Slide 1: FY22 Preliminary Results
Align to ARA front cover FY22 Preliminary Results 28 April 2022
Slide 2: Contents
Contents Performance update Alison Brittain p3 Financial review Hemant Patel p11 Driving long-term value Alison Brittain p18 2
Slide 3: Full year highlights and outlook
Full year highlights and outlook • Continued hotel market outperformance in the UK driven by our ‘Investing to win’ commercial strategy, our strong brand, scale, direct distribution and the strong appeal of the Premier Inn customer offering • Strong hotel trading in the UK, exceeding pre-pandemic le
Slide 4: Strong recovery: returning to profitability
Strong recovery: returning to profitability Commercial initiatives and strong appeal of Premier Inn’s customer offering driving recovery as Government restrictions relaxed Total sales £2,072m £1,703m £589m FY20 FY21 FY22 Statutory profit before tax £280m £58m FY20 FY21 FY22 £(1,007)m Restrictions ea
Slide 5: Premier Inn UK strong trading
Premier Inn UK strong trading Accommodation sales ahead of pre-COVID levels H1: Certain restrictions Dec - Jan: Feb - Apr: on hotel and Increased restrictions in parts of the UK due to Omicron Restrictions lifted restaurant visits variant Occupancy Premier Inn UK 130% Accommodation sales recovered v
Slide 6: Premier Inn UK: continued market outperformance
Premier Inn UK: continued market outperformance Premier Inn’s strong brand, scale and direct distribution helping maintain material outperformance of the M&E market… Total sales outperformance vs. the M&E hotel market PI outperformance1 vs M&E 12.5% 13.3% 17.1% 19.0% 20.3% 16.5% 19.4% 28.3% 3 4 H1 S
Slide 7: Germany: Encouraging trading in a challenging market
Germany: Encouraging trading in a challenging market Greater level of restrictions H1: Mar - Apr: Certain restrictions Oct - Nov: Dec - Feb: Restrictions easing and on hotel and Increased restrictions due to Delta variant Further restrictions due to Omicron variant lifted in April restaurant visits
Slide 8: Broad based recovery into FY23
Broad based recovery into FY23 Demand recovering across all customer groups Very strong performance in the UK Regions, recovery in London Premier Inn accommodation sales versus FY20 Regions 31.2% Leisure Ahead of pre-COVID levels 19.9% 10.8% (0.2)% 1 FY21 Q1 Q2 Q3 Q4 Q1 to date Business tradespeople
Slide 9: UK: Broad based recovery into FY23
UK: Broad based recovery into FY23 Strong pricing into FY23 helping offset inflationary headwinds 1 c.20% Q1 Booked & Stayed ARR vs FY20 Q2 pricing is also ahead of pre- COVID levels, although we are only 15-25% booked for Q2 (in line with pre-COVID levels) 9% 9% 7% 8% FY20 (pre-COVID) (3)% Airports
Slide 10: Continued confidence in returning to pre-COVID UK profit margins
Continued confidence in returning to pre-COVID UK profit margins CAPITALISE ON STRUCTURAL OPPORTUNITIES AND COMPETITIVE ADVANTAGE Customer behaviour Competitive opportunities Initiatives Increased domestic tourism Accelerated independent decline Advantaged commercial model Resilient tradespe
Slide 11: Financial Review
FINANCIAL REVIEW | Hemant Patel - CFO 11 11 11
Slide 12: CFO Overview: Focusing on long-term growth and returns
CFO Overview: Focusing on long-term growth and returns • Recovery in revenues and profit, driven by competitive strength and successful commercial initiatives: STRONG RECOVERY • Statutory revenue growth of 189% versus FY21 • Statutory profit before tax of £58.2m (versus a loss of £1,007.4m in FY21)
Slide 13: Financial highlights: Return to profitability
Financial highlights: Return to profitability £m FY22 ¹ FY21 FY20 • FY22 performance reflects the strong recovery in sales post Statutory revenue 1,703.4 589.4 2,071.5 COVID-19 restrictions and estate growth in the UK and Germany, driving statutory revenues 189% ahead of FY21 Adjusted revenue 1,703.
Slide 14: Continued market outperformance in the UK; rapid estate growth in Germany
Continued market outperformance in the UK; rapid estate growth in Germany Premier Inn UK Premier Inn Germany £m FY22 FY21 FY20 £m FY22 FY21 FY20 Statutory revenue 1,668.2 577.4 2,050.3 Statutory revenue 35.2 11.5 11.8 Other income (excl. rental income) 70.1 142.5 13.6 Other income (excl. rental inco
Slide 15: FY22 Cashflow: Strong trading in the year resulting in operating cash inflow
FY22 Cashflow: Strong trading in the year resulting in operating cash inflow £m H1: £220.4m US PPs repaid H2: £83.5m US PPs repaid ¹ H1 FY22: £(113.7)m outflow H2 FY22: £ (3.2)m outflow Benefit of Government support: UK: £126.5m Germany: £44.3m Net (debt) / cash movement Available liquidity £m £m Ne
Slide 16: Strong balance sheet a reflection of continued capital discipline
Strong balance sheet a reflection of continued capital discipline RETURNING TO INVESTMENT GRADE METRICS ASSET BACKED BALANCE SHEET Return to FFO investment grade leverage in FY23 • Property estate last valued in 2018: • Individual sale and leaseback basis 5.0x • Yield range: 4.5% - 5.0% 4.0x Investm
Slide 17: FY23 outlook and current trading
FY23 outlook and current trading UK GERMANY • FY23 loss before tax expected to be c.£60m-£70m driven by slower • Investment: £20m versus FY22 (as announced at H1 FY22 results) market recovery • Room growth: c.1,500-2,000 • Room growth: c.2,000-2,500 COSTS BALANCE SHEET • Expected year-on-year cost i
Slide 18: Driving Long-Term Value
DRIVING LONG-TERM VALUE | Alison Brittain – CEO 18 18 18
Slide 19: Premier Inn's customer proposition has a strong appeal
Premier Inn’s customer proposition has a strong appeal [Scale provides customer choice]1 CHOICE UK’s favourite VALUE hotel brand…by FOR MONEY a clear margin UK’s largest hotel brand1 High quality budget offering with broad appeal 82k Average room rate High quality rooms pre-COVID £61.50 44k 18k 17k
Slide 20: UK: Enhanced structural opportunities
UK: Enhanced structural opportunities ACCELERATING DECLINE IN INDEPENDENT SUPPLY 1 678k rooms 713k rooms 6% 11% Premier Inn 13% • Clear evidence of distress in the 17% Budget branded independent sector 24% • Sample of >35% of UK independent room Other branded Decline of 1.0pp stock indicates 3x per
Slide 21: Multi-year UK growth opportunity
Multi-year UK growth opportunity CLEAR ROUTE TO 110k ROOMS ADDING 2-3k ROOMS EVERY YEAR New hotels in prime locations, with improved operational Equates to >33% UK estate growth opportunity efficiency and operating leverage MANCHESTER PICCADILLY THURSO MANCHESTER PICCADILLY LONDON SOHO, BERWICK ST S
Slide 22: Leveraging our commercial model
Leveraging our commercial model ADAPTABLE PRICING STRATEGY STRONG DEMAND INDICATORS INTO H1 FY23 Price outperformance in areas of high demand Hotel page visits2 for stays in H1 FY23 versus FY20 H2 Premier Inn KPIs – Lake District Leisure Business Growth vs FY20 vs the market1 ARR +21.6% +14.1pp Occu
Slide 23: Investing to win: Premier Plus rooms
Investing to win: Premier Plus rooms BOOSTING OUR ROLL-OUT OF PREMIER PLUS ROOMS BROAD APPEAL INCREASES POTENTIAL FOOTPRINT 2,000 Premier Plus rooms with over 1,200 planned for FY23 Location of hotels with Premier Plus rooms Driving higher price and occupancy1 ARR Occupancy Net RevPAR +10pp +28% +60
Slide 24: Investing to win: enhanced business offer
Investing to win: enhanced business offer BROADENING OUR BUSINESS CUSTOMER REACH DRIVING STRONGER BUSINESS DEMAND Strong midweek outperformance versus the market 1 BUSINESS ACCOUNTS Premier Inn M&E market Streamlined sign-up process 30% 10% RELAUNCHED “BUSINESS BOOKER” PORTAL 19/01 30/01 10/02 21/02
Slide 25: Investing to win: Food & beverage strategy
Investing to win: Food & beverage strategy OUR F&B PROPOSITION NEW PRICING STRATEGY AND MENU DESIGN • Over 800 restaurants across the UK • Food & beverage offering tailored to local demand • Core pillar in our customer proposition; guests value our breakfast offering • Fundamental to achieving high
Slide 26: Cost efficiency programme
Cost efficiency programme CASE STUDY: REDUCING SHIPPING FREIGHT COSTS Strong track record of material cost savings and offsetting inflationary pressures BEFORE: Negotiated shipping costs 4-year £140m efficiency programme directly with freight agents NOW: Developed an agreement with our FY17 £37m lar
Slide 27: Germany: A compelling proposition in a highly attractive market
Germany: A compelling proposition in a highly attractive market A HIGHLY ATTRACTIVE MARKET – OPPORTUNITY TO REPLICATE UK SUCCESS Highly fragmented Significant opportunity Greater demand for Pre-COVID budget Structural barriers to Market is 40% larger market: 72% to acquire assets with short-stay dom
Slide 28: Long-term value creation: Germany
Long-term value creation: Germany BUILDING A NATIONAL NETWORK RAPID ESTATE GROWTH Open sites Committed sites 24k 21k 18k 18k 16k 16k 15k 14k • 31 hotels added since 6k February 2020 • 37 operational hotels • 41 pipeline hotels, 3 added so far in 2022 Open Open & committed A platform to outperform an
Slide 29: Encouraging performance in a challenging market
Encouraging performance in a challenging market LEADING CUSTOMER PROPOSITION HOTELS BENCHMARKING WELL AGAINST THE MARKET 1 Occupancy ahead of market as we build brand recognition … Average Average Occupancy (%) Housekeeping Service 100% Premier Inn 3 Market 87 88 80% 0.9 1.3 60% Average Average Over
Slide 30: A significant commitment to the German market
A significant commitment to the German market Investing at least £250m2 and opening 2k-3k rooms every Capital invested and committed to date: >£900m1 year Confident in acquisition opportunities Expected returns 10-14%2 Disciplined capital investment to deliver good long-term returns 1: Exchange rate
Slide 31: Industry-leading sustainability and responsibility programme
Industry-leading sustainability and responsibility programme Key achievements in FY22 Our long-term commitments Committed to SBTi for net zero AA Rating on MCSI Rated Top Employer for the 12th carbon target by 2040 Responsibility consecutive year CARBON NET ZERO BY 2040 Financial Times Diversity Low
Slide 32: Well positioned for long-term value creation
Well positioned for long-term value creation FOCUS ON OUR STRENGTHS TO ENHANCE CAPABILITY TO 1 GROW AND INNOVATE IN THE UK 2 GROW IN GERMANY 3 SUPPORT LONG-TERM GROWTH UK Germany UK + Germany ENHANCED STRUCTURAL OPPORTUNITIES BEST-IN-CLASS OPERATIONS Market supply contraction accelerating PI market
Slide 33: Full year highlights and outlook
Full year highlights and outlook • Continued hotel market outperformance in the UK driven by our ‘Investing to win’ commercial strategy, our strong brand, scale, direct distribution and the strong appeal of the Premier Inn customer offering • Strong hotel trading in the UK, exceeding pre-pandemic le
Slide 34: Appendices
APPENDICES I Additional slides p35 II Definitions p38 III Supplementary information p39 IV Cautionary statement p40 Whitbread ADR programme – WTDBY Whitbread has established a sponsored Level I American Depositary Receipt (ADR) programme for which Deutsche Bank perform the role of depositary bank. T
Slide 35: Appendix I | Broad customer reach
Appendix I | Broad customer reach Over-indexing in UK regions, Over-indexing in domestic Even split of leisure and Broad business mix is resilient that will recover faster than demand that will recover business customers London faster than international Regions vs London Domestic vs Inbound Leisure
Slide 36: Appendix II | Strong balance sheet
Appendix II | Strong balance sheet OPERATIONAL AND FINANCIAL FLEXIBILITY BALANCED DEBT STRUCTURE AND MATURITY PROFILE Freehold Leasehold £m Undrawn RCF ¹ UK Public Bond (uncovenanted) Open 58% 42% 800 Green Bond (uncovenanted) Total estate (open and committed) 55% 45% 600 Germany Open 26% 74% 400 To
Slide 37: Appendix III | Brand strength
Appendix III | Brand strength UK’S FAVOURITE HOTEL BRAND 2 1 35.0 Metric Variance 1st to 2nd Hilton 30.0 Satisfaction 39.6 1st 18.3 Premier Inn Impression 39.9 1st 11.8 25.0 Marriott Value 41.2 1st 15.6 Quality score 20.0 Likelihood-to-recommend 36.6 1st 19.9 Quality 27.0 2nd* (4.5) Crowne 15.0 *Fir
Slide 38: Appendix II | Definitions
Appendix II | Definitions Accommodation sales Premier Inn accommodation revenue excluding non-room income such as food and beverage Adjusted basic EPS Adjusted profit attributable to the parent shareholders divided by the basic weighted average number of ordinary shares Profit before adjusting items
Slide 39: Appendix III | Supplementary information
Appendix III | Supplementary information Further information is available in a supporting supplementary information pack (in Microsoft Excel format) from www.whitbread.co.uk/investors/results-reports-and-presentations. This information includes: A. Hotel and restaurant estate B. Financial summary, K
Slide 40: Appendix IV | Cautionary statement
Appendix IV | Cautionary statement Nothing contained in this presentation is intended to constitute an offer, invitation or inducement to engage in an investment activity for the purposes of the prohibition on financial promotions under the Financial Services and Markets Act 2000. In making this pre