (8 weeks) sales growth of 3.8%, strengthened from Q4 FY 2025

‌Adjusted EBIT movement

+£20m

+£25m

£(5)m

£(100)m

+£78m

FY 2024

Margin

12.0%

Margin

12.2%

£312m

FY 2024 openings and remodels

FY 2025 openings and remodels

Like-for-like trading

Efficiencies

Cost headwinds FY 2025

£330m

‌Cost headwinds driven by labour and food

• Food cost inflation driven by red meat. Not anticipated to

be structural.

• Labour increases include

  • Annualisation of National Living Wage and National Insurance Contributions increases from April 2025

  • National Living wage increase of 4.1% from April 2026

• 50% of FY 2026 energy requirement bought forward to date

• Includes preliminary estimate of the impact of Chancellor's

Autumn Budget

• Aggregate increase of c.6% of cost base

130
120
100
90
80
70
60
50
40
30
20
10
0	Food/Drink		Labour	Other site and	Energy
				central costs

FY 2026

Gross cost headwinds before mitigation

‌Strong cash flow

	FY 2025 £m	FY 2024 £m
Operating cash flow	484	454
Working capital movement	(15)	15
Pension - net returns	11	34
Capital expenditure	(181)	(154)
Acquisitions of Pesto Restaurants Ltd	-	(2)
Lease principal and interest	(53)	(57)
Net interest	(73)	(82)
Tax	(24)	(18)
Purchase of own shares, disposal proceeds and other	(3)	(5)
Net cash flow before bond amortisation	146	185
Mandatory bond amortisation	(130)	(123)
Net cash flow	16	62

• Final pension escrow return

• Expansion of capital investment programme generating strong returns

• Anticipated to increase further to c.£210m in FY26 with further potential for site acqusitions

• Covid tax losses to be used up in early FY26

• Net cashflow of £16m after bond amortization

‌Balance sheet strength

Assets

FY 2025

£m

FY 2024

£m

Property, plant and equipment

179

ROU leases Pension surplus Other

4,591 4,419

291 307

132 164

Non-current assets	5,069	4,943	buy out/in. Ongoing use through offset against DC contributions at c.£10m pa
Cash	216	176
Other	108	126
Total assets	5,393	5,245
Liabilities:

55 53

Overall increase 3.9% driven by revaluation uplift

Surplus now substantially locked in through

(879)

Lease liabilities	(434)	(447)
Pension liabilities	(22)	(25)
Other	(1,047)	(1,023)
Total Liabilities	(2,577)	(2,679)
Net Assets	2,816	2,566
Net Assets per Share	£4.76	£4.33

Borrowings

(1,074)

(1,184)

Net Debt of £0.8bn excluding leases and derivatives

Gearing (MAT ebitda)

- 1.8 times excluding leases

- 2.7 times including leases

‌Value creation through deleverage

£m

Net debt: ebitda

• Excellent progress in reducing borrowings since 2010 from

  5.1 times ebitda to 1.8 times

• Pension liability of £400m now a derisked asset of £100m, reducing future cash outgoings by c.£10m pa

• Will continue to reduce debt, enhance resilience and invest in the business driving further outperformance and equity value

  £m • WBS break costs will decline over time, currently estimated

  at c.£45m

• Capital allocation therefore unlikely to be reset in the near

  term

• Monitor as WBS matures, when shareholder returns will be considered alongside investment opportunities

‌Strong performance

Financial Highlights

• Like-for-like sales growth of 4.3% - well ahead of the market

• Adjusted operating profit growth of 5.8% to £330m

• Operating margin up 0.2ppts to 12.2%

Progress on strategic Priorities

• Strong cashflow, net debt reduced to £843m, 1.8 times EBITDA (excl. leases)

• Increased capital programme generating strong returns

• Record levels of non-financial metrics - staff engagement, guest review and practices

  Outlook

• Sales performance expected to continue to outperform the market

• Cost headwinds of £130m for FY 2026, 6% of cost base, expected to be offset by sales and efficiencies

• Capex to increase to c.£210m in FY 2026 with further potential for site acquisitions

‌Phil Urban Chief Executive Officer

Mitchells & Butlers - Restricted

• 9 years of sustained market outperformance (CGA Business Tracker)

• Reflects the strength of our brand portfolio and estate locations

• Wet-led brands delivering particularly strong growth

‌Sustained outperformance vs. the market

2025

2026

‌Responding to cost challenge

• Cost headwinds in FY 2026 of £130m

• Annualisation of employer national insurance changes

• Food inflation driven by short term increases red meat cost

• Confident in ability to mitigate costs in FY 2026 and remain well-positioned for future years

‌Competitive advantage

Our high-quality estate of 83% freehold sites, diversified portfolio of brands and proven management team set us apart.

• 1,631 managed businesses across 17 proven brand formats

• 81% of the population live within 5 miles of an M&B business

• Average weekly turnover £31.2k and ebitda £385k per site making us the largest in the industry

• Each business positioned at the premium end of their market

• Investment in food innovation kitchen supporting offer evolution

  UK sales by region FY25

  
  
  ‌Significant investment in technology
  
  

  Industry leading technology Range of guest facing and back-of-house technologies successfully rolled out

  Commercial benefits Each new technology has delivered sales increases or

  improved efficiencies

  Pipeline of future investment

  New technology to be integrated in FY 2026 including HR and Payroll platform and CRM system managing communication to

  Selection of technology successfully implemented:

  Order at table - enhanced guest experience Digital stock taking - saves time and improves accuracy Auto order - reduced stock-outs and improved efficiency

  Employee App - better experience for teams enhancing engagement Labour rostering - improved productivity

13.9m consented guests

‌Record people metrics

Metrics

Turnover

55%

Retail Team Engagement

87.7

Success requires great service at all times which requires a great team of people:

• People metrics are at all time highs

• Significant investment in Chef Academy

• Number One Apprenticeship Employer with the Department of Education

• Investment in digital learning and development platforms which delivered 1.2m modules of training in FY 2025

Apprenticeships completed FY25

695



‌Capital Investment delivering robust returns

Optimising our high-quality estate through

systematic upgrade of amenities.

• Committed to a 7-year investment cycle

• Payback within 5 years ensures value for

the business

• Design evolution ensures brands remain

authentic and relevant

• Compelling returns from our FY 2025

remodel programme - growing market share

Cost Inflation

Product Development

Sales

Capital Investment

Data Driven Insights

Our Spaces

Stock Management

Loyalty

Sustainability

Better Bevs

Training

‌Ignite driving sales and efficiency

•

Began as a transformation

programme in 2015

•

Delivers continuous improvement

through established ways of working

•

40-50 initiatives live at any one time

driving incremental profit

Productivity

• Tim Jones to retire mid-2026 when we will be delighted to welcome Emma Harris

• Building Executive team for the future

• Successfully navigated a number of retirements over recent years

‌Executive Committee succession

‌Building value into the future

Clear capital

allocation policy

Future capital

structure

Opportunity for

strategic growth

Mitchells & Butlers - Restricted

‌Well positioned for the future

FY 2025 Highlights

• Like-for-like sales growth of 4.3% - consistently ahead of the market

• Adjusted operating profit growth of 5.8% to £330m

• Record non-financial metrics for guest and teams

• Accelerated capital programme delivering strong returns of over 36% on remodels

Our high-quality estate, diversified portfolio of proven brand formats and strong balance sheet leave us uniquely well positioned for future value creation.

Mitchells & Butlers - Restricted

‌Questions

Mitchells & Butlers - Restricted

‌Full Year Results 2025 Supplementary slides

Mitchells & Butlers - Restricted

Total Managed 1

Franchised

Total MAB

Opening outlets (start FY 2025)

1,726

Transfers 2

-

Disposals

(9)

Acquisitions

1

Closing outlets (end FY 2025)

1,643

75

1,718

Notes:

1. Closing managed total includes 12 non-trading pubs

2. Lodges attached to sites do not appear as a separate outlet

‌FY 2025 - Outlet reconciliation

1,666	60
(15)	15
(9)	-
1	-

‌FY 2025 - Securitisation profile

£ms

Year to