Slide 1: Annual Results 2013/14
"WHITBREAD
Slide 2: Disclaimer
Disclaimer This presentation (the “Presertatior?”) & provided on a strictly private and corfidential basé for information purposes ark By attending or reading this Presentation, you will be deemed to awe agreed to the cbligations and restrictions set out bel ow: Without the express prior written cor
Slide 3: Anthony Habgood, Chairman
Anthony Habgood Chairman WHITBREAD
Slide 4: Andy Harrison, Chief Executive
Andy Harrison Chief Executive WHITBREAD
Slide 5: Strong double digit growth
aA Strong double digit growth Revenue and s@ Underlying PBT Capital A @ management and cash flow EPS, DPS and as Return on capital 7 \(+19.9% WHITBREAD «©
Slide 6: Strong double digit growth
Strong double digit growth WHITBREAD * Strong finish to 2013/14 Favourable weather comparatives Successful Christmas and New Year trading campaigns Strong Restaurant sales and less discounting Good average room rate growth * Record guest scores and employee engagement (once again) * On track for 201
Slide 7: Nicholas Cadbury, Group Finance Director
Nicholas Cadbury Group Finance Director WHITBREAD
Slide 8: Summary - good progress
8 Summary - good progress WHITBREAD £m Underlying profit before tax EPS underlying (basic) Proposed final dividend Interim dividend Total dividend for year * Restated for the impact of IAS 19 (revised 2011) 2013/14 £411.8m 179.02p 47.00p 21.80p 68.80p 2012/13* £353.4m 149.10p 37.90p 19.50p 57.40p WH
Slide 9: Underlying profit up 16.5%
Underlying profit up 16.5% WHITBREAD £m 2013/14 2012/13* Change Revenue 2,294.3 2,030.0 13.0% Profit from operations 457.9 403.2 13.6% Central costs’ (27.2) (26.2) (3.8)% Underlying operating profit 430.7 B77.0 14.2% Interest (18.9) (23.6) 19.9% Underlying profit before tax 411.8 353.4 16.5% * Inter
Slide 10: Good performance in both Hotels & Restaurants and Costa
Good performance in both Hotels & Restaurants and Costa WHITBREAD Profit (£m) Hotels & Restaurants - UK & Ireland Hotels & Restaurants - International Total Hotels & Restaurants Costa - UK Costa - International Total Costa Profit from operations 2013/14 354.1 (6.0) 348.1 110.9 (1.1) 109.8 457.9 2012
Slide 11: Continued strong revenue growth
a Continued strong revenue growth WHITBREAD Hotels & Restaurants (£m) Costa (£m) 9.8% +13.4% +24.3% +19.6% +3.9% 2012/13 2013/14 2012/13 2013/14
Slide 12: Group like for like sales growth +4.2%
) Group like for like sales growth +4.2% WHITBREAD Premier Inn Restaurants Costa Revpar growth of 4.3% with Spend per head up 2.5% and Like for like growth led by occupancy up 1.6% pts at 78.5% number of covers down 0.1% transaction growth of 5.0% Q1 negative weather impact Q1 weather benefit Premie
Slide 13: Strong finish to the year - Q4 like for like sales +7.2%
Strong finish to the year - Q4 like for like sales +7.2% WHITBREAD Successful Christmas and New Year campaigns in all brands Positive contribution from favourable weather comparatives in January and February Particularly strong profit flow through from higher than expected sales due to: — Strong ave
Slide 14: Stronger profit performance in second half
Stronger profit performance in second half WHITBREAD im Hotels & Restaurants - UK & Ireland Hotels & Restaurants - International Total Hotels & Restaurants Costa - UK Costa - International Total Costa Profit from operations H1 2013/14 199-1 (3.4) 195.7 44.0 (0.5) YOY % 7.9% (3.0)% 27.2% 43.5 2s) 10.
Slide 15: Rent commitments and depreciation
oo commitments and depreciation WHITBREAD 75% of committed UK hotel room Hotels & Restaurants 89.0 70.0 27.1% pipeline is leasehold Costa 92:5 80.2 15.3% Hotel & Restaurants rent to Total property rent’ 181.7 150.4 20.8% Increase by'c-£20m In 2014/15 Plant & Machinery 8.8 9.2 (4.3)% operating lease
Slide 16: Costa international - investing for growth
Costa international - investing for growth WHITBREAD 2012/13 Franchise China - China - new stores Poland France - 2013/14 like for like & investment start up * Good progress in Franchise and like for like stores in China * Continuing to invest in — China - new stores, teams and infrastructure — Fran
Slide 17: Summary - underlying profit & loss
Summary - underlying profit & loss WHITBREAD £m 2013/14 Underlying profit before tax 411.8 Pension finance cost - IAS 19 (23.6) Amortisation of acquired intangible (2.7) Profit before tax, pre exceptionals 385.5 Taxation ~ (88.0) Net profit, pre exceptionals 297.5 Exceptionals 25°39 Profit for the y
Slide 18: Exceptional items
Exceptional items WHITBREAD £m 2013/14 2012/13 Impairment of PPE & net profit/loss on disposals 9.9 VAT on gaming income (reversal of 2010/11 benefit) (4.6) - Interest on exceptional tax & the unwinding of discount rate on provisions (2.0) 9.7 Tax on exceptional items 5.6 (1.3) Deferred tax relating
Slide 19: Good operational cash generation to fund investment
Good operational cash generation to fund investment, dividend growth and reduce net debt WHITBREAD (£m) Pension Other Decrease in net Cashflow from Freehold Capital Dividends Interest debt operations investment expenditure * Net debt reduced by £79.5m to £391.6m * Cash dividend of £62.4m after scrip
Slide 20: Capital expenditure driving organic growth
P casita expenditure driving organic growth WHITBREAD Cash Capex by business (£m) Expansion (£m) Maintenance (£m) mo © 18 ¢) 22 2012/13 2013/14 2012/13 2013/14 2012/13 2013/14 * Accrued capital spend £336.6m (2012/13: £341.1m) * Cash capital expenditure down year on year due to Expansion capex - low
Slide 21: Focused on returns
Focused on returns WHITBREAD 7 ] Y ¢ Group return on capital improved 1.4% pts year on year * Increased mix of leases in Hotels & Restaurants impacted Group returns by +0.6% pts 2012/13 2013/14 2012/13 2013/14 2012/13* 2013/14 Whitbread Hotels Costa Grou & Restaurants e Returns are calculated by div
Slide 22: Strong balance sheet and funding
Strong balance sheet and funding WHITBREAD * Maintaining investment grade with net debt to EBITDAR (pension and lease adjusted) < 3.5x (year end 3.0x) * Diverse source of funding and spread of maturity dates Funds from operations Leasehold agreements, 6 to 25 years Sale and lease backs, 25 years US
Slide 23: Other financial items
Other financial items WHITBREAD ¢ IAS 19 pension gross deficit of £534.3m (£541.7m as at 28 February 2013) — Cash contribution of £71.2m — Re-measurement loss of £37.7m principally due to reduction in discount rate from 4.60% to 4.30% — Next triennial pension review based on March 2014 valuation * F
Slide 24: Effective tax rate at 22.9%
Effective tax rate at 22.9% WHITBREAD Reconciliation 2013/14 % pts Taxation at UK standard rate 23:1 Unrelieved losses and permanent differences 1:6 Indexation on capital gains (0.7) One off revision to prior year tax computations (1.1) Effective tax rate 22.9 * Effective tax rate was lower than exp
Slide 25: Considerations for 2014/15 - comparatives progressively tougher in Premier Inn
Considerations for 2014/15 - comparatives progressively tougher in Premier Inn WHITBREAD Occupancy ARR Revpar Achieved Achieved (€) 3 (€) ai : Achieved (%) Q2 Q3 C Qa 8 2% pts
Slide 26: Considerations for 2014/15
Considerations for 2014/15 WHITBREAD * Good first two months — Relatively soft comparatives/favourable weather * Tougher second half comparative — Like for like sales +5.6% in H2 2013/14 — Benign weather in Q4 2013/14 * Investing an incremental c.£10m of cost in Enhanced refurbishment of c.12,700 ro
Slide 27: Summary
Summary WHITBREAD * Delivered 16.5% profit and 20.1% EPS growth * Good operating cash flow of £601.3m * Focused on maintaining a good return on capital ¢ Strong balance sheet WHITBREAD
Slide 28: Current trading
Y ewenaa Ke WHITBREAD ww “Making everyday experiences special” & Whitbread Hotels & Restaurants @® Costa @ Good Together Current trading
Slide 29: Making everyday experiences special
“Making everyday experiences special” WHITBREAD f (A Customer Winning Teams Heartbeat Profitable Growth sos 22 million Whitbread customers every month Served by 43,000 employees Through 2,800 UK outlets 400 million Every year we sell 5) million Premier Inn rooms cups of Costa”
Slide 30: Investing in our people
F ivaettng in our people WHITBREAD f (a Customer 4 Winning Teams Heartbeat Profitable Growth ¢ Record employee engagement scores * Apprenticeship scheme core to our people strategy — 557 apprenticeships in 2013/14 Engagement 73% 78% 80% ¢ Around 3,000 new jobs created THE SUNDAY TIMES P| ° ie) UNITE
Slide 31: Investing in our customer experience
Investing in our customer experience WHITBREAD f £ Customer Winning Teams Heartbeat Profitable Growth Srameier Score Ses » &® COSTA 59.8% 66.1% 54.0% fio fh22% | +7.0% f-s2» | +3.7% §) s10« WHITBREAD
Slide 32: Investing in growth
Investing in growth WHITBREAD f ‘a Customer ; ee 7 ee Sows COSTA 28 new UK hotels 177 net new UK stores c.11,500 rooms in committed pipeline 777 new UK Costa Express machines 2 new international hotels 157 net new international stores 22 international hotels in 178 new international the committed pi
Slide 33: Sustained shareholder value creation
Sustained shareholder value creation WHITBREAD f (a Customer : Heartbeat Profitable Growth Sales (£m) 1,334.6 Underlying basic EPS* (p) DPS (p) 2009/10 2010/11 2011/12 2012/13 Return on capital* 33 * Restated for the impact of IAS 19 (revised 2011) WHITBREAD
Slide 34: On track for 2016 and 2018 milestones
On track for 2016 and 2018 milestones WHITBREAD UK rooms’ COSTA System sales” 34 *UK & Ireland, ** Worldwide 2012/13 51,671 2013/14 2016 2018 milestone milestone (set April 2011) (set April 2013) c.65,000 c.75,000 c.£1.3bn WHITBREAD
Slide 35: Whitbread Hotels & Restaurants
Whitbread Shareholder value creation Siktate w weeeraiieni Delivering organic growth Premier Inn sales up 13.4% Whitbread Hotels & Restaurant sales up 3.9% Restaurants sales up 9.8% Profits up 11.2% to £348.1m By winning market share Opened 28 UK hotels and 3,546 rooms in 2013/14 Pipeline of c.11,50
Slide 36: Premier Inn
Premier Inn | WHITBREAD
Slide 37: Delivering value for customers
Delivering value for customers Premier Inn Product Best Best Customer consistency location value for value and quality choice money : Customer Growing Premier Inn satisfaction Growing occupancy KPls and brand network and ARR strength optimisation WHITBREAD
Slide 38: Widening the gap - giving greater customer choice
Widening the gap - giving greater customer choice Number of UK hotels 620* 2011/12 2012/13 2013/14 S : Whitbread C titor Datab: AM:PM Hotel A Fy 8 minclagies Rare in Paina ‘or Database/ lote's fl ibis [_] Holiday Inn Express [_] Travelodge [_]Premier Inn WHITBREAD
Slide 39: Top customer satisfaction
2» Top customer satisfaction _ remier inn * TripAdvisor average score 4.3 out of 5.0 ¢ Leading the YouGov Hotel Brandindex Premier Inn Hilton ag Holiday Inn Travelodge Holiday Inn Express 10% 10% Fe _— ae | 7 a; Ibis 39 Source: YouGov Brandindex = an aggregate of 6 measures. 1. Impression 2. Quality
Slide 40: Best value for money - gap continues to widen
Best value for money - gap continues to widen 2 Premier Inn YouGov value for money measure x Premier Inn Travelodge a Holiday Inn Ibis Marriott eae eretony Graph source: YouGov Brandindex. 52 week rolling average 1st January. 40 Score = positive answers minus negative answers divided by total number
Slide 41: Investing in our product
Investing in our product * Invested c.£80m in refurbishment and maintenance * ‘Best ever bed’ - new bed rollout 10,000 in 2013/14 & 20,000 forecast in 2014/15 Refurbishment Refurbishment Cash Rooms completed plan cycle cost in 2013 - 2015 2013/14 actual 2014/15 Forecast tg TEES Ct 6 years c.£2,500 9
Slide 42: Upgrading the estate
Upgrading the estate 2013/14 2017/18 * By 2018 90% 10% of our estate will be ID3/ID4, up from 60% in 2013/14 WHITBREAD
Slide 43: Winning combination of room growth and revpar growth
4B Winning combination of room growth and revpar growth 2 Premier Inn Room growth UK regions Room growth Greater London 17.4% 15.3% [ : 2011/12 2012/13 2013/14 2011/12 2012/13 2013/14 Revpar Revpar £68.72 £37.85, £38.34. £38.55 £40.44 tf : a aa 2010/11 2011/12 2012/13 2013/14 2010/11 2011/12 2012/13
Slide 44: Strong occupancy provides rate opportunity
Strong occupancy provides rate opportunity Occupancy UK regions Occupancy Greater London TSK eee 74% 2010/11 2011/12 2012/13 2013/14 2010/11 2011/12 2012/13 2013/14 ARR ARR £88.26 £83.09 ae £79.86 2010/11 2011/12 2012/13 2013/14 2010/11 2011/12 2012/13 2013/14 = Premier Inn Economy midscale « Sharpe
Slide 45: Dynamic pricing - continuing to drive progress
Dynamic pricing - continuing to drive progress 2 Premier Inn Occupancy FY 201 Ste 78.5% : 78.0% 77.0% ii a | a a - 87.2% Monday Tuesday Wednesday Thursday a Saturday Sunday Like for like revpar FY 2013/14 vs FY 2012/13 Revpar % Monday Tuesday Wednesday Thursday Friday Saturday Sunday i} Like for lik
Slide 46: Dynamic pricing - the journey continues
Dynamic pricing - the journey continues 2010 Flexible pricing 21 price ladders 1 model 2011 Launched Flexible and Saver pricing 53 price ladders 5 models Consistent approach to price cap 2012 Daily pricing (from 4 x per week) 80 price ladders 5 models Improved event monitoring Invested in pricing mo
Slide 47: premierinn.com - strong direct digital distribution
premierinn.com - strong direct digital distribution mic environment i oogle BING ! cpsnanarran Search engines 50ogle SING YaHoo! Meta search veg tripadvisor :co.uk —_ c OTAs 7 &xvedia inc. Booking 2010/11 2011/12 2012/13 2013/14 H | D) . : : lotels Our preferred cistibution channel - direct to premi
Slide 48: Growing mobile channels
Growing mobile channels New mobile website New iPhone App 36% of visits New mobile sites from mobile improved overall devices up conversion from 22% in 2012/13 WHITBREAD
Slide 49: Strong organic pipeline
Strong organic pipeline - on track for 2016 and 2018 milestones Premier Inn tnd c. 65,000 signe milestone * Growing pipeline c.11,500° * 2014/15 c.40 new hotels c.4,500 new rooms c.200 room closures c.70% of room openings in H2 49 [_] Premier Inn [Mj hub [fj Committed pipeline [J Uncommitted pipelin
Slide 50: Strong London room growth
Strong London room growth * c.5,500 London rooms in committed pipeline * c.30% of 2014/15 openings in London Central London 3,300 Total including committed pipeline 50 [_] M25 belt [fj Greater London excluding Central London [J Premier Inn: Central London [J Hub: Central London WHITBREAD
Slide 51: First hub hotel to open in St Martin's Lane Autumn 2014
© update * First hub hotel to open in St Martin’s Lane Autumn 2014 * hub will deliver 3,000 of the c.75,000 growth milestone rooms by 2018 London c.1,400 rooms committed 7 sites Edinburgh c.300 rooms committed 2 sites
Slide 52: International - continuing progress
International - continuing progress Premier nn. * Middle East — Good profit growth }} premierinn.ae — Average TripAdvisor score of 4.4 Bar & restaurant * India ; ‘ : Costa coffee Kids stay free — Small progress in a challenging market 7 >* } I Free WiFi * Building pipeline in South East Asia Like fo
Slide 53: International pipeline - moving towards asset light
International pipeline - moving towards asset light Increasing capital light pipeline Growing importance of South East Asia 22 22 Light " - juial Middle-East ™ India ™South East WHITBREAD
Slide 54: Restaurant brands: Beefeater, Brewers Fayre, Table Table
Slide 55: Stronger offering - delivering a better customer experience
P Stronger offering - delivering a better Wwe D> (— | | customer experience Ges™ Ge eis * Total sales £526.1m, up 3.9% — Like for like sales up 1.6% — Outperformed the Coffer Peach* — Like for like spend per head** up 2.5% year on year * Q4 benefited from favourable weather comparatives and less dis
Slide 56: a= = Ww Ve
a= = Ww Ve g Up Great Memories Ss aay or
Slide 57: Managing margins
a e » Managing margins call Brewers Inflation 2-3% Mitigating inflation Wages Food r~ eH - * Second half margin improvement offset first half margin contraction: * Over £2.7m of labour efficiencies year on year + Menu management savings offsetting F&B inflation + Smarter promotions WHITBREAD
Slide 58: Brewers Fayre - building a national brand
' Brewers Fayre - building a national brand Revised restaurant and logo design Old restaurant and logo design CASTLE LAKE Lu
Slide 59: Brewers Fayre - improving food quality and maintaining value
Brewers Fayre - improving food quality and maintaining value
Slide 60: Beefeater - rejuvenating our national brand
Beefeater - rejuvenating our national brand Old restaurant Revised restaurant and logo design TER and logo design BEEEEAT Beefeater:
Slide 61: Beefeater - improving food quality and maintaining value
Y Beefeater - improving food quality and maintaining e value Beefeater:
Slide 62: Beefeater - modernising the interior
rs eefeater - modernising the interior Bedpentet Old interiors Modernised interiors
Slide 63: Enhancing the customer experience with limited capital investment
Enhancing the customer experience with limited capital investment Bouton Brewers Fayre * 22% of the estate converted — Further 112 conversions during 2014/15 — Average investment/restaurant c.£50k Beefeater * 8 Beefeaters converted in 2013/14 Further 20 conversions in 2014/15 — Average investment/re
Slide 64: Coffee expertise - international
Coffee expertise - international Costa China WHITBREAD
Slide 65: Costa - another good performance
Costa - another good performance System sales up 19.4% to £1.2bn New stores gross 334, taking the total number of stores to 2,861 worldwide Strong UK like for like growth of 5.7% Added 955 Costa Express machines in 2013/14, total of 3,515 Underlying profit up 21.9% to £109.8m Return on capital up 5.
Slide 66: Strength and breadth
Strength and breadth UK Retail Equity stores Individual franchise Costa Enterprises Costa Express Corporate Partnerships Costa EME! Europe, Middle East and India Costa Asia China and South East Asia System sales £650.3m 17.5% growth System sales £287.2m 22.0% growth 1,397 stores +12.3% ———__Y 358 st
Slide 67: Extending our lead
Extending our lead of ©] 4 TA Number of UK stores Preference ** Costa is the UK’s favourite 1,552 and the gap is widening 1,342 1,175 731 743 757 l " ; " ll ; |_| COSTA WB Starbucks [J Nero *Costa’s total market share 2009 to 2013 67 1 Source: Allegra Project Cafe 2013; Costa 2013 store So number ac
Slide 68: UK Retail - a growing market
UK Retail - a growing market K coffee shop market, number of outlets 2008 to Global coffee consumption (kg/capita/year) ** Finland Norway Sweden Germany France USA Spain Poland UK 68 Source: “Allegra Project Cafe 2013; “*International Coffee Organisation, 2011 WHITBREAD
Slide 69: UK - continuing growth
UK - continuing growth edo} { TA Retail Park/ Drive Thru Shopping centre/high street +200 University/ Office/Other Transport Concession WHITBREAD
Slide 70: Higher customer transactions - driving like for like growth
Higher customer transactions - driving like for like growth cO§ TA ¢ Product/innovation Like for like growth driven . by transactions — Exceptionally successful Christmas campaign 5.7% — New food range including breakfast — New drinks - hot chocolate * Team — Engagement 82% — 2,000 baristas complete
Slide 71: Costa Express - growth beyond the stores
Costa Express - growth beyond the stores COSTA * Asuccessful year COSTA — Added 955 machines — Total of 3,515 machines — c.600 new machines in 2014/15 * New channel potential — Travel — Business and Industry — Education * International - early days — Poland 142 machines — Making progress in new mark
Slide 72: International - investing in growth
International - investing in growth COSTA Number of stores Net stores Future store opened in last 5 growth 2018 years Franchise Zon +c.250-300 Equity 408 +c.500-600 * c.1,850 international stores by 2018 2009/10 2010/11 2011/12 2012/13 2013/14 72 C] International franchise | International equity WHI
Slide 73: International franchise - a successful story
International franchise - a successful story Opened 119 new stores - highest in five years Middle East strong performance and growing market share in Ireland Getting the strategy right - Good localised marketing — Product innovation — Growing quality partners New countries — Spain, Morocco HITBREAD
Slide 74: European Equity - growing the brand
European Equity - growing the brand COSTA * Poland - a recovery plan ina * France - early days but good start difficult market — Closed 15 unprofitable stores - — Rebranding to Costa on plan ~ Smart pricing and focus on product development 4 equity stores 2 franchise stores Trialing 3 Costa Express
Slide 75: China - a platform for growth
China - a platform for growth ego} § TA May 2011 — bine Just 3 cities ¢ High single digit like for like growth Beijing @ ” . . se ays a4 E * Mature stores in China good profitability Shanghai * Expanding the day parts Guangzhou @ Li — Driving the morning coffee habit a i «lll — Focussing on Ice Cold
Slide 76: Delivering on targets 2017/18
Delivering on targets 2017/18 Coo’ 16C ETHER... Committed to raise £7.5m for new Premier Inn Clinical wing at Great Ormond Street Hospital aaae (over £2.2m raised to date) me child fest and alu Over £1.5m raised for Costa Foundation in 2013/14 Created around 3,000 new jobs ae A els and Restaurants 5
Slide 77: Current trading
Current trading WHITBREAD * Good first two months of the new financial year — Relatively soft comparatives and favourable weather * Tougher second half comparative * Continuing to invest in our customer experience and international growth — Whitbread Hotels & Restaurants - digital and dynamic pricin
Slide 78: Summary
F sarainany WHITBREAD ww Another year of double digit growth SMe s ee Sales 13.0% EPS 20.1% Dividend 19.9% Record employee engagement Record customer engagement Delivering 2016 and 2018 milestones, together with focus on return on capital, will create further substantial shareholder value
Slide 79: WHITBREAD
WHITBREAD
Slide 80: Appendices
F sepencis zee WHITBREAD
Slide 81: Standard Information - General
Slide 82: Standard Information - Hotels & Restaurants
Slide 83: Standard Information - Hotels & Restaurants cont.
Slide 84: Standard Information - Costa
Slide 85: Growth milestones being delivered
Slide 86: Net debt to EBITDAR
Slide 87: Revpar outperformance
Slide 88: Annual Results 2013/14