Slide 1: Interim Results 2010/11
Interim Results 2010/11 19 October 2010 1
Slide 2: Anthony Habgood Chairman
Anthony Habgood Chairman cat seep a BR
Slide 3: Christopher Rogers Group Finance Director
Christopher Rogers Group Finance Director 3
Slide 4: Summary
Summary H1 2010/11 H1 2010/11 H1 2009/10 Change Underlying profit before tax £151.8m £118.2m 28.4% Profit before tax, £146.0m £110.5m 32.1% pre-exceptional EPS underlying (diluted) 61.27p 47.33p 29.5% Proposed interim dividend 11.25p 9.65p 16.6% 4
Slide 5: Summary – Profit & loss
Summary – Profit & loss H1 2010/11 £m H1 2010/11 H1 2009/10 Change Revenue 1 805.4 703.3 14.5% Profit from operations 173.6 140.0 24.0% Central costs (10.2) (9.2) (10.9)% Interest (11.6) (12.6) 7.9% Underlying profit before tax 151.8 118.2 28.4% 1 includes exceptional revenue of £5.0m in respect of
Slide 6: Summary – Underlying profit & loss
Summary – Underlying profit & loss H1 2010/11 £m H1 2010/11 H1 2009/10 Change Underlying profit before tax 151.8 118.2 28.4% Pension finance cost - IAS 19 (5.8) (7.7) 24.7% Profit before tax, 146.0 110.5 32.1% pre-exceptional Taxation (42.7) (34.1) (25.2)% Net profit, pre-exceptionals 103.3 76.4 35.
Slide 7: Revenue by business segment
Revenue by business segment H1 2010/11 £m H1 2010/11 H1 2009/10 Change Hotels & Restaurants 608.0 548.8 10.8% Costa 198.5 155.4 27.7% Less: inter-segment 1 (1.1) (0.9) (22.2)% Revenue 805.4 703.3 14.5% 1 Sales between segments 7
Slide 8: Hotels & Restaurants revenue
Hotels & Restaurants revenue H1 2010/11 £m H1 2010/11 H1 2009/10 Change Premier Inn revenue 355.7 312.1 14.0% Restaurants revenue 1 247.3 236.7 4.5% Exceptional revenue 2 5.0 - Hotels & Restaurants 608.0 548.8 10.8% 1 Revenue from joint site and stand alone restaurants 2 Revenue arising from refund
Slide 9: Like for like sales
Like for like sales H1 2010/11 12.0% 10.1% 10.0% 8.2% 8.5% 8.0% 6.0% 4.2% 4.0% 2.5% 1.8% 1.7% 2.0% 0.0% -0.8% -2.0% Restaurants Costa -4.0% (2 openings, net 1) (137 new stores, net 116) -6.0% H1 2009/10 -8.0% -7.5% H2 2009/10 Premier Inn H1 2010/11 -10.0% (795 new rooms, net 789) 9
Slide 10: Profit by business segment
Profit by business segment H1 2010/11 £m H1 2010/11 H1 2009/10 Change Hotels & Restaurants - UK 157.1 129.1 21.7% Hotels & Restaurants - (3.1) (1.7) Overseas Total Hotels & Restaurants 154.0 127.4 20.9% Costa - UK 19.3 12.5 54.4% Costa - Overseas 0.3 0.1 Total Costa 19.6 12.6 55.6% Profit from opera
Slide 11: Summary - Profit & loss
Summary - Profit & loss H1 2010/11 £m H1 2010/11 H1 2009/10 Change Revenue 1 805.4 703.3 14.5% Profit from operations 173.6 140.0 24.0% Central costs (10.2) (9.2) (10.9)% Interest (11.6) (12.6) 7.9% Underlying profit before tax 151.8 118.2 28.4% 1 includes exceptional revenue of £5.0m in respect of
Slide 12: Interest charge
Interest charge H1 2010/11 £m H1 2010/11 H1 2009/10 Underlying interest charge (11.6) (12.6) Pension finance cost – IAS 19 (5.8) (7.7) Interest charge, pre-exceptional (17.4) (20.3) Average debt in first half £484.2m (2009/10 £599.7m) 12
Slide 13: Exceptional items
Exceptional items H1 2010/11 £m H1 H1 2010/11 2009/10 Refund of VAT on gaming machine income 5.0 - Reduction in tax rate 9.3 - Tax on exceptional items (1.6) 1.3 Reorganisation costs - (4.3) Other - (0.3) Exceptional items 12.7 (3.3) 13
Slide 14: Cash flow
Cash flow H1 2010/11 200 197.6 Half year debt down £46.2m to £467.2m 180 160 140 120 £m (88.8) 100 80 1.8 60 46.2 40 (59.5) (4.9) 20 0 Cash flow from Cash capital Interest and Tax Other Decrease in net operations expenditure dividends debt 14
Slide 15: Capital expenditure
Capital expenditure HY 2010/11 Split between businesses Expansionary v Maintenance £m £m 17 34 72 55 Hotels and Restaurants Costa Expansionary Maintenance 15
Slide 16: Capital expenditure
Capital expenditure • Total Capex for 2010/11 to be c.£265m • Capex for 2011/12 currently planned at c.£330m as room openings will now be at least 3,500 16
Slide 17: Pension
Pension • IAS 19 pension deficit at half year £500m (£403m net of tax) compares to £434m (£341m net of tax at full year) • Full year pension fund interest charge £11.5m • Second £39m tranche of new pension structure implemented bringing total to £141m with total cash tax benefit of £39m over 2010 -
Slide 18: Other financial items
Other financial items • Effective tax rate for the year of c.29.5% • £102m Private Placement in August 2010 at blended rate of 3.8%, first move towards diversification of funding • 25% of £8m customer-facing initiatives and marketing expenditure spent in the first half, balance to be spent in the se
Slide 19: Summary
Summary • Underlying profit before tax £151.8m + 28.4% • EPS, Underlying diluted 61.27p + 29.5% • Proposed interim dividend 11.25p + 16.6% 19
Slide 20: Alan Parker Chief Executive
Alan Parker Chief Executive 20
Slide 21: Agenda
Agenda 1. What we’ve achieved 2. How we’ve done it 3. Prospects for the future 21
Slide 22: Highlights
Highlights 1. Underlying PBT £151.8m +28.4% 2. Group PBIT margin: 20.4% (2009/10: 18.6%) 3. 12 month TSR: +53.3% (FTSE 100 +15.3%) 4. ROIC: 13.1% (2009/10: 11.2%)* Excellent results that build on the increased profits achieved in 2009/10 * Calculated on an annualised basis 22
Slide 23: Highlights: Hotels & Restaurants
Highlights Hotels & Restaurants • Occupancy up 9.2ppts to 79.3% • 7% more restaurant customers: menu value strategy and increased hotel occupancy • Secured pipeline of c.11,000 rooms + 25% growth in UK + 3,500 to open 2011/12 23
Slide 24: Highlights: Costa
Highlights Costa • Operating profits up 55.6%. Like for like sales up 8.5% • 34 consecutive quarters of like for like growth • 116 new stores: worldwide total 1,716 stores 24
Slide 25: 2010/11 dual-track strategy
2010/11 dual-track strategy 1. Expand market share and achieve brand leadership 2. Improve efficiency and margins 25
Slide 26: Revpar outperformance
Revpar outperformance Premier Inn outperformed budget sector by 5.7ppts and total market by 3.5ppts 15.0% Like for like Revpar year-on-year 10.0% 5.0% 0.0% Premier Inn Branded Hotel Market -5.0% Budget Hotel Sector -10.0% -15.0% Q1 Q1 Q2 Q2 Q3 Q3 Q4 Q4 Q1 Q1 Q2 Q2 2009/10 2009/10 2010/11 2010/11 Sou
Slide 27: UK’s favourite hotel brand in just two years
UK’s favourite hotel brand in just two years Net score % Premier Inn 19.9% Hilton 16.2% Marriott 15.8% Travelodge 12.7% Holiday Inn 10.7% Best Western 6.7% Express by Holiday Inn 5.8% Ibis 2.3% Comfort Inn -1.7% Source – YouGov Brand Index for hotels March - August 2010 27
Slide 28: Restaurants outperforming the market
Restaurants outperforming the market Like for like % growth 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Market Whitbread Source: Coffer Peach Business Tracker 28
Slide 29: Outperforming with strong like for like sales
Outperforming with strong like for like sales % Like for like sales 14.0% 12.0% Costa UK like for like sales 10.0% 8.0% 6.0% 4.0% 2.0% BRC-KPMG like for like retail sales 0.0% -2.0% Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug 2009 2010 -4.0% 29
Slide 30: The UK’s favourite coffee shop
the UK’s favourite coffee shop Net score % Costa 14% Pret a Manger 13% Nero 9% Subway 8% EAT 5% Starbucks 3% 0 2 4 6 8 10 12 14 16 Source – YouGov BrandIndex for coffee and sandwich shops March - August 2010 30
Slide 31: Project 80% occupancy
Project 80% occupancy Launched Spring 2009 Increased & 1 focused Leading choice for leisure travellers advertising Dynamic Like for like occupancy +9.2ppts: 2 pricing Revpar +9.4% Widened Re-launched Premierinn.com plus new 3 on-line international booking channels distribution Business 4 Account sal
Slide 32: Increased & focused advertising
Increased & focused advertising Leading choice for leisure guests 25 Premier Inn 20 Travelodge 15 Upper full service 10 Mid-market full service 5 0 2005 2006 2007 2008 2009 2010 Source: BDRC British Hotel Guest Survey 2010: Wave 4. Sept 2010. Base: All leisure travellers 32
Slide 33: Advertising
Advertising nd Premier inn WHITBREAD CAT SLEEP A DRINK
Slide 34: Dynamic pricing
Dynamic pricing Premier Offers selectively drives leisure volume 30% Average 8.5% of rooms sold 25% New Year’s Eve Easter weekend % rooms sold 20% Whitsun Bank August Bank Holiday Holiday Valentine’s weekend May Bank 15% Holiday October Half Term 10% Launch of Premier Offers 5% 0% 202122232425262728
Slide 35: Widen on-line distribution
Widen on-line distribution On-line now 65% of reservations • Over 20% increase in revenue via Premierinn.com • Twice benchmarked best travel website and won Best Hotel Website • Incremental overseas reservations: Bookings.com, GDS and our new international websites 35
Slide 36: Business Account sales
Business Account sales • Year to date revenues top £100m for the first time - up 24% • More large businesses are using Premier Inn ,quot;"# !quot;"# ,-&"%.&&'(//$-%0'1.2.%-.' !()'*+' ,('"# !('"# ,(&"# !(&"# ,(%"# !(%"# $%?#1@72>;3>#A>;2#B@#A>;2# ,(quot;# !(quot;# ,(""# !(""# !"##"$%&' ,'"# !'"# ,&"# !&"# First
Slide 37: Restaurants
Restaurants Barnsley, joint site opened April 2010 with 110 rooms 37
Slide 38: Successful volume and value strategy
Successful volume and value strategy • 30% take up value offers on the menu • Over 250,000 £20 meal deals sold – up 48% • New theme nights and buffets introduced 38
Slide 39: Maintained high quality estate
Maintained high quality estate • 71 restaurants refurbished in H1 • Contemporary estate: 70% refurbished in last two and a half years • Average cost of refurbishment £125,000 39
Slide 40: 2010/11 commercial action plan
2010/11 commercial action plan Flat 1 5.5% of coffee sales. Premium product White 2 Costa Coffee Over 3 million members since March Club 3 Ice Cold 16% of summer beverage sales. Costa Like for like’s +39% Brand Press and online + 1st Costa TV campaign 4 building 40
Slide 41: Costa Advertising
COSTA Advertising WHITBREAD
Slide 42: Pipeline targets 25% increase in UK rooms
Pipeline targets 25% increase in UK rooms No. rooms &"D"""# EED"""# EED"""# E"D"""# %.D(""# %ED"""# %CD&""# %"D"""# CED"""# C"D"""# 0B2>7;34#quot;("F((# 0B2>7;34#quot;((F($# +;2G>4#quot;(CF(%# Planned UK estate 42
Slide 43: International
International Build understanding • 3 hotels (819 rooms) Middle • 1 hotel under East construction in Abu Dhabi Prove model and maximise • 1 hotel (105 rooms) performance • 1 hotel under India construction in New Delhi 43
Slide 44: Continual growth
Continual growth Stores 3,000 CD"""# $DE""# (D%""# 1@4>2@;<B@;:# $D"""# 1,850 34B2>3# &E"#1@4>2@;<B@;:# (DE""# 34B2>3# (D"""# (D&""#HI#34B2>3# (Dquot;"#HI#34B2>3# E""# "# 0B2>7;34#quot;("F((# +;2G>4#quot;(%F(E# 44
Slide 45: International
International Focus on big 5 markets Delivering Russia on our Current stores: 25 potential H1 2010/11: Central Europe 582 stores, Current stores: 198 China Current stores: 71 to c.1,400 by 2014/15 Middle East India Current stores: 228 Current stores: 60 45
Slide 46: Coffeeheaven
Coffeeheaven More potential identified • Now operate 77 stores in Poland – to grow by 30% to 100 stores over next 2 years • Strong platform to grow Central Europe • Performance in line with plan 46
Slide 47: Burgess Hill: Targeted 70% energy and 60% water savings
Burgess Hill Targeted 70% energy and 60% water savings 47
Slide 48: New schools in coffee growing communities
New schools in coffee growing communities New recyclable cup Reduced milk packaging Rain Forest Alliance 48 48
Slide 49: Strong prospects for the future
Strong prospects for the future • Premier Inn and Restaurants Strong No.1 UK hospitality brand brands • Costa No.2 world wide coffee shop brand Strong • Valuable asset base balance sheet • Flexible funding options Strong • Relentless focus on customers team • Disciplined approach to cost control 49
Slide 50: Appendix
APPENDIX CAT SLEEP 4 DRINK WHITBREAD
Slide 51: Standard Information: definitions
Standard Information General !"#$%&%'()**+(),-%( (.*-%/(,""*++*',0*1($1"*+%('amp;#039;%'(23(-#%( 4!))5 (16+2%7(*8(7**+9(*""6:$%'(23(;6%9-9( <1"*+%(2%8*7%(=>%'("*9-9 (.*-%/(*:%7,01;(:7*=-(2%8*7%('$7%"-/3(,?7$26-,2/%( 4<@AB5 (=>%'("*9-9(496"#(,9(7%1-C(7,-%9C($1967,1"%C(%-"D5C( #%,'(*E"%(,1'("%1-7,/("*9-9(
Slide 52: Standard Information Hotels & Restaurants
Standard Information Hotels & Restaurants HY 2010/11 HY 2009/10 FY 2009/10 Solus 1 Sales £m 201.9 176.2 363.7 IBFC £m 115.7 99.4 205.2 IAFC 2 £m 64.7 54.4 112.0 Net Assets £m 955.6 956.1 995.1 Joint 3 Sales - Joint Sites £m 401.1 372.6 732.3 IBFC £m 180.3 158.4 304.9 IAFC 2 £m 129.7 109.4 205.3 Net
Slide 53: Standard Information Hotels & Restaurants cont.
Standard Information Hotels & Restaurants cont. HY 2010/11 HY 2009/10 FY 2009/10 Number of Rooms Solus - Managed 21,586 20,694 21,127 - Associate 282 282 282 - Franchise & Management Contract 1,082 1,082 1,082 Total Solus 22,950 22,058 22,491 Joint Sites 19,559 19,115 19,229 Total UK 42,509 41,173 4
Slide 54: Standard Information Costa
Standard Information Costa HY 2010/11 HY 2009/10 FY 2009/10 Headline financials Sales £m 198.5 155.4 340.9 EBITDA from Operations £m 29.9 21.5 54.0 EBIT from Operations £m 19.6 12.6 36.2 Net Assets £m 121.4 85.9 98.6 Cash Capital Expenditure £m 17.1 9.1 17.2 Key Operating Measures Like for Like Sale
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