Whitbread Plc · LSE:WTB
Whitbread — H1 2007/08 Earnings Presentation
49 slides from Whitbread's earnings presentation, Oct 16, 2007
Slide 1: Whitbread PLC Interim results 2007/08
Whitbread PLC Interim results 2007/08
Slide 2: Anthony Habgood, Chairman
Whitbread Welcome with a smile Anthony Habgood
Slide 3: Christopher Rogers, Finance Director
Christopher Rogers Finance Director
Slide 4: Summary
Summary H1 2007/08 H1 2007/08 H1 2006/07 % change PBT from continuing £99.4m £87.7m 13.3% operations, pre exceptionals EPS pre exceptionals 44.25p 30.72p 44.0% Proposed interim dividend 9.10p 8.10p 12.3%
Slide 5: Summary – profit & loss
Summary – profit & loss H1 2007/08 £m H1 2007/08 H1 2006/07 % change Revenue 605.8 623.6 (2.9)% Profit from operations 130.0 120.0 8.3% Central costs (12.9) (11.4) (13.2)% Interest (17.7) (20.9) 15.3% PBT from continuing 99.4 87.7 13.3% operations, pre exceptionals
Slide 6: Summary – profit & loss continued
Summary – profit & loss continued H1 2007/08 £m H1 2007/08 H1 2006/07 PBT from continuing 99.4 87.7 operations, pre exceptionals Taxation (31.8) (29.9) Net profit from continuing 67.6 57.8 operations Discontinued operations 19.0 16.6 Total profit pre exceptionals 86.6 74.4 Exceptionals 412.8 61.6 Pr
Slide 7: Treatment of businesses within segmental analysis
Treatment of businesses within segmental analysis • Premier Inn/Restaurants • Re-classification of adjacency fee and breakfast income from Premier Inn to Restaurants (detail in appendix) • David Lloyd Leisure • Profit disclosed within discontinued operations for both H1 2007/08 and H1 2006/07 • T.G.
Slide 8: Revenue by business segment
Revenue by business segment £m H1 2007/08 H1 2006/07 % change Premier Inn 264.1 230.8* 14.4% Restaurants: retained estate 229.5 222.5* 3.1% Costa 98.1 81.0 21.1% Less: inter-segment revenue (1.5) (1.5) Sales from Continuing Whitbread 590.2 532.8 10.8% Pub Restaurants: disposal estate - 82.5 Other 15
Slide 9: Like-for-like sales
Like-for-like sales % H1 2007/08 H1 2006/07 Premier Inn 10.9 7.0 Restaurants 1.5 (0.8) Costa 6.8 6.0 Total 6.3 3.3
Slide 10: Profit by business segment
Profit by business segment £m H1 2007/08 H1 2006/07 % change Premier Inn - UK 95.6 78.6* 21.6% Premier Inn – overseas (0.9) - Total Premier Inn 94.7 78.6 20.5% Restaurants 28.7 35.7* (19.6)% Costa - UK 7.6 6.0 26.7% Costa – overseas (1.0) (0.3) (233.3)% Total Costa 6.6 5.7 15.8% Profits from operati
Slide 11: Summary – profit & loss continued
Summary – profit & loss continued H1 2007/08 £m H1 2007/08 H1 2006/07 % change Revenue 605.8 623.6 (2.9)% Profit from operations 130.0 120.0 8.3% Central costs (12.9) (11.4) (13.2)% Interest (17.7) (20.9) 15.3% PBT from continuing 99.4 87.7 13.3% operations, pre exceptionals
Slide 12: Continuing Interest charge
Continuing Interest charge £m H1 2007/08 H1 2006/07 Interest on borrowings (24.4) (21.0) Interest on deposits 2.7 0.6 Pension credit/(charge) 2.7 (1.0) Other 1.3 0.5 Net interest charge (17.7) (20.9)
Slide 13: Summary – profit & loss continued
Summary – profit & loss continued H1 2007/8 £m H1 2007/08 H1 2006/07 PBT from continuing 99.4 87.7 operations, pre exceptionals Taxation (31.8) (29.9) Net profit from continuing 67.6 57.8 operations Discontinued operations 19.0 16.6 Exceptionals 412.8 61.6 Profit for the year 499.4 136.0
Slide 14: Exceptional items
Exceptional items £m H1 2007/08 Business disposals: David Lloyd Leisure 384.1 T.G.I.Friday’s 12.6 Other exceptional items: Exceptional pension credit 10.0 Interest on debenture redemption (12.5) Other (1.2) Corporation Tax on exceptionals (1.2) Deferred Tax on exceptionals 21.0 Total net exceptional
Slide 15: Cash flow
Cash flow Group year-on-year by items £m H1 2007/08 H1 2006/07 EBITDA 182 168 Working capital movements (15) 68 Cashflow from operations 167 236 Cash capital expenditure (134) (125) Disposal of fixed assets (2) 455 Interest, tax and dividends paid (82) (72) Interest and dividends received 4 1 Busine
Slide 16: Cash flow – continued
Cash flow – continued Group year-on-year by items £m H1 2007/08 H1 2006/07 Business cashflows (47) 495 Additional pension payments (50) (50) Disposal/(acquisition) of businesses 982 249 Special dividend, share buybacks (22) (392) Other 6 7 869 309 Non-cash share buyback accrual (270) - Decrease in n
Slide 17: Capital expenditure
Capital expenditure £m H1 2007/08 H1 2006/07 Premier Inn 57 63 Restaurants 40 27 Costa 16 11 Corporate/Discontinued 21 24 Total 134 125 CAPEX for the full year to be c.£300m
Slide 18: Balance sheet review update
Balance sheet review update • Commitment to increasing leverage remains • Process begun with on-market buyback programme which has reached £174m as of 15 October • Timing and appropriateness of asset-backed bond issues remains unclear • £300m debentures repaid in September – facilities now stand at
Slide 19: Other financial items
Other financial items • Pension deficit decreases from £196m at the 2006/07 year end to £25m • £50m cash injection in August • Change in discount rates • Effective tax rate on profit from continuing operations of 32.0% • Premier Inn rebranding commenced; exceptional revenue cost of £13m, of which £1
Slide 20: Financial summary
Financial summary • Sales from Continuing Whitbread up 10.8% • Like-for-like sales up by 6.3% • PBT from continuing operations, pre exceptionals up 13.3% to £99.4m • EPS pre exceptionals up 44% • Interim dividend up 12.3% to 9.10p • Re-leveraging of the Group begun
Slide 21: Alan Parker, Chief Executive
Whitbread Welcome with a smile Alan Parker
Slide 22: Highlights in the first half 2007/08
Highlights in the first half 2007/08 • Continuing positive trends across all businesses • Premier Inn – market out performance Sales up 14.4% • Restaurants – 4th quarter of like-for-like growth Profit per house up 23% • Costa – outgrowing peers, net 118 new stores opened Total now 825 • Succes
Slide 23: Premier Inn
Premier Inn Interim results 2007/08 £m 2007/08 2006/07 % change Revenue 264.1 230.8 14.4% Profit 94.7 78.6 20.5% Like-for-like sales 10.9% • Like-for-like occupancy up 1.3% points to 82.1% • RevPar up 7.6% across the business to £41.34 • Operating margins improved by 1.8% points to 35.9% • The Tulip
Slide 24: Premier Inn – the hotel market
Premier Inn The hotel market 1st March to 31st August 2007 Average occupancy levels % Source: Hotstats by TRI Hospitality Consulting using a sampling approach
Slide 25: Premier Inn – growth breakdown
Premier Inn Growth breakdown % FY FY HY 2005/06 2006/07 2007/08 Occupancy 0.0 1.1 1.5 Average rate 5.2 4.5 5.6 Food & beverage 0.8 0.7 0.9 Extensions 1.1 1.9 2.9 Total like-for-like 7.1 8.2 10.9 Expansion 19.6 8.5 3.5 Total sales growth 26.7 16.7 14.4
Slide 26: Premier Inn – re-brand
Premier Inn Re-brand ) Al * Premier an
Slide 27: British domestic hotel market – demand forecast
Premier Inn British domestic hotel market – demand forecast • Stronger growth is set to continue for the next five years Room nights E E Source: bdrc
Slide 28: Premier Inn as a proportion of total hotel supply
Premier Inn Premier Inn as a proportion of total hotel supply • Premier Inn is the UK’s biggest hotel company but only has 5% of the total number of UK hotel rooms (710,000) • Branded budget hotel rooms account for only 13% of the market Source: TRI Hospitality Consulting
Slide 29: Budget hotel market comparison
Premier Inn Budget hotel market comparison UK France US Total hotel market (rooms) 710,062 662,000 4.4 million Branded budget sector 91,865 155,000 1.1 million (rooms) Branded budget sector by 13% 23% 25% number of rooms (%) Source: TRI Hospitality Consulting, 2007
Slide 30: International expansion – filling the gap for value hotels
Premier Inn International expansion – filling the gap for value hotels in selected markets • Gulf JV¹, target of 30 hotels and some 5,000 rooms • Dubai opening on track for Spring 2008 • Indian JV², plan is to open 80 hotels and some 12,000 rooms • Evaluating opportunities in other countries Picture
Slide 31: Restaurants
Restaurants Interim results 2007/08 £m 2007/08 2006/07 % change Revenue¹ 229.5 305.0 (24.8%) Profit¹ 28.7 35.7 (19.6%) Like-for-like sales 1.5% • 4 consecutive quarters of positive like-for-like sales growth • Continuing revenue up 3.1% • Profit per house up by an average of 23% • Good progress made
Slide 32: Restaurants – managing for efficiency
Restaurants Managing for efficiency % Food sales discount: indexed vs 2005/06 %
Slide 33: Beefeater – continued improvement
Beefeater Continued improvement • Beefeater remodelling complete • Market leading awareness • H1 underlying profit per house up 47% • Like-for-like covers up 10.2% • Continued menu development • H2 11 Beefeaters converted from Brewers Fayre and first new restaurant to open in six years
Slide 34: Restaurants – the co-located model
Restaurants The co-located model • 5 successful new openings • Breakfast offering improved – total covers up 10%, like-for-like H1 on H1 • Almost half new rooms on Whitbread’s land bank
Slide 35: Costa
Costa Interim results 2007/08 £m 2007/08 2006/07 % change Revenue 98.1 81.0 21.1% Profit 6.6 5.7 15.8% Like-for-like sales 6.8% • Fastest growing and now largest coffee shop chain in the UK • Profit up 15.8% led by UK profit up 26.7% • UK margins improved by 0.5% points to 8.1% • International inves
Slide 36: Costa – improved food offering
Costa Improved food offering • Food offering improved, capture rate continues to improve • All our food is GM and hydrogenated fat free
Slide 37: Costa
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Slide 38: Costa – scope to improve productivity
Costa Scope to improve productivity Employee hours Sales £ Hours 07:00 08:00 09:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 Sales per hour 2007-08 Target schedules 2006-07 Average schedule • A more studied approach to labour scheduling Source: bdrc
Slide 39: Costa – key areas targeted for growth
Costa Key areas targeted for growth • Significant scope for further UK growth supported by demographic analysis • Where Costa not yet represented • Where Costa is under-represented • Significant opportunities in new evolving markets • Retail parks • Travel gateways • Supermarkets • Target of 1,000 s
Slide 40: Costa – Tesco agreement
Costa Tesco agreement
Slide 41: Costa – points of differentiation
Costa Points of differentiation
Slide 42: Whitbread - well positioned for sustainable growth
Whitbread - well positioned for sustainable growth • Portfolio: Now a focused hospitality company with leading brands operating in large scale value markets • Premier Inn • UK market leader, consistent like for like growth , outperforming peers • Significant further UK growth potential • Excellent l
Slide 43: Whitbread PLC Interim results 2007/08
Whitbread PLC Interim results 2007/08
Slide 44: Appendix
Welcome with a smile Appendix
Slide 45: Standard Information – Premier Inn
Standard Information Premier Inn HY 2007/08 HY 2006/07 HY HY FY Headline Financials Hotel Details 2007/08 2006/07 2006/07 Sales £m 264.1 230.8 Number of Rooms - Managed 16,046 15,570 16,306 PBITDA £m 113.9 95.1 - Whitbread Pub Restaurants 16,024 14,508 14,937 - Joint Venture 281 281 281 PBIT £m 94.7
Slide 46: Standard Information – Restaurants
Standard Information Restaurants HY 2007/08 HY 2006/07* HY HY FY Headline financials Outlet details 2007/08 2006/07 2006/07 - Beefeater 134 133 134 Sales £m 229.5 305.0 - Brewers Fayre 268 262 265 Pub Restaurants 402 395 399 PBITDA £m 41.3 50.0 Numbers with adjacent Premier Travel Inns PBIT £m 28.7
Slide 47: Standard Information – Premier Inn and Restaurants
Standard Information Premier Inn and Restaurants Impact of Breakfast and Adjacency Fee in H1 2006/07 Premier Inn Restaurants £m Sales as reported 239.2 296.6 Breakfast sales (8.4) 8.4 Restated sales 230.8 305.0 Operating profit as reported 84.3 30.0 Breakfast profit (2.8) 2.8 Adjancency fee (2.9) 2.
Slide 48: Standard Information – Costa Coffee
Standard Information Costa Coffee HY 2007/08 HY 2006/07 HY HY FY Headline financials Outlet details 2007/08 2006/07 2006/07 UK Equity 459 382 416 Sales £m 98.1 81.0 UK Franchise 144 96 116 International 222 147 175 PBITDA £m 12.7 10.7 Costa Coffee 825 625 707 PBIT £m 6.6 5.7 Net Assets £m 70.6 57.3
Slide 49: General – definitions
General Like-for-like sales Period over period change in total sales, less sales generated by businesses acquired or disposed of and retail outlets opened or closed during 2006/07 and 2007/08 Return on Capital Profit before interest, tax and exceptional items (less tax, interest and exceptional item