Whitbread PLC · LSE:WTB
Whitbread — Debt Investor Presentation (February 2021)
39 slides from Whitbread's debt investor presentation, February 2021
Slide 1: Whitbread Bond Investor Presentation
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Slide 2: Disclaimer
Disclaimer THIS PRESENTATION IS NOT AN OFFER OR SOLICITATION OF AN OFFER TO BUY OR SELL SECURITIES. IT IS SOLELY FOR USE AT AN INVESTOR PRESENTATION AND IS PROVIDED AS INFORMATION ONLY. THIS PRESENTATION DOES NOT CONTAIN ALL OF THE INFORMATION THAT IS MATERIAL TO AN INVESTOR. BY ATTENDING THE PRESEN
Slide 3: Presenting Team
Presenting Team Nicholas Cadbury | | Chief Financial Officer . i Chris Vaughan r ‘ 7 General Counsel and Sustainability Lead lain Strachan Director - Financial Reporting, Control & Treasury WHITBREAD 3 BOND INVESTOR PRESENTATION | FEBRUARY 2021
Slide 4: Contents
Contents Overview p5 Operating model, market & strategy ps COVID-19 response & business performance p19 Sustainability strategy & Green bond framework p25 Liquidity, balance sheet, rating & proposed transaction p31 Credit highlights p35 Appendix p38 WHITBREAD 4 BOND INVESTOR PRESENTATION | FEBRUARY
Slide 5: Overview
Overview = is = tis eengines WHITBREAD s BOND INVESTOR PRESENTATION | FEBRUARY 2021
Slide 6: Introduction to Whitbread
Introduction to Whitbread FTSE 100 with a successful 279 year history Largest hotel operator in the UK: 11% market share with 820 hotels and over 78k rooms Germany: 29 hotels and total committed pipeline of 68 hotels. 10 hotels in the Middle East Hotels primarily operate as ‘Premier Inn’ 712 restaur
Slide 7: Our business profile
Our business profile Broad customer reach in structurally attractive budget market - domestic focus with a 50/50 business/leisure split Strongest hotel brand in the UK with 97% direct bookings | Vertically integrated business model - driving consistency, quality and efficiency Strong track record of
Slide 8: Operating model, market & strategy
Operating model, market & strategy BREAD 8 BOND INVESTOR PRESENTATION | FEBRUARY 2021 { a WHIT
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3000 600 2500 500 2000 400 1500 300 1000 200 500 100 0 0 • •
Slide 10: Premier Inn's vertically integrated model
Premier Inn’s vertically integrated model
Slide 11: Premier Inn's operating model is a competitive advantage
Premier Inn’s operating model is a competitive advantage Flexible model enables a rapid response to returning demand and is a long-term sustainable competitive advantage Direct digital > boy Q © a = 5 i= 2 a7) distribution 2 2 x o = UK’s strongest hotel brand Market-leading consumer metrics First ch
Slide 12: Brand index versus competitors
BrandIndex1 Variance 1st Metric to 2nd *First place is held by a four-star competitor BrandIndex2 2020 2019 2018 Premier Inn Travelodge Holiday Inn Express Ibis
Slide 13: Broad and diversified customer mix is resilient
Broad and diversified customer mix is resilient 83% Regions vs 17% London 90% Domestic vs 10% Inbound 50% Business vs 50% Leisure 37% 44% P| London PI Inbound P| Business MEP! Regions MEP! Domestic @mPl Leisure Market London Market Inbound Market Business mm Market Regions mm Market Domestic Ml Mark
Slide 14: Budget sector is higher growth and more resilient in downturns
Budget sector is higher growth and more resilient in downturns Historic : Branded budget sector has grown faster than the rest of the market in every year since 2009 14% UK total booked room % annual growth! 12% 10% 8% 6% mBranded Budget Es J 2% m Other branded and ox i _f fi ml | fi, | i | independ
Slide 15: We are rapidly building a national network in Germany
We are rapidly building a national network in Germany A structurally attractive market... High levels of domestic busine and leisure travel Attractive market and demographics Ambition to be the no.1 budget hotel operator Clear indications of competitor constraints Our strategy in Germany Focus on ma
Slide 16: Structural opportunities enhanced by the impact of COVID-19
Structural opportunities enhanced by the impact of COVID-19 UK and German markets are characterised by long-term migration from independents to budget branded hotels UK market (Rooms open) Source: Company data and estimates German market (Rooms open) Source: Company data and estimates 678k rooms 713
Slide 17: Clear runway for room growth
Clear runway for room growth In the long-term there remains a clear runway of growth in rooms across the UK and Germany Current UK network, Committed pipeline Additional potential UK market Total UK potential Current German network Committed pipeline Additional potential German market Total potentia
Slide 18: Our model and strategy is highly relevant post COVID-19
Our model and strategy is highly relevant post COVID-19 JV Ownership and operating model is a competitive advantage A 1 UK $ Market share gains Vv Number one brand and winning customer proposition wae on eer The right model to grow and V Growth through existing pipeline and optimisation innovate in
Slide 19: COVID-19 response & business performance
COVID-19 response & business performance ~ 7 oi A F WHITBREAD 19 BOND INVESTOR PRESENTATION | FEBRUARY 2021
Slide 20: Our response to COVID-19
Our response to COVID-19 Business model allows rapid and flexible closures and openings Occupancy %* 100% 100% 96% 97% 98% ——Estate open %* 78% 78% Lockdown Nationwide cul Second ‘ecko restrictions restrictions SHCUE TEAK Igcxdown starts eased in Scotland starts Restrictions New tier New level 5 Thi
Slide 21: Strong performance since reopening
Strong performance since reopening Strong brand and direct distribution is driving material outperformance in the UK Outperformance vs. the M&E hotel market 10.6pp Tl.1pp 8.2pp 8.5pp 4.3pp September October November December 1: STR data, full inventory basis, dates 31July to 31 December 2020, M&E ex
Slide 22: Protecting liquidity and strengthening our financial position
Protecting liquidity and strengthening our financial position Reducing costs and preserving cash Strong track record of material cost savings * Discretionary P&L spend paused and capex reduced Delivered over £200m of Opex and Capex savings * Executive pay reductions, salaried staff pay freeze and FY
Slide 23: Retaining financial resilience despite COVID-19 impact
Retaining financial resilience despite COVID-19 impact H1 FY21 revenues and profit reflect lockdown closures £'m H1FY21 HI FY20 FY20 Statutory revenue 250.8 1,084.0 2,071.5 Adjusted EBITDAR (153.7) 426.7 752.7 Adjusted (loss) / profit before tax (367.4) 235.6 358.3 Statutory (loss) / profit 724.79 2
Slide 24: We continue to invest in the business in a measured way
We continue to invest in the business in a measured way Disciplined capital expenditure FY22 and beyond 700 £588m 600 500 £462m 400 £290m 300 200 100 fe) FY19 FY20 + Rigorous investment return targets FY21 Return to normal levels FY22+ Committed growth capex of £600m + UK: organic investment; 13k pi
Slide 25: Sustainability strategy & Green Bond Framework
Sustainability strategy & Green Bond Framework BREAD 25 BOND INVESTOR PRESENTATION | FEBRUARY 2021 { a WHIT
Slide 26: A Force for Good means operating responsibly and sustainably
A Force for Good means operating responsibly and sustainably Enabled though established governance systems Force for | Robust materiality assessment undertaken annually through internal 1 and external stakeholder engagement and analysis y ' ENABLING PEOPLE TO 1 UVEAND WORK WELL 1 ’ A shared responsi
Slide 27: • • • • • • • • • • • • • •
• • • • • • • • • • • • • • • • ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
Slide 28: Remaining a Force for Good during the pandemic
Remaining a Force for Good during the pandemic For our communities... * 39 hotels open and available for NHS staff and key workers throughout first UK lockdown * Diverted distribution capacity to supermarkets to help retailers feed the nation * Partnered with Deliveroo to serve food to NHS and key w
Slide 29: Whitbread's Green Bond Framework
Whitbread’s Green Bond Framework Whitbread’s Green Bond Framework is aligned to ICMA’s Green Bond Principles 20 ICMA category Eligibility criteria Promoting SDG BREEAM standards (Very Good and above), LEED (Platinum) or EPC (B or above) and water saving projects Green construction Green buildings El
Slide 30: Green construction - green buildings; Green operation - renewable energy
Green construction - green buildings Green operation - renewable energy Investment and expenditures relating to properties built, Investment and expenditures relating to purchase of renewable fitted out to, or operated to BREEAM standards (Very Good energy across estate in the UK and Germany, includ
Slide 31: Liquidity, balance sheet, rating & proposed transaction
Liquidity, balance sheet, rating & proposed transaction BREAD 31 BOND INVESTOR PRESENTATION | FEBRUARY 2021 { a WHIT
Slide 32: Robust liquidity and a strong balance sheet
Robust liquidity and a strong balance sheet Balanced maturity profile. Proposed bond issue Property backed balance sheet affords flexibility to repay USPP maturities Freehold : Leasehold split £m Debt Maturity Profile! Open estate Total estate (open and committed) 800 -" " " 700 4 UK only 61% : 39%
Slide 33: Focus on return to investment grade metrics
Focus on return to investment grade metrics Evolution of lease adjusted net debt : FFO Covenant waivers and amendments provide flexibility in the medium-term 4.0x Investment grade metric: 3.5x * Covenant waivers on RCF, US private placement notes and pension scheme until March 2022 * Existing covena
Slide 34: Transaction summary and rationale
Transaction summary and rationale Proposed transaction summary Guarantor Form of Issue Rating Currency and Size Tenor Terms Use of Proceeds Premier Inn Hotels Limited, Whitbread PLC Senior Unsecured, Reg S Notes BBB- (stable) Fitch Benchmark Benchmark May 2027 May 2031 As Per Preliminary Prospectus
Slide 35: Credit highlights
Credit highlights ae is = Ai eengines WHITBREAD - 35 BOND INVESTOR PRESENTATION | FEBRUARY 2021
Slide 36: Credit highlights
Credit highlights Largest hotel operator in the UK with the strongest brand Vertically integrated model affords control over best-in-class operations and is a competitive advantage over peers Effective direct digital distribution platforms affording cost efficiency and ownership of the customer rela
Slide 37: Whitbread
WHITBREAD
Slide 38: Appendix
Appendix = is = tis eengines WHITBREAD 38 BOND INVESTOR PRESENTATION | FEBRUARY 2021
Slide 39: Summary Financials
Summary Financials £’m H1FY21 HIFY20 FY20 FY19* Statutory revenue** 250.8 1,084.0 2,071.5 2,049.1 Adjusted revenue 250.5 1,078.0 2,062.1 2,047.1 oan joome (excl. rental 86.0 66 13.9 17 Operating costs (490.2) (657.9) (1,323.3) (1,254.4) Adjusted EBITDAR (153.7) 426.7 752.7 794.4 Aglusted (loss) / pr
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