Whitbread Plc · LSE:WTB
Whitbread — FY2023 Earnings Presentation
43 slides from Whitbread's earnings presentation, Apr 25, 2023
Slide 1: FY23 Preliminary Results
This document has been marked as Non-Confidential FY23 PRELIMINARY RESULTS 25 APRIL 2023
Slide 2: Contents
This document has been marked as Non-Confidential CONTENTS FY23 PERFORMANCE AND OUTLOOK Dominic Paul FINANCIAL REVIEW Hemant Patel DRIVING GROWTH AND RETURNS Dominic Paul 2
Slide 3: FY23 Performance and Outlook
This document has been marked as Non-Confidential FY23 PERFORMANCE AND OUTLOOK DOMINIC PAUL - CEO
Slide 4: FY23 | Premier Inn Drives Outstanding Performance
This document has been marked as Non-Confidential FY23 | PREMIER INN DRIVES OUTSTANDING PERFORMANCE 1 2 2 † REVENUE EBITDAR PBT UK ROCE +27% +18% +15% 12.9% £m £m £m % 2,625 888 413 12.9% 358 11.2% 753 2,072 1,703 473 2.3% (16) FY20 FY22 FY23 FY20 FY22 FY23 FY20 FY22 FY23 FY20 FY22 FY23 • Outstandin
Slide 5: Outlook | Operating Model Underpins Our Confidence in FY24
This document has been marked as Non-Confidential OUTLOOK | OPERATING MODEL UNDERPINS OUR CONFIDENCE IN FY24 EXCELLENT RESULTS STRONG CURRENT TRADING SHAREHOLDER RETURNS Occupancy and ARR growth UK accommodation sales over 15% 1 £546m capex invested in FY23 driving UK RevPAR +27% ahead of FY23 18 es
Slide 6: Financial Review
This document has been marked as Non-Confidential FINANCIAL REVIEW HEMANT PATEL - CFO
Slide 7: Financials | Profit Above Pre-Pandemic Levels
This document has been marked as Non-Confidential FINANCIALS | PROFIT ABOVE PRE-PANDEMIC LEVELS 1 £m FY23 FY22 FY20 vs FY22 vs FY20 Statutory revenue (2,625) (1,703) (2,072) 54% 27% Adjusted revenue (2,625) (1,703) (2,062) 54% 27% Operating costs ((1,742) (1,345) (1,323) (30)% (32)% Adjusted EBITDAR
Slide 8: UK | Accommodation Sales Driven by Occupancy and ARR
This document has been marked as Non-Confidential UK | ACCOMMODATION SALES DRIVEN BY OCCUPANCY AND ARR Premier Inn UK – KPIs vs pre-pandemic (FY20) 42% 38% 37% 37% 33% 31% 27% 27% 27% 21% 21% 20% 18% 17% 9% Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 FY23 +8pp +5pp +4pp +8pp +7pp Accommodation Occupancy ARR Rev
Slide 9: UK | Sustained Market Outperformance
This document has been marked as Non-Confidential UK | SUSTAINED MARKET OUTPERFORMANCE Premier Inn UK performance vs the M&E market 26.9 pp 25.6 pp 25.0 pp 25.2 pp 23.9 pp PI Accommodation sales performance1 vs M&E Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 FY23 PI Occupancy performance1 vs +11.6pp +10.9pp +9.
Slide 10: Germany | Established Hotels Trading in Line with the Market
This document has been marked as Non-Confidential GERMANY | ESTABLISHED HOTELS TRADING IN LINE WITH THE MARKET RevPAR € € 64 € 63 € 56 € 57 € 55 € 47 € 44 € 42 € 42 € 40 € 35 € 35 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 1 2 Germany M&E Premier Inn sites > 12 months Total Premier Inn Germany HOTELS TRADED RE
Slide 11: Financials | UK & Germany Highlights
This document has been marked as Non-Confidential FINANCIALS | UK & GERMANY HIGHLIGHTS Premier Inn UK Premier Inn Germany £m FY23 FY22 FY20 £m FY23 FY22 FY20 Statutory revenue (2,508) 1,668) 2,050) Statutory revenue 118) 35) 12) Other income (excl. rental income) 5) 70) 14) Other income (excl. renta
Slide 12: Financials | Cash Flow Is Funding Continued Investment and Returns
This document has been marked as Non-Confidential FINANCIALS | CASH FLOW IS FUNDING CONTINUED INVESTMENT AND RETURNS £m £184m non-expansionary £362m expansionary (546) Cashflow FY23 Net 1 pre- Operating Capex Disposals Other Dividend cashflow shareholder cashflow FY23 returns Net (debt) / cash movem
Slide 13: Financials | Asset-Backed Balance Sheet
This document has been marked as Non-Confidential FINANCIALS | ASSET-BACKED BALANCE SHEET £m FY23 FY22 KEY MOVEMENTS Non-current assets 8,611 8,234 • Strong trading performance driving increased Property, plant and equipment 4,554 4,227 cash balances Right-of-use assets – property, plant and equipme
Slide 14: Capital Allocation | Confidence in FY24 Reflected by £300m Buy-back
This document has been marked as Non-Confidential CAPITAL ALLOCATION | CONFIDENCE IN FY24 REFLECTED BY £300M BUY-BACK MAINTAIN INVESTMENT Asset-backed balance sheet and investment 1 GRADE METRICS grade status, BBB- rating CONTINUE TO INVEST £400 - £450m of planned capex in FY24 THROUGH THE CYCLE CAP
Slide 15: Outlook | Confident in Driving Growth in FY24
This document has been marked as Non-Confidential OUTLOOK | CONFIDENT IN DRIVING GROWTH IN FY24 DEMAND PRICING EFFICIENCIES Strong current trading Strength of brand Labour management Structural growth opportunity Integrated trading engine Process efficiencies Powerful operating model Success of comm
Slide 16: Guidance | Updated Sensitivity for FY24
This document has been marked as Non-Confidential GUIDANCE | UPDATED SENSITIVITY FOR FY24 UK • Accommodation sales: 1% Δ vs FY23 = £15m - 16m PBT • F&B sales: 1% Δ vs FY23 = £4m PBT • Inflation: 7 - 8% (no change since previous guidance) GERMANY • PBT: loss before tax in FY24 between £20m - £30m plu
Slide 17: Guidance | Unit Cost Guidance in FY24
This document has been marked as Non-Confidential GUIDANCE | UNIT COST GUIDANCE IN FY24 1 UK GERMANY 2 • New rooms: 1,500 – 2,000 (c.90% leasehold) • New rooms: 1,000 – 1,500 (c.70% leasehold) • Average cost per room: • Average cost per room: • Operating costs (EBITDAR): c.£12.5k • Operating costs (
Slide 18: Current Trading | Continued Sales Growth and Positive Outlook
This document has been marked as Non-Confidential 1 CURRENT TRADING | CONTINUED SALES GROWTH AND POSITIVE OUTLOOK • UK accommodation sales over 15% ahead of FY23 UK • Continued RevPAR outperformance - £6.08 2 • Total F&B sales +10% ahead of FY23 • Germany accommodation sales +140% ahead of FY23 GERM
Slide 19: Driving Growth and Returns
This document has been marked as Non-Confidential DRIVING GROWTH AND RETURNS DOMINIC PAUL - CEO
Slide 20: Business Model | Driving Our Performance
This document has been marked as Non-Confidential BUSINESS MODEL | DRIVING OUR PERFORMANCE SCALE AND LEADING MARKET POSITION HIGHLY INVESTED BRAND LOW-COST DIRECT DISTRIBUTION PROPRIETARY TRADING ENGINE DIRECTLY MANAGED HOTEL OPERATIONS F&B PROPOSITION FLEXIBLE, ASSET-BACKED MODEL FORCE FOR GOOD BAR
Slide 21: UK Supply | Structural Growth Opportunity
This document has been marked as Non-Confidential UK SUPPLY | STRUCTURAL GROWTH OPPORTUNITY 1 Total hotel supply ’000 678k 676k 685k 686k 692k 700k 698k 705k 706k 715k 686k 6% 7% 7% 8% 9% 9% 10% 10% 11% 11% 12% 13% 13% 14% 14% 15% 15% 16% 17% 17% 17% 19% 57% 55% 54% 53% 52% 52% 51% 50% 48% 49% 45% 2
Slide 22: UK | Further UK Expansion Opportunity
This document has been marked as Non-Confidential UK | FURTHER UK EXPANSION OPPORTUNITY 125,000 ROOM POTENTIAL ESTATE OPTIMISATION DRIVES CATCHMENT REVENUE Network potential Accommodation Current network 125,000 sales +c.27%1 + pipeline rooms Peterborough North c.91,000 Current network rooms Retaine
Slide 23: UK | Consistently the UK's Favourite Brand
This document has been marked as Non-Confidential UK | CONSISTENTLY THE UK’S FAVOURITE BRAND 2 1 35 Hilton 30 Premier Inn Metric Variance 1st to 2nd Satisfaction 42.7 1st 20.9 25 Marriott Impression 42.9 1st 14.4 Value 42.1 1st 16.7 20 Quality Likelihood-to-recommend 39.6 1st 22.3 Quality 29.5 2nd*
Slide 24: UK | Commercial Levers – Enhanced Business Proposition
This document has been marked as Non-Confidential UK | COMMERCIAL LEVERS – ENHANCED BUSINESS PROPOSITION 1 ROOM REVENUE MIX CUSTOMER ACQUSITION VIA THREE CORE CHANNELS BUSINESS New account sign ups +132% vs FY20 ACCOUNTS BUSINESS c.66% book flexible rate 50% 50% BOOKER Higher TOOL Leisure Business m
Slide 25: UK | Commercial Levers – Integrated Pricing and Marketing
This document has been marked as Non-Confidential UK | COMMERCIAL LEVERS – INTEGRATED PRICING AND MARKETING 1 1 MARKETING DRIVING CUSTOMER VOLUMES PROPRIETARY TRADING MODEL MAXIMISES YIELD CAGR Total customers 5.9 m Increasing % of site nights at 100% occupancy 78,547 rooms 83,576 rooms 4.3 m 4.2 m
Slide 26: UK | Commercial Levers – Enhancing Our Customer Proposition
This document has been marked as Non-Confidential UK | COMMERCIAL LEVERS – ENHANCING OUR CUSTOMER PROPOSITION NEW ROOM FORMATS INNOVATIVE ROOM CONCEPTS • Upgraded standard Premier Plus room (ID5) • >4,000 rooms • 30% ARR premium • 89,000 new beds by end of FY24 HUB • >2,500 rooms • Twin rooms • Broa
Slide 27: Germany | Market Overview
This document has been marked as Non-Confidential GERMANY | MARKET OVERVIEW AN ATTRACTIVE MARKET INDEPENDENT DECLINE 1 SUPPLY BY SEGMENT Number of rooms available per day c.40% larger than the UK and broad customer base 994k rooms (3)pp 966k rooms 9% 12% Higher RevPAR growth than the UK pre-pandemic
Slide 28: Germany | Committed £1bn of Capital, On Track to Drive 10–14% Returns
This document has been marked as Non-Confidential GERMANY | COMMITTED £1BN OF CAPITAL, ON TRACK TO DRIVE 10 – 14% RETURNS BECOMING THE NUMBER ONE BUDGET BRAND QUALITY HOTELS IN PRIME LOCATIONS Absolute room numbers 1 24,000 17,000 17,000 16,000 16,000 9,000 Ibis B&B Motel One Best PI open and PI ope
Slide 29: Germany | Aiming to Replicate Our Successful UK Model
This document has been marked as Non-Confidential GERMANY | AIMING TO REPLICATE OUR SUCCESSFUL UK MODEL 2 Now 51 hotels in Increasing network Enhancing business Winning corporate Germany, 37 in the coverage proposition clients pipeline Increased from c.7% Local breakfast Building brand Tailoring cus
Slide 30: Germany | Established Hotels Underpin Confidence in Our Model
This document has been marked as Non-Confidential GERMANY | ESTABLISHED HOTELS UNDERPIN CONFIDENCE IN OUR MODEL 2 COHORT OF ESTABLISHED HOTELS NOW PROFITABLE PROVING THE BUSINESS CASE 1 PBT moving annual total Hamburg City Zentrum FY22 H1 FY23 FY23 H2 OCCUPANCY 82% €m 5 H2 ARR €98 #21 / 349 hotels i
Slide 31: Investing to Win | Everyday Efficiency Programme
This document has been marked as Non-Confidential INVESTING TO WIN | EVERYDAY EFFICIENCY PROGRAMME FY17 – FY21 FY22 – FY25 DELIVERED £275M OF COST EFFICIENCIES £140M OF SAVINGS LABOUR PROCUREMENT LAUNDRY • Process efficiencies • Reducing rejected linen • Product substitution • Multi-site labour mana
Slide 32: Investing to Win | Supporting Our Teams
This document has been marked as Non-Confidential INVESTING TO WIN | SUPPORTING OUR TEAMS RECRUITMENT REMUNERATION Improves team retention Reduced our c.+10% for time to hire by entry-level 50% employees Reduces HR costs TRAINING DIVERSITY SIGNIFICANT 45% female, Operations OPERATIONAL 10% ethnic co
Slide 33: Investing to Win | Industry Leading Force for Good Programme
This document has been marked as Non-Confidential INVESTING TO WIN | INDUSTRY LEADING FORCE FOR GOOD PROGRAMME OPPORTUNITY COMMUNITY RESPONSIBILITY STRETCHING TARGETS DRIVING POSITIVE CHANGE… 1 1.1m courses Currently 40% Achieved 52.5% First full completed this female and 7% Reduced Scope 3 Scope 1
Slide 34: Operating model driving performance
This document has been marked as Non-Confidential Operating model driving performance Strong trading momentum continuing Significant growth potential Shareholder returns
Slide 35: Appendices
This document has been marked as Non-Confidential APPENDICES I Additional slides p36 VI Definitions p41 VII Supplementary information p42 VIII Cautionary statement p43 Whitbread ADR programme – WTDBY Whitbread has established a sponsored Level I American Depositary Receipt (ADR) programme for which
Slide 36: Appendix I | Doubling Our Estate Whilst Delivering Sustainable Returns
This document has been marked as Non-Confidential APPENDIX I I DOUBLING OUR ESTATE WHILST DELIVERING SUSTAINABLE RETURNS Premier Inn UK ROCE 90 80 13.3% 13.5% 12.9% 13.0% 13.4% 13.3% 12.9% 12.3% 12.4% 12.4% 11.2% 10.9% 70 60 2.3% 50 82k 84k 40 76k 79k 79k 72k 65k 68k 30 59k 52k 55k No. of 47k rooms
Slide 37: Appendix II | Premier Inn UK Performance vs the M&E Market
This document has been marked as Non-Confidential APPENDIX II I DOUBLING OUR ESTATE WHILST DELIVERING SUSTAINABLE RETURNS Premier Inn UK performance vs the M&E market 21.6pp 21.0pp 20.0pp 19.8pp 17.3pp PI Accommodation sales performance1 vs M&E Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 FY23 PI Occupancy perfo
Slide 38: Appendix III | Operational and Financial Flexibility
This document has been marked as Non-Confidential APPENDIX III | OPERATIONAL AND FINANCIAL FLEXIBILITY Freehold Leasehold UK Open 57% 43% Total estate (open and committed) 55% 45% Germany Open 22% 78% Total estate (open and committed) 23% 77% Group Open 54% 46% Total estate (open and committed) 51%
Slide 39: Appendix IV | Broad Customer Reach
This document has been marked as Non-Confidential 1 APPENDIX IV | BROAD CUSTOMER REACH Regions vs London Domestic vs Inbound Leisure vs Business Trades vs Office-based 83% 17% 93% 7% 50% 50% 54% 46% PI Regions PI Domestic PI Leisure PI Business: Trades PI London PI Inbound PI Business PI Business: O
Slide 40: Appendix V | Premier Inn UK: Proven Resilience in Previous Downturns
This document has been marked as Non-Confidential APPENDIX V | PREMIER INN UK: PROVEN RESILIENCE IN PREVIOUS DOWNTURNS M&E SECTOR OUTPERFORMS OPERATING MODEL LED TO OUTPERFORMANCE OF THE M&E MARKET 90% £70 81% 78% 78% 78% • M&E sector tends to outperform the 80% 76% 76% 76% £60 73% wider hotel marke
Slide 41: Appendix VI | Definitions
This document has been marked as Non-Confidential APPENDIX VI | DEFINITIONS Accommodation sales Premier Inn accommodation revenue excluding non-room income such as food and beverage Profit before adjusting items, interest, tax, depreciation of property, plant and equipment and right-of-use assets, a
Slide 42: Appendix VII | Supplementary Information
This document has been marked as Non-Confidential APPENDIX VII | 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. H
Slide 43: Appendix VIII | Cautionary Statement
This document has been marked as Non-Confidential APPENDIX VIII | 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 Financi