Mitchells & Butlers PLC Annual Report 2020 (5442I)

TIDMMAB

RNS Number : 5442I

Mitchells & Butlers PLC

14 December 2020

14 December 2020

Mitchells & Butlers plc

LEI no. 213800JHYNDNB1NS2W10

Annual Report 2020

In compliance with Listing Rule 9.6.1, Mitchells & Butlers plc has today submitted the Company's Annual Report and Accounts 2020 (the Annual Report) to the National Storage Mechanism.

The Annual Report will shortly be available for inspection at: https://data.fca.org.uk/#/nsm/nationalstoragemechanism and can also be accessed on the Company's website at: www.mbplc.com/investors/annualreport

The Annual Report is expected to be despatched to shareholders on 21 December 2020.

The Company's Annual General Meeting is due to be held on Wednesday 24 March 2021. The Notice of the Annual General Meeting is expected to be despatched to shareholders in February 2021.

A condensed set of Mitchells & Butlers plc's financial statements and information on important events that have occurred during the year and their impact on the financial statements was included in the Company's Full Year Results announcement on 26 November 2020. That information, together with the information on Risks and Uncertainties given below and the directors' responsibilities statement below, constitutes the satisfaction of the requirements of DTR 6.3.5 in respect of information which is to be communicated via an RIS in unedited full text. This announcement is not a substitute for reading the full Annual Report and financial statements. To view the Full Year Results announcement, visit the Company website: www.mbplc.com/investors/

Risks and Uncertainties

This section highlights the top 13 principal risks and uncertainties that affect the Company, together with the key mitigating activities in place to manage those risks. This does not represent a comprehensive list of all of the risks that the Company faces, but focuses on those that are currently considered to be most relevant.

The processes that are used to identify and manage risks are described in the internal control and risk management statement on pages 68 and 69 of the Annual Report.

 
 Risk category and description              Controls/mitigating activities 
 1. Borrowing covenants                     -- The Company maintains headroom 
  There are risks that borrowing             against these risks. The finance 
  covenants are breached because             team conducts daily cash forecasting 
  of circumstances such as:                  with periodic reviews at the Treasury 
  i. The continuation of disruption          Committee, the role of which includes 
  due to the                                 ensuring that the Board Treasury 
  Covid-19 pandemic;                         Policy is adhered to, monitoring 
  ii. A change in the economic               its operation and agreeing appropriate 
  climate leading to reduced                 strategies for recommendation to 
  cash net inflows; or                       the Board. 
  iii. A material change in                  -- In addition, regular forecasting 
  the valuation of the property              and testing of covenant compliance 
  portfolio.                                 is performed and frequent communication 
                                             is maintained with the Securitisation 
  Risk increasing                            Trustee. 
  Although the required waivers              -- Annual property valuation. 
  are in place, this remains                 -- Detailed assessment of this 
  a critical risk with an increased          is included in the long-term viability 
  focus required given the                   statement. 
  current economic climate.                  -- We have taken measures to protect 
                                             the financial health of the business 
                                             whilst operating at reduced capacity 
                                             and continue to closely manage the 
                                             cash position of the Group. 
                                             -- In June 2020, we agreed the 
                                             waivers required to ensure we would 
                                             remain compliant with all covenant 
                                             requirements through an Extended 
                                             Case (downside) scenario (in respect 
                                             of both the securitisation and the 
                                             unsecured facilities). 
                                           ---------------------------------------------- 
 2. Material uncertainty                    -- Please refer to the Going Concern 
  Given the very high degree                 disclosures on page 44 of the Annual 
  of uncertainty resulting                   Report. 
  from the Covid-19 pandemic 
  and resulting restrictions 
  placed on trading in the 
  hospitality sector, a material 
  uncertainty therefore exists, 
  which may cast significant 
  doubt over the Group's ability 
  to trade as a going concern. 
 
  Risk increasing 
  Please refer to the Going 
  Concern disclosures on page 
  44 of the Annual Report. 
                                           ---------------------------------------------- 
 3. Declining sales performance             -- Right operational and commercial 
  This risk falls into the                   team and structure in place. Brand 
  below main categories:                     alignment ensures the right research 
                                             is done and is acted upon. 
  Sales : There is a risk                    -- Daily, weekly and periodic sales 
  that declining sales, concerns             reporting, monitoring and scrutiny 
  around consumer confidence,                activity is in place. 
  increased personal debt levels,            -- During the period of disruption 
  squeezes on disposable income              caused by the Covid-19 pandemic, 
  and rising inflation individually,         a steering committee met at least 
  together or in combination,                weekly and more frequently as needed 
  may adversely affect our                   to ensure appropriately diligent 
  market share and profitability,            supervision, monitoring and management 
  reducing headroom against                  of controls and risks. 
  securitisation tests. Increased            -- Our Eat Drink Share panel provides 
  social distancing measures/requirements    robust, quick and cost-effective 
  put in place may lead to                   research. This is our own panel 
  further negative impact in                 of 27,000 Mitchells & Butlers guests 
  sales/revenues.                            whom we can use for research purposes 
                                             for quick and cost-effective insights. 
  Consumer and market insight                -- Primary research in partnership 
  : If Mitchells & Butlers                   with brand/category teams. 
  fails to manage and develop                -- Working with suppliers to tap 
  its existing (and new) brands              into their research. 
  in line with consumer needs                -- Each brand has its own pricing 
  and market trends due to                   strategy. 
  failure to obtain or use                   -- Price promotions are in line 
  sufficient insight in a timely             with the agreed strategy. 
  manner, this may lead to                   -- Sales training for Management. 
  a decline in revenues and                  -- Consumer/insight-led innovation 
  profits.                                   process and development for new 
                                             brands. 
  Pricing and market changes                 -- Reduce guest complaints by improving 
  : If price changes are not                 the local management of social media 
  intelligently applied due                  responses (e.g. TripAdvisor responses). 
  to a lack of appreciation                  -- Increased digital marketing 
  of market sensitivities and                activity including new loyalty apps. 
  elasticities, this may result              -- Increased activity from takeaway 
  in decreased revenue and                   and delivery offerings. 
  profit.                                    -- Online guest satisfaction survey 
                                             to collect guest feedback. This 
  Consumer behaviour as a                    feedback, together with the results 
  result of Covid-19 :                       of research studies, is monitored 
  As pubs and restaurants reopen,            and evaluated by a dedicated guest 
  consumers may have a different             insight team to ensure that the 
  mindset to eating out, with                relevance to guests of the Company's 
  health and safety at the                   brands is maintained. 
  forefront of priorities.                   -- Our priority is to protect our 
  Guests may want greater insight            team members and guests, providing 
  into practices, and food                   an eating-out experience which can 
  supply chain information                   be enjoyed. We have very strong 
  to feel confident in their                 health and safety practices already 
  eating out experience. Equally             in place in our businesses, which 
  some consumers may not heed                we will enhance and evolve to tackle 
  the measures put in place                  the challenges we now face. We will 
  to restrict the spread of                  be transparent with guests as to 
  the virus, potentially putting             these measures such that they can 
  our team members and other                 trust in us and will clearly communicate 
  guests at risk.                            our expectations of guests to comply 
                                             with the measures put in place. 

                                             -- Measures are in place to ensure 
  Risk increasing                            that the business responds to guest 
  Overall risk is increasing                 requirements after the pandemic. 
  due to the decline of sales,               -- Government financial assistance, 
  as a direct impact of Government           such as furlough payments in respect 
  restrictions in response                   of employee costs, business rates 
  to the Covid-19 pandemic.                  suspension and reduction of VAT, 
                                             assisted to address the decline 
                                             in revenue. 
                                           ---------------------------------------------- 
 4. People planning and development         -- The Company makes significant 
  Mitchells & Butlers has a                  investment in training to ensure 
  strong guest focus and so                  that its people have the right skills 
  it is important that it is                 to perform their jobs successfully. 
  able to attract, retain,                   -- Furthermore, an employee survey 
  develop and motivate the                   is conducted annually to establish 
  best people with the right                 employee satisfaction and engagement 
  capabilities throughout the                and this is compared with other 
  organisation. There is a                   companies, as well as previous surveys. 
  risk that, without the right               Where appropriate, changes in working 
  people, our customer service               practices are made in response to 
  levels would be affected.                  the findings of these surveys. 
                                             -- Remuneration packages are benchmarked 
  The effects of Covid-19 have               to ensure that they remain competitive 
  been assessed in terms of                  and a talent review process is used 
  our overall people planning                to provide structured succession 
  and development risks. Prior               planning. 
  to Covid-19, the external                  -- The apprenticeship programme 
  pipeline for high potential                will also assist in mitigating against 
  talent, particularly in senior             the increasing risk in relation 
  roles was tightening due                   to EU workers. 
  to the rise in opportunity                 -- A new talent management system 
  in a growing and competitive               has been sourced. 
  marketplace. However, post                 -- In compliance with the furlough 
  Covid-19, the external recruitment         scheme, we were able to continue 
  activity over the prior year               employee training so that staff 
  has also shown that replacement            were fully trained on new ways of 
  talent is no more than average             working for our reopening. 
  in terms of skills, behaviours 
  and cultural fit. 
 
  However, given the current 
  economic climate and the 
  anticipated high numbers 
  of redundancies across UK 
  employment in general, it 
  is expected that this position 
  may soften. We will therefore 
  keep these new and emerging 
  risks under review. 
 
  Risk increasing (specifically 
  in London/South East) 
  There are a large number 
  of EU workers within the 
  Group, particularly in London 
  and the South East. Therefore, 
  the overall risk is increasing 
  as the UK completes its transition 
  period following the UK's 
  departure from the EU. Restrictions 
  on the movement of labour 
  would have a material impact 
  on both the cost of labour 
  and access to talent. 
                                           ---------------------------------------------- 
 5. Business continuity and                 -- The Company has in place crisis 
  crisis management                          and continuity plans that are tested 
  Mitchells & Butlers relies                 and refreshed regularly. 
  on its food and drink supply               -- The Company's third-party back-up 
  chain and the key IT systems               facility, for Retail Support Centre 
  underlying the business to                 employees, has been successfully 
  serve its guests efficiently               tested to ensure critical business 
  and effectively. Supply chain              systems are able to function in 
  interruption, IT system failure            the event of a disaster. Following 
  or crises such as terrorist                Covid-19, new ways of working are 
  activity or the threat of                  in place for all Retail Support 
  a further disease pandemic                 Centre staff when the office is 
  might restrict sales or reduce             temporarily closed to employees. 
  operational effectiveness.                 Positively, all staff have the appropriate 
  Staff have the resources                   resources available to them in order 
  and ability to work remotely               to work remotely and in an efficient 
  rather than rely on access                 manner. 
  to the Retail Support Centre.              -- We have assessed risks associated 
                                             with remote working and cybersecurity 
                                             and are confident that those areas 
                                             are suitably controlled. 
                                           ---------------------------------------------- 
 6. Information security and                -- A detailed external review of 
  disaster recovery                          cyber security processes is performed 
  There is a risk that inadequate            on a regular basis in order to highlight 
  disaster recovery plans and                any gaps and address any challenges. 
  information security processes             As a result, a number of further 
  are in place to mitigate                   improvements have been made (and 
  against a system outage,                   continue to be made) to address 
  or failure to ensure appropriate           audit actions and strengthen overall 
  back-up facilities (covering               cyber controls. 
  key business systems and                   -- In addition, controls include: 
  the recovery of critical                   - The work carried out by the Group's 
  data) and loss of sensitive                cross-functional Information Security 
  data.                                      Steering Group. 
                                             - Group Assurance IT controls reviews. 
  Given the increase in the                  - Implementation and revision of 
  level and frequency of global              appropriate cyber security governance 
  cyber-attacks, the likelihood              policies and procedures. 
  of occurrence is therefore                 - Ongoing security awareness initiatives 
  increasing, although current               continue to be undertaken. 
  IT controls and monitoring                 - A regular cycle of penetration 
  tools are robust.                          testing. 
                                             - An effective implementation of 
  Risk of non-compliance with                a business-wide data protection 
  data protection laws is an                 compliance programme, including 
  increasing risk for the business           training of all relevant employees 
  to ensure full compliance                  and contractors. 
  remains up to date.                        - Increased focus on protecting 
                                             the business against potential cyber-attacks 
  Risk increasing                            has resulted in the implementation 
  The increased activity, information        of additional controls to mitigate 
  security and reliance on                   against such risks. 
  IT systems continues to be                 - Systems, processes and controls 
  a key focus to ensure critical             have been reviewed and updated to 
  IT systems are kept secure                 ensure compliance with data protection 
  and tested frequently and                  laws. 
  any vulnerabilities identified 
  are closed out efficiently. 
                                           ---------------------------------------------- 
 7. Wage cost inflation                     -- A detailed review of the risks 
  There is a risk that increased             associated with the National Living 
  costs associated with further              Wage has been completed. This review 
  increases to the National                  has been undertaken at a strategic 
  Living Wage may adversely                  level and seeks to ensure that appropriate 
  impact upon overall operational            mitigating actions are in place, 
  costs.                                     some of which are in relation to 
                                             how the Group carefully manages 
  The overall impact of Covid-19,            productivity and efficiency across 
  in relation to our wage cost               the estate. 
  inflation risk, has been                   -- We have successfully implemented 
  assessed by management. It                 a new Time and Attendance system 
  is unclear at this stage                   to improve the management controls 
  how Covid-19 may affect overall            and reporting of staff hours. 
  wage costs as we head into 
  FY 2021. Therefore, this 
  review will continue as part 
  of our review of all emerging 
  risks facing the business. 
 
  Risk increasing 
  Due to further increases 
  set by Government, labour 
  costs could continue to increase. 
                                           ---------------------------------------------- 
 8. Pension fund deficit                    -- The Company has made significant 
  The material value of the                  additional contributions to reduce 
  pension fund deficit remains               the funding deficit. In September 

  a risk.                                    2019, the Company reached agreement 
                                             on the triennial valuation of the 
                                             Group pension schemes as at 31 March 
                                             2019, with a funding shortfall of 
                                             GBP293m (March 2016 valuation: GBP451m 
                                             shortfall). 
                                             -- The Company will continue to 
                                             pay cash contributions (of GBP45m 
                                             p.a. RPI indexed from 1 April 2016) 
                                             to 2023, with an additional payment 
                                             of GBP13m into escrow in 2024 should 
                                             such further funding be required 
                                             at that time. 
                                             -- During the period, the Company 
                                             and the trustees of its defined 
                                             benefit schemes agreed to a suspension 
                                             of contributions for the period 
                                             from April to September 2020, with 
                                             such contributions being deferred 
                                             to the end of the respective recovery 
                                             periods. 
                                           ---------------------------------------------- 
 9. Failure to operate safely               -- Mitchells & Butlers maintains 
  and legally                                a robust programme of health and 
  A major health and safety                  safety checks both within its restaurants, 
  failure could lead to illness,             pubs and bars and throughout the 
  injury or loss of life or                  supply chain. 
  significant damage to the                  -- The dedicated Safety Assurance 
  Company's or a brand's reputation.         team uses a number of technical 
                                             partners including food technologists, 
  Social distancing measures:                microbiologists and allergen specialists 
  we support the need for social             to ensure that our food procedures 
  distancing measures to reduce              are safe. 
  the spread of Covid-19. While              -- Regular independent audits of 
  social distancing measures                 trading sites are performed to ensure 
  are in place the capacity                  that procedures are followed and 
  of our businesses will be                  that appropriate standards are maintained. 
  reduced, impacting the offer               -- If a business is identified 
  to our guests and the financial            as underperforming in terms of health 
  model of our operations.                   and safety standards, it is immediately 
  Given the unknown nature                   targeted for improvement. 
  of the virus the duration                  -- The Company maintains two food 
  of distancing measures is                  safety Primary Authority relationships. 
  uncertain.                                 These are held with Luton Borough 
                                             Council (May 2019) and Shared Regulatory 
  Risk increasing                            Services (November 2019) and provide 
  The overall risk is increasing             assured advice on matters in England 
  mainly due to the additional               and Wales respectively. Westminster 
  measures enforced as a result              City Council continue to provide 
  of the Covid-19 pandemic.                  support on health and safety matters 
  However, robust controls                   and Hampshire Fire Service for the 
  are in place.                              provision of support and guidance 
                                             on fire safety risks. 
                                             -- Food suppliers are required 
                                             to meet the British Retail Consortium 
                                             Global Standard for Food Safety 
                                             and are subject to regular safety 
                                             and quality audits. 
                                             -- Comprehensive health and safety 
                                             training programmes are in place. 
                                             -- We have applied a risk assessment 
                                             to each of our businesses and operate 
                                             under the new Covid-19 guidelines. 
                                             We have adapted the format and practices 
                                             of our sites to ensure that the 
                                             distancing guidelines provided by 
                                             the Government can be adhered to, 
                                             protecting both team members and 
                                             guests. 
                                             -- We continuously review the latest 
                                             Covid-19 guidelines and continue 
                                             to adapt our businesses in response. 
                                           ---------------------------------------------- 
 10. Cost of goods - price                  Overall, cost increases are mitigated 
  increases                                  as Mitchells & Butlers leverages 
  Food : The cost of food                    its scale to drive competitive cost 
  for resale increases due                   advantage and collaborates with 
  to changes in demand, food                 suppliers to increase efficiencies 
  legislation, exchange rates                in the supply chain. The fragmented 
  and/or production costs and                nature of the food supply industry 
  uncertainty of supply, leading             in the world commodity markets gives 
  to decreased profits.                      the Company the opportunity to source 
                                             products from a number of alternative 
  Drinks : The cost of drinks                suppliers in order to drive down 
  for resale increases due                   cost. Consideration has been given 
  to changes in demand, legislation,         to potential areas such as supply 
  exchange rates and production              chain risk (e.g. customs controls 
  costs, leading to decreased                on imports), labour risk and economic 
  profits.                                   disruption. Key mitigating activities 
                                             for food and drink are detailed 
  Goods not for resale : Increases           below: 
  in the cost of goods not 
  for resale and utilities                   Food: 
  costs as a result of increases             -- A Food Procurement Strategy 
  in global demand and uncertainty           is in place. 
  of supply in producing nations             -- Full reviews are carried out 
  can have a significant impact              on key categories to ensure optimum 
  on the cost base, consequently             value is achieved in each category. 
  impacting margins.                         -- A full range review was completed 
                                             in FY 2019 ensuring the correct 
  Brexit : Given that a large                number of products/suppliers. This 
  amount of food spend is sourced            is regularly reviewed. 
  from EU countries, the overall             -- Regular reporting of current 
  risk and impact of additional              and projected inflation. 
  costs is higher. In addition,              -- Good relationships with key 
  there is an increasing risk                suppliers. 
  of sourcing certain products 
  given the possibility of                   Drinks: 
  delays at ports following                  -- Each drinks category has a clearly 
  the end of the transition                  defined strategic sourcing plan 
  period following the UK leaving            to ensure Company scale is leveraged, 
  the EU. At the end of that                 the supply base is rationalised, 
  transition period, the cost                and consumer needs are met. 
  of goods may be impacted                   -- Good relationships with key 
  by changes in terms of trade               suppliers. 
  and therefore tariffs, additional          -- Supplier collaboration programmes 
  border controls and fluctuations           are in place. 
  in the value of sterling.                  -- Plans are in place to mitigate 
                                             Sugar Tax. 
  Risk increasing 
  The overall risk of price                  Brexit: 
  increases is increasing,                   Brexit risks have remained a key 
  largely due to the continued               focus and have been subject to continued 
  uncertainty around Brexit.                 regular review and development by 
                                             management during FY 2020. Brexit 
                                             risks and the mitigating action 
                                             plans are embedded within each of 
                                             the key risks, which are regularly 
                                             reviewed by both 'risk owners' and 
                                             the Risk Committee. 
 
                                             A number of key measures have been 
                                             taken to mitigate both the known 

                                             and emerging risks that Brexit may 
                                             present to the business. For example, 
                                             we have secured agreements with 
                                             our key suppliers which include: 
 
                                             -- buying ahead to mitigate the 
                                             increasing risk of a lack of availability 
                                             of products, upon the end of the 
                                             transition period for the UK's departure 
                                             from the EU. 
                                             -- Exploring the option to significantly 
                                             upweight the existing Cattle Scheme 
                                             in order to secure more UK beef. 
                                             -- Reviewing and update of key 
                                             contracts to secure the most commercially 
                                             effective supply of goods and pricing. 
                                             -- Identifying contingency markets 
                                             for the alternative supply of food 
                                             and drink, should it be required. 
                                             -- Strong commercial relationships 
                                             with key suppliers which have assisted 
                                             with securing an adequate supply 
                                             of goods in the event of a disruption. 
 
                                             Covid-19 
                                             During the Covid-19 pandemic, suppliers 
                                             have continued to remain very supportive 
                                             and no material further supply chain 
                                             associated risks have materialised. 
                                           ---------------------------------------------- 
 11. Food supply chain safety               -- Mitchells & Butlers has a Safety 
  Malicious or accidental contamination      Assurance team and uses a number 
  in the supply chain could                  of technical partners including 
  lead to food goods for resale              food technologists, food safety 
  being unfit for human consumption          experts, microbiologists, allergy 
  or being dangerous to consume.             consultants, trading standards specialists 
  This could lead to restrictions            and nutritionists. 
  in supply which in turn cause              -- Mitchells & Butlers uses a robust 
  an increase in cost of goods               system of detailed product specifications. 
  for resale and reduced sales               -- All food products are risk rated 
  due to consumer fears and                  using standard industry definitions 
  physical harm to guests/employees.         and assessment of the way the products 
                                             are used in Mitchells & Butlers' 
  Allergens are becoming an                  kitchens. Suppliers are then risk 
  increased risk within the                  rated according to their products. 
  industry. However, this is                 -- Each food supplier is audited 
  a well managed risk within                 at least once per annum in respect 
  the Group.                                 of safety and additionally in response 
                                             to any serious food safety complaint 
                                             or incident. 
                                             -- A robust response has been taken 
                                             to manage allergens and the associated 
                                             data within the menu cycle coupled 
                                             with a continuous review in place 
                                             to ensure controls remain appropriate. 
                                           ---------------------------------------------- 
 12. Health and lifestyle                   -- We monitor changing behaviour 
  concerns                                   in relation to health and lifestyle 
  Failure to respond to changing             issues and adapt our brands to appeal 
  consumer expectations in                   to changing needs ensuring that 
  relation to health and lifestyle           the brands remain relevant and competitive. 
  choices and our responsibility             -- We have set targets for ongoing 
  to facilitate those.                       sugar and salt reduction. 
                                             -- A plan is in place to provide 
  Risk increasing                            nutritional information for all 
  There is an increasing level               brands to allow customers to make 
  of focus from media and Government         informed decisions. 
  on health and obesity issues, 
  predominantly impacting the 
  UK. This heightened consumer 
  awareness has increased consumer 
  awareness of the health implications 
  of their eating and drinking 
  choices and it is important 
  that we continue to evolve 
  our offers to facilitate 
  consumers to make informed 
  decisions. Failure to meet 
  these expectations could 
  have both a financial and 
  reputational impact on the 
  business. Therefore, this 
  risk is increasing. 
                                           ---------------------------------------------- 
 13. Environment and sustainability         -- We have set challenging targets 
  Climate change, biodiversity               in key areas such as greenhouse 
  depletion and environmental                gas emissions, food waste, recycling 
  pollution present a risk                   and use of plastics (see page 18 
  to our ability to source                   of the Annual Report). 
  products, with food being                  -- We have completed an exercise 
  particularly at risk.                      to determine our baseline greenhouse 
                                             gas emissions from which we have 
  Risk increasing                            developed a plan to deliver our 
  The impact of extreme and                  ambitions of reducing emissions 
  longer-term shifts in weather              by 25% by 2030, which has been approved 
  patterns, natural resource                 by the Board. 
  depletion and other effects                -- We are working with the World 
  of climate change could impact             Resources Institute on their Cool 
  the business both financially              Food Pledge programme to reduce 
  and reputationally.                        the emissions of food supply chain 
  These factors could disrupt                links, which is a significant contributor 
  our supply chain and the                   to emissions globally. 
  ability to source products                 -- All direct palm oil purchases 
  due to reduced availability.               are now from Rainforest Alliance 
  Regulatory action to manage                approved suppliers. 
  climate change could result                -- We are working with industry 
  in the introduction of additional          collaboration groups to develop 
  taxes or restrictions being                a roadmap to sourcing sustainable 
  imposed.                                   soy in our supply chain. 
  The business also has a responsibility     -- We are developing initiatives 
  to continually aim to reduce               to reduce our consumption of natural 
  its usage of natural resources             resources, with an electricity workstream 
  and its negative impact on                 live in the business, and gas and 
  the climate. Therefore, this               water in the planning phases. 
  risk continues to increase. 
                                           ---------------------------------------------- 
 

Directors' responsibilities statement

The Annual Report contains the following statement regarding responsibility for the financial statements in compliance with DTR 4.1.12. This statement relates solely to the Annual Report and financial statements and is not connected to the extracted information set out in the Full Year Results announcement:

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

We confirm that to the best of our knowledge:

-- the financial statements, prepared in accordance with the relevant financial reporting framework, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole;

-- the Strategic report includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face; and

-- the Annual Report and Accounts, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company's position and performance, business model and strategy.

The Directors of Mitchells & Butlers plc are listed in the Annual Report and on the Mitchells & Butlers plc website, www.mbplc.com/investors/

For further information, please contact:

Investor Relations:

Amy de Marsac

0121 498 6514

Media:

James Murgatroyd (Finsbury)

020 7251 3 801

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December 14, 2020 07:30 ET (12:30 GMT)