Investors

Mitchells & Butlers plc is a member of the FTSE 250 and runs some of the UK's best-loved restaurant and pub brands including All Bar One, Harvester, Toby Carvery, Brown's, Vintage Inns and Sizzling Pubs. Our vision is to be the UK's preferred choice for informal eating out, with great brands that satisfy key customer occasions, and as a result grow shareholder value.

Investor Overview

Mitchells & Butlers is the leading operator of restaurants and pubs in the UK. It listed on the London Stock Exchange in April 2003 and is a member of the FTSE 250. Its restaurants and pubs have some of the highest average sales and profits per site in the industry and it operates the best portfolio of brands in the UK, with a focus on growth in the eating-out market.

Market

Mitchells & Butlers operates in the eating-out and drinking-out markets, which have a combined size of some £70bn. The eating-out market has doubled in value over the past two decades to £43bn, whilst the drinking-out market is currently worth some £27bn, having declined over the last five years.

The three main trends impacting these markets are:

The growing appeal of eating-out
The resilience of drink sales with food
The rapid decline of drinking-out not in conjunction with food

Strategy

Mitchells & Butlers has developed its business strategy to focus on the growth parts of the eating and drinking-out markets. Our objective is to be the UK's preferred choice for informal eating and drinking-out with market-leading brands that provide excellent customer service, range and quality across the key customer occasions and grow shareholder value. Our strategy to achieve this goal has five key elements:

Focusing the business on the growth in the eating-out market
Developing national brands with high customer affinity and relevance
Generating high returns on investment through scale advantages
Extending the skill base of operational excellence and consumer focus
Continuing the sound financial base with a flexible approach to property ownership

Performance

Mitchells & Butlers has delivered a resilient set of results in FY 2011 despite a challenging year with a difficult consumer environment. Sales in the Retained Estate were up 4.9% to £1,762m, with like-for-like sales growth of 2.6%. EBIT was up 1.1% to £288m, despite £30m of incremental regulatory and inflationary costs and £8m of start-up costs from brand roll-out. Our brand roll-out programme has progressed well with £82m of expansionary capital invested in the year and EBITDA returns of 21% achieved on expansionary capital invested in FY 2010 and FY 2011. Net debt was reduced by more than £400m during FY 2011 and net debt:EBITDA is now at 4.7 times.

Corporate Governance

The Board is responsible for ensuring compliance with the Combined Code and recognises the importance of good corporate governance in creating a sustainable, successful and profitable business. This includes reviewing internal controls, ensuring that there is an appropriate balance of skills and experience represented on the Board and maintaining relations with shareholders.