Slide 1: FY19 Interim Results October 2018
FY19 Interim Results October 2018 FY19 INTERIM RESULTS | OCTOBER 2018
Slide 2: Contents
Contents Interim highlights Alison Brittain p3 Financial performance Nicholas Cadbury p5 Strategic update Alison Brittain p13 Costa sale Alison Brittain p24 Appendices p30 2 FY19 INTERIM RESULTS | OCTOBER 2018
Slide 3: Interim highlights | Significant strategic progress
Interim highlights | Significant strategic progress Sale of Costa to The Coca-Cola Company for £3.9 billion agreed 1 & approved by shareholders Strong UK market share growth with current UK network of >74,000 rooms 2 & committed pipeline of >13,000 rooms 30% of total Premier Inn room pipeline now in
Slide 4: Interim highlights | Good financial performance
Interim highlights | Good financial performance UK & Ireland Germany Cumulative >300 rooms ~6,000 1,604 rooms 74,070 efficiency savings £141m rooms added to the pipeline added in H1 FY19 rooms over last 2 years pipeline Strong 82% to Strong return on discretionary cash £283m 13.0% Direct bookings 10
Slide 5: Financial Performance | Nicholas Cadbury – CFO
FINANCIAL PERFORMANCE | Nicholas Cadbury – CFO 5 5 5 FY19 INTERIM RESULTS FY19 INTERIM | OCTOBER RESULTS | OCTOBER2018 2018
Slide 6: Financial highlights | Good overall performance
Financial highlights | Good overall performance H1 FY18 H1 FY19 ! • Revenue growth delivered from new Revenue £1,052m £1,079m 2.6% capacity addition Underlying PBT £263m £270m 2.5% • Disciplined cost management enabled sustained margin performance Underlying EPS 115.4p 118.2p 2.4% continuous operati
Slide 7: Operating performance | Good revenue & profit growth
Operating performance | Good revenue & profit growth H1 FY18 H1 FY19 ! • Revenue growth of 2.6% delivered Revenue £1,052m £1,079m 2.6% through new capacity • Profit from operations up 2.6% driven Profit from operations £295m £303m 2.6% by continued efficiency programme cost savings Return on capital
Slide 8: Margins & ROC | Attractive & sustainable economic model
Margins & ROC | Attractive & sustainable economic model Efficiency programme offsetting inflation Consistently strong ROC on a growing base 1 3.5 0. 5 13 13.2 0. 45 0.1% (0.4)% 0.1% 0. 4 1 2.5 (0.9)% 12.5 0. 35 12 0. 3 1 1. 5 11.7 0. 25 2.8% 11 (1.0)% 0. 2 28.1% 28.1% 1 0. 5 10.7 0. 1 5 13.5% 13.3%
Slide 9: Cash generation | Strong & consistent to fund investments
Cash generation | Strong & consistent to fund investments Profit from operating activities £344m • Good discretionary FCF conversion of 82% Depreciation & £118m amortisation • Business model enables consistent Other non-cash working capital management £10m items • Discretionary FCF used to fund: Wor
Slide 10: Investment | Compelling opportunities to re-invest capital
Investment | Compelling opportunities to re-invest capital • Premier Inn’s maintenance H1 H1 Last 2 Maturity FY18 FY19 years duration capital maintains the estate’s consistent quality Maintenance & product £72m £95m £270m - • Significant investment in improvement new UK capacity New hotels & extensi
Slide 11: Capital discipline | Appropriate leverage ensure investment agility
Capital discipline | Appropriate leverage ensure investment agility Maintaining an appropriate leverage position Diverse & flexible funding options 400 4 .5 4 .3 35 00 2,316 Balanced debt maturity profile 2,058 2,227 4 .1 3 00 1,878 3 .9 USPP £432m 1,670 2 5 00 @2.6-5.2% 3 .7 1,454 1,203 2 00 3.5 ta
Slide 12: FY19 outlook | Investing to access structural growth opportunity
FY19 outlook | Investing to access structural growth opportunity • 4,000-4,500 new rooms including including two hotels in Germany • UK economic & political environment, along with inflation, leading to Operating caution on hotel demand performance • Germany losses of c.£6 million in FY19 & FY20 • E
Slide 13: Strategic Update | Alison Brittain – CEO
STRATEGIC UPDATE | Alison Brittain – CEO 13 13 13 FY19 INTERIM RESULTS FY19 INTERIM | OCTOBER RESULTS | OCTOBER2018 2018
Slide 14: Strong strategic progress
Strong strategic progress Structural growth Market leading brands and Continued disciplined opportunity loyal customers capital management Focus on our Build capability to Grow & innovate in 1 core UK markets 2 strengths to grow 3 support long-term internationally growth • Deliver ongoing efficiency
Slide 15: Unique model | The leading budget branded hotel
1 Growth in the UK 2 International focus 3 Build capabilities Unique model | The leading budget branded hotel • Industry-leading direct • Largest & strongest hotel distribution rate of 97% network in the UK • Ongoing investment to extend l • Significant structural growth competitive advantage i ta N
Slide 16: Network strength | Sustainable network growth at attractive ROC
1 Growth in the UK 2 International focus 3 Build capabilities Network strength | Sustainable network growth at attractive ROC Balanced pipeline of new capacity to >87,000 rooms 8000 Strong occupancy & ROC with significant capacity growth 12 0 7 000 High 10 0 High percentage New Low capacity & 6000 c
Slide 17: Innovation | Broadening customer appeal with new formats
1 Growth in the UK 2 International focus 3 Build capabilities Innovation | Broadening customer appeal with new formats • Broad customer appeal >72,000 • Continued investment supports our price rooms and value for money position Consistently • Optimised room development and high guest refurbishments
Slide 18: Innovation | 'Zip' targeting new customers in a large segment
1 Growth in the UK 2 International focus 3 Build capabilities Innovation | ‘Zip’ targeting new customers in a large segment • Targeting new customers more focused on value • Significant addressable market • Limited trial conducted for last 6 months • Rooms size of 8.5m2 • Prices starting at £19 • Go
Slide 19: Direct distribution | Market leading customer acquisition capabilities
1 Growth in the UK 2 International focus 3 Build capabilities Direct distribution | Market leading customer acquisition capabilities Broad acquisition strategy for business and leisure Digital innovation driving direct distribution model 100 % 97% bookings direct to Premier Inn 85 95% >85% direct 90
Slide 20: Germany | Premier Inn's capabilities enable access to opportunity
1 Growth in the UK 2 International focus 3 Build capabilities Germany | Premier Inn’s capabilities enable access to opportunity Germany is a structurally attractive market Frankfurt hotel performing well • 35% larger than the UK Attractive market • 13% increase in overnight stays, 2012-17 structure
Slide 21: Germany | Replicating UK's success in Germany
1 Growth in the UK 2 International focus 3 Build capabilities Germany | Replicating UK’s success in Germany Building the German pipeline Long-term opportunity to replicate UK success • 13 open Our Strength UK Germany and trading Hotels • >87k rooms open + • >6,000 rooms by 2021 to be • 6 pipeline Co
Slide 22: Capabilities & efficiency | Delivering on extended ambition
1 Growth in the UK 2 International focus 3 Build capabilities Capabilities & efficiency | Delivering on extended ambition Updated efficiency ambition Creating efficiencies throughout the value chain • Cumulative savings of £141 million delivered so far – almost delivered our 5-year plan in 2 years V
Slide 23: A Force for Good
1 Growth in the UK 2 International focus 3 Build capabilities A Force for Good Opportunity Community Responsibility Being a place where everyone Making meaningful contributions Treating people and the planet can reach their potential to the communities we serve with respect • Targeting 5,000 • Reduc
Slide 24: Costa Sale | Alison Brittain – CEO
COSTA SALE | Alison Brittain – CEO 24 24 24 FY19 INTERIM RESULTS FY19 INTERIM | OCTOBER RESULTS | OCTOBER2018 2018
Slide 25: Costa sale | For £3.9 billion & approved by shareholders
Costa sale | For £3.9 billion & approved by shareholders • Highly attractive transaction • A leading international coffee benefitting all stakeholders brand • Almost 4,000 stores in 32 • Recognises strategic value in Costa countries brand & international potential • Over 8,000 self-serve Express mac
Slide 26: Costa sale | Timing & separation activity
Costa sale | Timing & separation activity • Shareholder approval was gained at General Meeting on 10 October 2018 Approvals • Transaction still conditional on EU and Chinese anti-trust approvals in 2019 & costs • Tax, transaction and separation costs will be approximately £100 million • Completion e
Slide 27: Whitbread | Leading hotel model with best-in-class performance
Whitbread | Leading hotel model with best-in-class performance UK Germany Market • UK’s leading hotel chain with a long-term • Replicating the success of Premier Inn in position structural growth opportunity Germany Competitive • Largest UK network by comfortable gap • Significantly fragmented marke
Slide 28: Capital Markets Day | February 2019
Capital Markets Day | February 2019 Enhance capability to Grow and innovate in Focus on our strengths 1 core UK market 2 to grow internationally 3 support long term growth Premier Inn’s unique operating Growth opportunities in UK & Capital structure & capabilities model internationally • Optimising:
Slide 29: Questions | Alison Brittain & Nicholas Cadbury
QUESTIONS | Alison Brittain & Nicholas Cadbury 29 29 29 FY18 INTERIM RESULTS FY19 INTERIM | OCTOBER RESULTS | OCTOBER2018 2018
Slide 30: Appendices
Appendices I. Definitions p31 II. Supplementary information p32 III. Cautionary statement p33 Whitbread ADR programme – WTDBY Whitbread has established a sponsored Level I American Depositary Receipt (ADR) programme for which Deutsche Bank perform the role of depositary bank. The Level I programme t
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 Cash generated from operations after payments for interest, tax and maintenance capital (Discretionary FCF) Underlying earnings before interest
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: A. Estate analysis B. Sales, profit & return on capital
Slide 33: Cautionary statement
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 presentation avai
Slide 34: Contacts
CONTACTS Matt Johnson Investor Relations Director E matt.johnson@whitbread.com Ann Hyams Investor Relations Manager E ann.hyams@whitbread.com M +44 7848 146 761 M +44 7796 709 087 Whitbread plc Whitbread Court, Houghton Hall Business Park, Porz Avenue, Dunstable, LU5 5XE vCard W www.whitbread.co.uk