Slide 1: WHITBREAD 2017/18 interim results
WHITBREAD 2017/18 interim results October 2017
Slide 2: Contents
Contents Highlights Alison Brittain p3 Financial performance Nicholas Cadbury p6 Strategic update Alison Brittain p16 Appendices p30 WHITBREAD 2 2017/18 INTERIM RESULTS | OCTOBER 2017
Slide 3: A clear plan for growth | Strong fundamentals underpin the plan
A clear plan for growth | Strong fundamentals underpin the plan Strong fundamentals + V Significant structural opportunities JV Unique brand strength V Disciplined capital management V Clear strategy for profitable growth V Focus on shareholder value delivery environment Clear plan for growth Broade
Slide 4: Significant strategic progress | Delivering a platform for growth
Significant strategic progress | Delivering a platform for growth Grow and innovate in core UK markets Opened 10,000 rooms over last 2 years, with faster maturity Secured UK hotel pipeline - on track for 85,000 rooms Re-weighted Costa new store pipeline towards growth channels Successful launches of
Slide 5: Highlights | Good performance in line with expectations
Highlights | Good performance in line with expectations 6.7% . Good profit a The Uk’s ihe we hotel in JV growth £328m favourite coffee JV shop Consistently high return on 15.4% Strong total 6 capital Strong total 9% revenue growth © ¢11p Strong revenue growth £0.6b discretionary toone cash conversio
Slide 6: FINANCIAL PERFORMANCE
FINANCIAL PERFORMANCE | Nicholas Cadbury = CFO WHITBREAD 6 FY18 INTERIM RESULTS | OCTOBER 2017
Slide 7: Financial highlights | Good overall performance
Financial highlights | Good overall performance H1 H1 FY17 FY18 A Revenue £1,556m £1,671m 7.4% Underlying op. profit £320m £342m 7.1% Underlying PBT £307m £328m 6.7% Underlying EPS 133.9p 143.7p 7.4% Discretionary FCF £269m £293m 9.3% Capital expenditure £329m £269m £60m Return on capital 15.1% 15.4
Slide 8: Premier Inn | Continued strong financial performance
Premier Inn | Continued strong financial performance H1 H1 FY17 FY18 A Revenue £988m £1,052m 6.4% UK (including restaurants) £985m £1,049m 6.4% International £3m £3m nm. Underlying op. profit £272m £295m 8.9% UK (including restaurants) £275m £297m 8.1% International £(33)m £(2)m nm. Other metrics UK
Slide 9: Costa | Revenue growth & earnings in line with expectations
Costa | Revenue growth & earnings in line with expectations HI M1 * Strong revenue growth underpinned FY17__—s«#FY18 A by ongoing UK & international Revenue £570m £622m 9.1% expansion UK £500m £542m 8.3% * UK like-for-like sales remain positive International £70m £80m ‘15.4% against tough market con
Slide 10: (0.5)% (1.1)% 1.1% 1.8% (1.1)% 1.5% (0.2)% (1.7)% (0.8)% (0.2)% 1.6% (0.7)% 11.3% 28.1%
(0.5)% (1.1)% 1.1% 1.8% (1.1)% 1.5% (0.2)% (1.7)% (0.8)% (0.2)% 1.6% (0.7)% 11.3% 28.1% 27.5% 10.4%
Slide 11: Cash generation | Consistent & strong to fund investments
Cash generation | Consistent & strong to fund investments Underlying Op. * Good discretionary FCF conversion of profit 86%. Non-cash items “126m * Business model enables good working capital Working capital cern * Discretionary FCF used to fund: Mai - Pensions - £48 million jaintenance £(90)m || Cap
Slide 12: Investment | Compelling opportunities to invest capital
Investment | Compelling opportunities to invest capital H1 H1 Last 2 Maturity Mature FY17 FY18 years duration ROC Maintenance & product improvement - Premier Inn Cinc. refurbs) £92m £72m £316m - - - Costa £25m £18m £108m - - Growth - New / extended hotels £148m = £127m £626m 1-3 yrs >13% ht inn Germ
Slide 13: Capital discipline | Asset-backed balance sheet provides flexibility
Capital discipline | Asset-backed balance sheet provides flexibility H1 H1 FY17 FY17 FY18 Net debt £988m £890m £852m Pension £356m £377m £335m Lease debt (@8x) £1,985m £2,058m £2,128m Adjusted net debt £3,329m £3,325m £3,315m Freehold / leasehold 63:37% 64:36% 64:36% Adlusted debt: 3.3x 3.2x 3.0x Ne
Slide 14: Return on capital | Consistently delivering above cost of capital
Return on capital | Consistently delivering above cost of capital * Strong return on capital maintained on a growing capital base ism * Costa return on capital returning to ao oo i normalised levels i ¢ Near term return on capital diluted addd da from both investments not yet fully FY14 FYIS FYI6 FY
Slide 15: FY18 outlook | On track to deliver in line with expectations
FY18 outlook | On track to deliver in line with expectations General considerations Premier Inn * No changes in guidance to overall * New hotel sales to contribute ~5-6% FY'18 expectations ¢ ~4,200 room openings in FY18 * Remain cautious on consumer outlook * Second half weighting of margin * Gross
Slide 16: STRATEGIC UPDATE
STRATEGIC UPDATE | Alison Brittain - CEO a ‘i i oe aM ara va al ha: 1 Te ae a FM ida rte iene WHITBREAD 16 FY18 INTERIM RESULTS | OCTOBER 2017
Slide 17: Source: Company data Source: Derived from Allegra Project Café UK 2017, December 2016
>12% >19% >3,800 >26% >2,600 <43% >7,700 Source: Company data Source: Derived from Allegra Project Café UK 2017, December 2016 • • • •
Slide 18: Growth in the UK | Premier Inn's unique model enables growth
Growth in the UK | Premier Inn’s unique model enables growth * Direct distribution actively * Majority of 85,000 room target increased to 95% secured in pipeline * Continuous improvement with premierinn.com, automated trading engine and business book tools High occupancy - 82% Continued growth - 6.4
Slide 19: Innovation in the UK | Building market leading capabilities
Innovation in the UK | Building market leading capabilities Business Booker * 6,500 accounts adopted in last 12 months * Enabling faster booker, exclusive rates & greater insight / reporting for corporate bookers Automated Trading Engine * Encouraging early results following adoption * Ongoing optim
Slide 20: Growth in the UK | Reshaping the Costa store network for growth
Growth in the UK | Reshaping the Costa store network for growth Traditional channels > Growth channels 7 Differentiated formats 2 ° 447 High Street stores 2 °* 287 Concessions o © -~ 4 ® ° 216 Shopping Mall ® ° 68 Drive Thru stores < stores < o @ °* 97 Transport stores 5 ° 33 Office stores 5 9 9 * 1
Slide 21: Innovation in the UK | Strong pipeline to enhance customer offer
Innovation in the UK | Strong pipeline to enhance customer offer 2 @ 2 S C ao} @ = cs) 2 = ° 1S) Launched Coldbrew range in 230 stores Launched Frostino range in all stores Roastery in full operation, enabling more new products over next 6-24 months Breakfast range Two successfully relaunched DELICI
Slide 22: Costa Express | Extending advantage at pace
Costa Express | Extending advantage at pace All machines now connected through in-house telemetry technology Revenue share model with partners proving successful - Costa supplies machine & ingredients - Partner supplies space, water, power Expanding UK partnership scale - eg. recently agreed partner
Slide 23: Source: Company data and AMPM hotels, 2016
• - - • • • Source: Company data and AMPM hotels, 2016 - - •
Slide 24: International focus | Accelerating expansion in Germany
International focus | Accelerating expansion in Germany ® Hotel opened Kiel@ @ Secured site @Libeck @ Target city Multiple sites Hamburg ©) baatjses Bremen @Hanover Bein @Miunster Es “@ @Dortmund ncrarS @2 Diisseldorf eipzig®@ Dresden @Cologne @Bonn Frankfurt Wiesbaden@ Wurzbure nei se Nuremberg Man
Slide 25: Source: Euromonitor, Forbes, Company websites, 2016
• • • Source: Euromonitor, Forbes, Company websites, 2016 - • - - • - •
Slide 26: International focus | Building momentum for China expansion
International focus | Building momentum for China expansion * ‘Hot house’ format trial of Cash is obsolete and card < oO performing well with good 3 payment in decline — E 5 sales uplift = ; : es 5 * Mobile payment & loyalty o Riga ° ~Coffee range enhanced with 9 integrated into WeChat & a 8 Coldbre
Slide 27: Building capability | Developing a stronger base to support growth
Building capability | Developing a stronger base to support growth Developing winning teams Enhancing property expertise Whitbread’s scale & breadth provides superior * Asset-backed Premier Inn model enables superior attraction & retention of talented people operating performance ° Executive Team no
Slide 28: Building capability | A force for good
Building capability | A force for good ‘Customer Opportunity Targeting 5,000 apprenticeships by 2020 Enhanced remuneration structure through pay for progression Consistently recognised as a great place to work Community who 7 72 son moe wld Townes cou % BIN Fab aga Tv 00s on @ “a " — é vr £12M Vie >
Slide 29: Summary | Our clear plan is driving sustainable, long term growth
Summary | Our clear plan is driving sustainable, long term growth Structural growth Market leading brands and Continued disciplined opportunity loyal customers capital management Grow and innovate in Focus on our strengths to Build capability to core UK markets grow internationally support long term
Slide 30: Appendices
Appendices I. Definitions p31 il. Supplementary information p32 Wl. Cautionary statement p33 Whitbread ADR programme Whitbread has established a sponsored Level | American Depositary Receipt (ADR) programme for which Deutsche Bank perform the role of depositary bank. The Level | programme trades on
Slide 31: Appendix I. | Definitions
Appendix I. | Definitions Average Room Rate (ARR) Hotel accommodation revenue divided by the number of rooms occupied by guests. Discretionary free cash flow (Discretionary FCF) Cash generated from operations after payments for interest, tax and maintenance capital. EBITDA Underlying earnings before
Slide 32: Appendix II. | Supplementary information
Appendix II. | Supplementary information Further information is available in a supporting supplementary information pack (both Adobe PDF and Microsoft Excel formats) from www.whitbread.co.uk/investors/results-centre. This information includes: Estate analysis Sales, profit & return on capital Group
Slide 33: Appendix III. | Cautionary statement
Appendix Ill. | 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 p
Slide 34: vCard
ay . Matt Johnson Matt Holman Ann Hyams Investor Relations Director Investor Relations Manager Investor Relations Manager E matt.johnson@whitbread.com E matt.holman@whitbread.com E ann.hyams@whitbread.com M+44 7848 146 761 M+44 7712 243 322 M +44 7796 709 087 Whitbread ple Whitbread Court, Houghton