Whitbread Plc · LSE:WTB
Whitbread — Debt Investor Presentation (May 2021)
26 slides from Whitbread's debt investor presentation, May 19, 2021
Slide 1: Full Year Presentation to holders of our bonds
19 May 2021 Full Year Presentation to holders of our £450m 3.375% bonds due 2025 £300m 2.375% Green bonds due 2027 £250m 3.000% Green bonds due 2031
Slide 2: Contents
Contents Presented by Nicholas Cadbury Key messages p3 Full year to 25th February 2021 p4 Looking forward p12 Force for Good p19 Credit highlights p23 2
Slide 3: Key messages
Key messages Premier Inn market share gains in the UK and building a national network in Germany Full year to 25 February 2021 Looking forward Operations • Brand strength and commercial initiatives driving demand • Rapid and decisive response to COVID-19 • Investing in refurbishments and marketing,
Slide 4: Full year to 25 February 2021
FULL YEAR TO 25 FEBRUARY 2021 4 4 4
Slide 5: UK Premier Inn: Resilient occupancy levels despite COVID-19 impact
UK Premier Inn: Resilient occupancy levels despite COVID-19 impact First Lockdown National Second Third lockdown restrictions restrictions lockdown lockdown starts eased introduced Premier Inn UK occupancy levels: (normal occupancy levels in the high 70%s) 58% 51% 52% 40% 35% 33% 31% 29% 24% 23% 1%
Slide 6: UK Premier Inn: Material outperformance vs. broader market
UK Premier Inn: Material outperformance vs. broader market Strong brand and direct distribution is driving material outperformance in the UK Outperformance vs. the M&E hotel market PI outperformance1 5.2% 7.9% 8.4% 10.4% 10.5% 4.8% 5.2% Benefitting from a higher level of competitors’ temporary closu
Slide 7: Germany: Continued expansion despite COVID-19
Germany: Continued expansion despite COVID-19 Challenging market with COVID-19 restrictions throughout Capitalised on the opportunity to materially accelerate our the year… expansion; now at 72 hotels…2 25000 250 60% Germany total sales recovered: 2020/21 as % of 2019/20201 M&E 20k Rooms 19k 19k 200
Slide 8: Financial performance reflects lockdown closures
Financial performance reflects lockdown closures £m FY21 FY20 Statutory revenue 589.4 2,071.5 COVID-19 impact Adjusted revenue 588.9 2,062.1 Other income (excl. rental income) 154.0 13.9 Includes £138.3m benefit from the UK Government’s Job Retention Scheme Discretionary cost savings, reductions in
Slide 9: Actions taken to protect cash
Actions taken to protect cash Cash outflow reflects COVID-19 restrictions. UK hotels cashflow positive when leisure travel permitted August to October £m Working capital outflow driven by: • £71.2m net customer deposit outflow • £14.0m amount due re UK Government Job Retention Scheme • £15.5m reduct
Slide 10: Actions taken to protect liquidity and financial position
Actions taken to protect liquidity and financial position FY21 ACTIONS TO REDUCE COSTS AND PRESERVE CASH STRONG TRACK RECORD OF MATERIAL COST SAVINGS New 3-year £100m efficiency programme • £1bn Rights Issue in June 2020 • Discretionary P&L spend paused and capex reduced FY17 £37m • Executive pay re
Slide 11: Strong balance sheet and maturity profile
Strong balance sheet and maturity profile PROPERTY: OPERATIONAL AND FINANCIAL FLEXIBILITY BALANCED DEBT MATURITY PROFILE Property backed balance sheet Debt maturity profile 1, 2, 3 Freehold Leasehold Private Placement Undrawn RCF £m Public Bond (uncovenanted) UK Open estate Open estate 61% 39% Green
Slide 12: Looking forward
LOOKING FORWARD 12 12 12
Slide 13: UK: Brand, scale and operating model underpins strong performance
UK: Brand, scale and operating model underpins strong performance UK’s largest hotel chain…by a clear margin1 UK’s favourite hotel brand…by a clear margin 79k Number of rooms 44k 18k 9k Winner of YouGov best value hotel chain for the 10th year running Premier Inn Travelodge Holiday Inn Express Ibis
Slide 14: UK: Budget model is higher growth and more resilient in downturns
UK: Budget model 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 UK total booked room % annual growth1 12% Branded Budget Other branded and independents 8% 4% 0% -4% -8% -12% 2008 2009 2010 2011 20
Slide 15: UK: Broad and diversified customer mix is resilient
UK: Broad and diversified customer mix is resilient Over-indexing in UK regions, Over-indexing in domestic Even split of leisure and Broad business mix is resilient that will recover faster than demand that will recover business customers London faster than international Regions vs London Domestic v
Slide 16: Germany: Opportunity to replicate Premier Inn's UK success
Germany: Opportunity to replicate Premier Inn’s UK success [Ambition to be the no.1 budget hotel operator Material growth in the estate during lockdown March 2020 February 2021 A structurally attractive market Replicate our UK model with no clear market leader and Hamburg Hamburg over 70% independen
Slide 17: Investing across the business in a measured way
Investing across the business in a measured way DISCIPLINED CAPITAL EXPENDITURE FY22 AND BEYOND Committed growth capex of £600m at good returns 700 • UK: organic investment; 12k pipeline - £300m capex over a c.4 year period £588m • Germany: investment in estate expansion; 8k pipeline - £300m capex o
Slide 18: Focus on return to investment grade metrics
Focus on return to investment grade metrics Evolution of lease adjusted net debt : FFO 4.0x Investment grade metric: 3.5x 3.0x 2.0x 3.3x 2.6x 1.0x 0.0x (0.4)x (1.0)x FY18 FY19 FY20 FY21 FY22 onwards • Significant cash outflows during FY21 put pressure on near-term leverage • £1bn rights issue procee
Slide 19: Force for Good
FORCE FOR GOOD 19 19 19
Slide 20: Green Bond Framework
Green Bond Framework • Published February 2021 • Second Option Provider: Sustainalytics • Eligible green projects aligned to United Nations’ goals • Progress reported against these on an annual basis ICMA Category for Eligibility criteria Example Green project Reporting metric Relevant SDG use of pr
Slide 21: A Force for Good: Operating responsibly and sustainably
A Force for Good: Operating responsibly and sustainably Being a Force for Good in all we do supports our vision of enabling people to live and work well TARGETS OPPORTUNITY COMMUNITY RESPONSIBILITY Meaningful No barriers to entry contributions to the Operating in a way 50% carbon Eliminate and no li
Slide 22: A Force for Good: Operating responsibly and sustainably
A Force for Good: Operating responsibly and sustainably Clear objectives and measurable targets to help us meet our goals KEY ACHIEVEMENTS No. 1 £18m 39% HOSPITALITY RAISED FOR GREAT REDUCTION IN APPRENTICESHIP ORMOND STREET HOSPITAL CARBON EMISSIONS IN PROVIDER CHILDREN’S CHARITY 3 YEARS 11 years 5
Slide 23: Credit highlights
CREDIT HIGHLIGHTS 23 23 23
Slide 24: Credit highlights
Credit highlights Decisive and effective actions taken to mitigate business and financial 1 Largest hotel operator in the UK with the strongest brand 7 disruption from COVID-19 and protect stakeholders, along with longstanding proven ability to manage costs through a cycle Vertically integrated mode
Slide 25: Q&A
Q&A 25 25 25
Slide 26: 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