Slide 1: Making everyday experiences special – Interim Results 2014/15
“Making everyday experiences special” 21 October 2014 INTERIM RESULTS 2014/15
Slide 2: Disclaimer
Disclaimer This presentation (the “Presertatior”) fs provided on a strictly private and corfiertal bass for information purposes arky By attendre or read ths Presentation, you will be deemed to have agreedto the cbligatiors and restrictions set out bel one Without the ecrres prior written corsert of
Slide 3: enara Be
enara Be Chairman Customer ) winning teams Bn / roteabie arowen
Slide 4: Chief Executive
Chief Executive
Slide 5: H1 performance
= H1 performance WHITBREAD Revenue and l (3.01) \ Underlying PBT Capital @ management and cash flow EPS, DPS and fie K@ aha @ amas / (6) Return on capital
Slide 6: Strong H1 performance
Strong H1 performance WHITBREAD Hotels and Restaurants — Total sales up 11.0%, operating profit up 15.0% f f Premier Inn Customer Winning Heartbeat / Profitable Growth — Total sales up 14.7% — Record occupancy at 84.0% Titi: yg (ee Costa — System sales up 15.5%; operating profit up 20.5% — +6.1% lik
Slide 7: Finance Director
Finance Director
Slide 8: Underlying profit before tax up 18.5%
Underlying profit before tax up 18.5% WHITBREAD £m H1 2013/14 H1 2014/15 Change Revenue 1,144.7 1293 °2: 13.0% Profit from operations 23922 277.4 16.0% Central costs (13.5) (13.8) (2.2)% Underlying operating profit 22557 263.6 16.8% Interest (9.6) (7.6) 20.8% Underlying profit before tax 216.1 256.0
Slide 9: Strong performance
Strong performance WHITBREAD Profit (£m) Hotels and Restaurants - UK & Ireland Hotels and Restaurants - International Total Hotels and Restaurants Costa - UK Costa - International Total Costa Profit from operations H1 2013/14 199.1 (3.4) 195.7 44.0 (0.5) 43.5 239.2 H1 2014/15 228.5 @33) 225.0 52.7 (
Slide 10: Continuing strong revenue growth
Y eainttnaa strong revenue growth WHITBREAD Hotels and Restaurants (£m) Costa (£m) 851.9 767.3 +4.3% 442.8 aaeS +11.9% 19 +14.7% 417.6% H1 2013/14 H1 2014/15 H1 2013/14 H1 2014/15
Slide 11: Like for like sales growth by business
4 G Premier Inn — Revpar growth of 8.5% with occupancy up 3.8% pts at 84.1% H1 2013/14 6.9% H2 2013/14 er Int Premier inn 9.6% H1 2014/15 roup like for like sales growth +7.0% Restaurants — H2 last year benefited from r benign weather and H1 this year against softer comparatives 3.4% 3.1% r T 1 H1 H
Slide 12: Costa International - continuing to invest for growth
Costa International - continuing to invest for growth WHITBREAD £(0.3)m H1 2013/14 Franchise Poland France - H1 2014/15 rebrand startup * Good progress in Franchise and like for like stores in China * Continuing to invest in: — China - new stores, teams and infrastructure — Poland rebranding showing
Slide 13: Underlying profit after tax and exceptionals
Underlying profit after tax and exceptionals WHITBREAD £m H1 2013/14 H1 2014/15 Underlying profit before tax 216.1 256.0 Pension finance cost - IAS 19 (12.3) (11.5) Amortisation of acquired intangible (1.4) (1.2) Profit before tax, pre exceptionals 202.4 243.3 Taxation” ETR 21.8% (2013/14 24.7%) (50
Slide 14: Strong EBITDA providing cash generation to fund capital investment
Strong EBITDA providing cash generation to fund capital investment WHITBREAD em} 580.5 502.6 EBITDA Capital Investments Financing, Pension & Tax Dividend (77.8) (62.4) FY 2012/13 FY 2013/14 H1 2014/15 (85.1) * EBITDA growing at double digit Funding organic growth Capex subject to timing of freehold
Slide 15: Strong EBITDA providing cash generation to fund investment and dividend growth
Strong EBITDA providing cash generation to fund investment and dividend growth WHITBREAD H1 (Em) 343.1 88.8 EBITDA Freehold Capital Dividends Interest Pension Other & Increase in net UK hotel expenditure working capital debt investment * Capital cash expenditure of £228.9m (2013/14 £121.7m) includes
Slide 16: Cash capital expenditure driving future EBITDA growth
Cash capital expenditure driving future EBITDA growth WHITBREAD Cash capital expenditure by business Expansion Maintenance (£m) (£m) (£m) H1 2013/14 H1 2014/15 H1 2013/14 H1 2014/15 H1 2013/14 H1 2014/15 * Expansionary cash capital expenditure is up year on * Maintenance cash capital expenditure in
Slide 17: Cash capital expenditure driving future EBITDA growth
Cash capital expenditure driving future EBITDA growth WHITBREAD ¢ Full year cash capital expenditure expected to be c.£500m (2013/14 £306m) £m Full year spend Year on year Hotels and Restaurants c.415 c.185 Growing the pipeline to c.13,000 rooms c.250 c.105 * Greater UK freehold opportunities with c
Slide 18: The role of freehold property in the UK
The role of freehold property in the UK WHITBREAD * Freehold provides financial flexibility — Retains site development profit — Retains added value from refurbishments — Captures full value of operational improvement — Avoids inflationary rent and increases on lease renewal * Record occupancy drivin
Slide 19: Freehold acquisitions and hotel extensions
freehold acquisitions and hotel extensions As at 28 August 2014 56,019 rooms” Committed pipeline c.10,800 c.13,000 FLeases growing in importance. Success in WHITBREAD. 68% 66% l ] 27% f — T a T Leasehold* <35 years Freehold & long leasehold H1 2013/14 H1 2014/15 Wout13/14 M1 14/15 extensions ™@Lease
Slide 20: Strong balance sheet supporting organic growth
Strong balance sheet supporting organic growth WHITBREAD Adjusted Net Debt to EBITDAR (Em) 2,311.8 Net Debt Pension Lease 701.4 commitments (Rent x 8) 2,372.4 762.2 2,491.2 Ina 822.0 Adj Debt EBITDAR(MAT) H1 2013/14 AdjDebt —_ EBITDAR FY 2013/14 Adj Debt EBITDAR (MAT) H1 2014/15
Slide 21: Return on capital up 1.4% pts on last year
Pisani on capital up 1.4% pts on last year WHITBREAD Hotels and Restaurants Costa Group 0.553 520% 35.4% 15.3% 15.8% 9 12.8% 13.3% 13.7% sa H1 2013/14 FY 2013/14 H1 2014/15 H1 2013/14 FY 2013/14 H1 2014/15 H1 2013/14 FY 2013/14 H1 2014/15
Slide 22: Other financial items
Other financial items WHITBREAD ¢ IAS 19 pension gross deficit of £489.2m (£534.3m as at 27 February 2014) Cash contribution of £71.2m, full year c.£82m Actuarial loss/charge on assets and liabilities of £13.2m principally due to reduction in discount rate from 4.30% to 3.85% Next triennial pension
Slide 23: Considerations for H2 2014/15
Considerations for H2 2014/15 WHITBREAD * Good first half — Regional hotel market recovery — Special events - Farnborough and Commonwealth Games — Costa benefited from 955 express machine roll out started in H1 last year * Tougher second half comparatives — 2013/14 like for like sales * 2.8% in H1 2
Slide 24: Summary
Summary WHITBREAD * Astrong performance, delivered: — Underlying profit before tax growth of 18.5% and EPS growth of 21.5% — Return on capital up 1.4% pts to 15.8% * Growth driven by: — Investment in new hotels and improving the quality of our estate — Recovery of the hotel market — Expansion and in
Slide 25: Chief Executive
Chief Executive
Slide 26: Current trading
Current th Trading © ading
Slide 27: Hotels and Restaurants - strong H1 results
Hotels and Restaurants - strong H1 results WHITBREAD Total sales up 11.0%, Profit before tax and interest up 15.0% to £225m Return on capital up 0.9% pts to 13.7% Premier Inn sales up 14.7% and winning market share — 5.6% growth in UK rooms available — 8.8% growth in total revpar — Record occupancy
Slide 28: Slide 28
Slide 29: Premier Inn success drivers
Premier Inn success drivers Dynamic pricing Network strength premierinn.com Premier inn Investing in our product WHITBREAD
Slide 30: The best customer choice, gets even better
The best customer choice, gets even better 2 Premier inn Number of UK hotels 125 H1 2012/13 H1 2013/14 Source : AM:PM Hotels database 31 August 2014 (ant 29 Bremen tiaetrenaried™inetvies @ hotel in ireland Bi Ibis | Holiday Inn Express i Travelodge | Premier Inn WHITBREAD
Slide 31: Investing in the customer experience
Investing in the customer experience Investing Enhanced in better rooms refurbishment cycle 9-12 years Market leading ‘ Quality + Consistency + Value Churning lower quality New hotels hotels 34 new hotels Franchise 2014/15" profit 30 P= Projected \ \ HITBREAD
Slide 32: Investing in better customer experience
Investing in better customer experience Pre ¢ Investment of c.£100m (£80m in 2013/14) in refurbishment and maintenance this year Refurbishment plan Soft furnishings and TV Light refurbishment Full refurbishment Air conditioning Refurbishment cycle 6 years 3 & 9 years 12 years c.£2,500 c.£300 c.£9,60
Slide 33: Churning lower quality hotels - negligible financial impact
Churning lower quality hotels - negligible financial impact om * Closing 255 franchised rooms this year — Net recommend guest score 24.1% - 34.8% pts below estate average = =] a — £0.3m lost contribution =* - z q , " : " E Be canine * c.800 lower quality room closures to 2018 WHITBREAD
Slide 34: Top customer satisfaction
Top customer satisfaction 2 Premier Inn é A Guest Recommend Survey: 69.4% of our customers * Trip Advisor score 4.3 out of 5.0 score Premier Inn 9 or 10 out of 10 ¢ Leading the YouGov Hotel BrandIndex 68.9% 69.4% YouGov Brandindex Ss Hilton 17 Marriott Holiday Inn 10.3% 10.5% Holiday Inn Express Tra
Slide 35: premierinn.com - focused on direct distribution
premierinn.com - focused on direct distribution 2 Premier Inn ¢ Premier Inn direct digital ¢ Launched multilingual up to 79% websites (French, German, — 44% of visits from mobile devices Italian, Spanish) * B2B strength — c.55% of Premier Inn sales Premier Inn volume of reservations by channel 12% N
Slide 36: Dynamic pricing - London sales up 11%
Dynamic pricing - London sales up 11% Total occupancy HY 2014/15 87.6% Ba * 48% | aoe P87 H1 2014/15 Available fo.8% rooms Total revpar Total revpar HY 2014/15 vs HY 2013/14 Occupancy -0.5% pts ARR +2.0% {_] Total occupancy year on year (% pts) [Bj Total ARR year on year (%) Revpar % WHITBREAD
Slide 37: New London hotels performing well
New London hotels performing well — : 2 Premier Inn Whiston Rd Ae, T 2 H1 Occupancy Revpar Premier ine 2) Monument (new) 86.3% £97.27 sy Opened November 2013 78e . @ ( Holborn (new)* c FE Opened August 2014 eles oa Ne British : MuseumHOLBORN @ ee )oxterd st SAINTLGIEES, es e eri Son! Commere;, 5 ? 2
Slide 38: Dynamic pricing - regional sales up 15.6%
Dynamic pricing - regional sales up 15.6% - strong market recovery H1 2014/15 Available rooms +5.0% Total revpar Occupancy +4.2% pts ARR +4.6% Total occupancy HY 2014/15 sim Eee 1%) e338 Total revpar HY 2014/15 vs HY 2013/14 N Wednesday Thursday i Total occupancy year on year (% pts) O Total ARR yea
Slide 39: Half of the estate is over 85% occupancy
Half of the estate is over 85% occupancy (last year one third) Number of hotels* by occupancy 70% TB 70-80% HM 80-85% MM 85-90% [ll -90% WHITBREAD
Slide 40: Organic pipeline - increased to c.13,000 rooms
Organic pipeline - increased to c.13,000 rooms (vs 10,800 in H1 2013/14) Premier Inn New room c.4,500 c.5,500 c.5,000 p.a. openings ene 600 =e 200 255 pen AAG245 c. 5,300 c.65,000 15 2015-16? 2016 milestone 2017 - 2018? 2018 milestone 39 [_Jeremier inn [ijPremier inn +H1 2014/15 [[] Closures [J Comm
Slide 41: Strong London growth
Strong London growth 2 Premier Inn ¢ c.5,500 London rooms in committed pipeline ¢ c.31% of 2014/15 openings in London c.18,000 Rooms in London FY 2013/14 FY 2014/15? FY 2015/16? 2016 - 2018? 2018 milestone | Premier Inn Mil Premier Inn +H1 2014/15 hub milestone | Committed pipeline Uncommitted 40 Lo
Slide 42: First hub hotel to open in St Martin's Lane in November 2014
First hub hotel to open in St Martin’s Lane in November 2014 Providing greater access hub will deliver c.3,000 of the 75,000 growth milestone rooms to Central London by 2018 Committed pipeline of 12 hotels with 9 in London 2,500 hub pipeline (number of rooms) 41 P = Projected
Slide 43: Germany - attractive opportunity
Germany - attractive opportunity 2 Premier Inn WHR Investor Day 3 July 2013 - researching the market UK Germany ¢ Large hotel market c.682k rooms c.900k rooms — Low branded budget penetration c.5% — Fragmented branded competitor set - largest competitor c.19,000 rooms Independents’ share in gradual
Slide 44: Germany - Premier Inn Frankfurt
Germany - Premier Inn Frankfurt ¢ Acquired a trial hotel in Frankfurt — 200 bed hotel — Opens late 2015 — Total cost c.£25m (Freehold) ¢ Frankfurt 5th largest city in Germany Largest financial centre in continental Europe, significant trade fairs Demand is 75% business and.55% domestic WHITBREAD
Slide 45: Premier Inn Germany
« Premier Inn Germany Extending the UK model in a large and fragmented market Similar property market characteristics to the UK Leveraging UK capabilities and overhead Premier Inn demand pool (4.9m overnight stays in Germany from Great Britain in 2013)* * Premier Inn International — Focused on fast
Slide 46: Premier Inn International - continuing progress
Premier Inn International - continuing progress ¢ Middle East — Strong sales and profit performance — Average Trip Advisor score of 4.4 * India — Some progress in a challenging market Premier inn ¢ Building pipeline in South East Asia H1 2014/15 Year on year change % Like for like occupancy premieri
Slide 47: Premier Inn International pipeline - moving towards asset light
Premier Inn International pipeline - moving towards asset light Increasing capital light pipeline Growing importance of South East Asia Ss Ea 2 8 11 5 Oper Committed Mou Open Committed Light Heavy ™ Middle-East “India South East Asia
Slide 48: Whitbread Hotels and Restaurants
i Wartolesa Hotels and Restauran Seu sso i! Beefeater Bswe EAD
Slide 49: Total sales £281.4m, up +4.3%
Total sales £281.4m, up +4.3% — Like for like sales up +3.1% — Continue to outperform Coffer Peach benchmark* — Like for like covers up +1.0% Margins improved against a difficult H1 last year — Fewer, more targeted discounts using loyalty card data Good progress rejuvenating our brands — Brewers Fay
Slide 50: Costa
OLD PARADISE STREET samen nonst no CO$T A OUR NEW COTA MO teat AANTED Made | Wisi London, \i//,% , oe = always > Cag gla = SG ‘
Slide 51: An excellent performance
An excellent performance System sales up 15.5% to £657.3m UK equity like for like sales up 6.1% and transactions up 5.0% Underlying profit up 20.5% to £52.4m Brand preference remains strong Express net machines up 423 to 3,938 Return on capital up 6.6% pts to 42.0% On track for 2016 and 2018 milesto
Slide 52: Strength and breadth
Strength and breadth UK Retail Equity stores Costa Asia China and Costa Enterprises Costa EMEI Costa Express Europe, 51 Individual franchise Corporate Partnerships Middle East and India South East Asia System sales £354.6m 16.7% growth System sales £165.8m 18.1% growth 1,480 stores +12.1% ee 360 sto
Slide 53: Investing for future growth
Investing for future growth ¢ UK Stores — Evolving store design ‘ ae O_ New products = ‘HANDCRAFTED — c.150 net new stores this year COFF is ICED COLD * Costa Express DRINKS PANINIS Rice ee - = TOASTED — Investing in back office infrastructure SANDWICHES — New UK market segments and international ma
Slide 54: Costa UK - a formula delivering success
Costa UK - a formula delivering success COSTA Number of UK stores *Costa’s total market 1.755 1,840 share 2009 to 2013 1,578 1,392 743 757 790 ae [ ; | } [ } | 2011 20 2013 20145 | COSTA MM Starbucks [J Nero 5 t Source: Allegra Project Cafe 2013; Costa 2014 store number actual for H1 2014/15, * base
Slide 55: Transaction growth powers UK retail growth
Transaction growth powers UK retail growth 5.5% 5.0% 5.1% 4.9% I | | | L H1 1213 H2 1213 H1 1314 H2 1314 H11415 54 OLike for like sales QlLike for like transactions
Slide 56: Continuing new UK store growth
Continuing new UK store growth fod 0} | TA Number of stores New retail stores by channel to 2018 Retail Park/Drive Thru Shopping centre/high street | oe University/ Office/Other © oe Transport ” i H12012/13 H12013/14. H12014/15 FY 2017/18P P Concession GUK franchise OUK equity * P = Projected WHITBR
Slide 57: Continuing product innovation
. Continuing product innovation Hi, Jonathan
Slide 58: Evolving our store design
Evolving our store design Over 70% of our estate is new or has been refurbished over the last 3 years 57 WHITBREAD
Slide 59: Costa Express - continuing success
Costa Express - continuing success ogo} § TA Good performance * Channel focus COSTA continues — Travel SEXPRESS [ . 7 Added 423 machines in H1 — Business and Industry Total of 3,938 machines — Education 286 International machines c. 800 new machines for 2014/15 6,000+ a rc : F Number of Costa Expres
Slide 60: European Equity - growing the brand
European Equity - growing the brand ogo} § TA * Poland - encouraging results * France - early days — Rebranded 21 stores to Costa, further 35 this year — 6 equity/3 franchise stores — Trialing 3 Costa Express machines — c.6 further equity openings this year — Food product development — Closed 7 unpr
Slide 61: International franchise - profitable growth
International franchise - profitable growth Total system sales up 8.1% and 18.8% at constant FX Middle East - going from strength to strength — 316 stores, +21 year on year Spain - promising start — Opened first store June 2013 — Now7 stores, 6 in pipeline Republic of Ireland - continued strong perf
Slide 62: China - exciting market
China - exciting market ogo} § TA May 2011 Just 3 cities mate ~ Costa in China eae 2014 Shanghai » 7 Guangzhou bd - Beijing e..., Shijiazhuang @ rece Mid single digit like for like growth Mature stores in China good profitability and growing @ Sher ee _— Investing in growth — Management capabilities
Slide 63: Delivering on targets 2017/18
Delivering on targets 2017/18 Ceod {OC ETHER... Committed to raise £7.5m for new Premier Inn Clinical building at Great Ormond Street Hospital (around £3.4m raised to date) The child fi pst and always Almost £1m raised for the Costa foundation in H1 2014/15 vad Hotels and Restaurants the new long te
Slide 64: Current trading
Current trading WHITBREAD * Trading momentum continues into first few weeks of H2 * Tougher comparatives in H2 — Especially Q4, benign weather last year * Positioned well to deliver full year results in line with expectations WHITBREAD
Slide 65: Summary
a Summary Another strong performance — 17.1% growth in EBITDA 18.5% growth in underlying PBT — Return on capital up 1.4% pts to 15.8% Our leading UK brands go from strength to strength 7.0% like for like growth Excellent guest and brand preference scores Investing for future profit growth Investing
Slide 66: Slide 66
Slide 67: Appendix
“Making everyday experiences special” 21 October 2014 INTERIM RESULTS 2014/15
Slide 68: Slide 68
Slide 69: Definitions - general
ATION - GENERAL Average Room Rate (ARR) Income before fixed costs (IBFC) Income after fixed costs (IAFC) Joint Sites Like for like sales Occupancy Return on Capital (ROC) Solus Sites Revpar/yield Hotel accommodation income divided by the number of rooms occupied by guests Hotels & Restaurants operat
Slide 70: Hotels & Restaurants
Hotels & Restaurants WHITBREAD TOTAL - Hotels & Restaurants Sales - Premier Inn Sales - Restaurants Sales - Total (Underlying) Exceptional Revenue ° Sales - Total Revenue 1BFC AFC EBITDA from Operations Underlying EBIT from Operations Total Net Assets > Return on Capital * Cash Capital Expenditure -
Slide 71: Hotels & Restaurants cont.
Hotels & Restaurants cont. WHITBREAD Numbers with adjacent Premier Inns - Beefeater - Brewers Fayre - Table Table ~ Taybarns Joint Sites * Footnotes * Joint Sites excluding Standalone Restaurants.
Slide 72: Costa
WHITBREAD System Sales - Total Sales - Total EBITDA from Operations Underlying EBIT from Operations * Total Net Assets * Cash Capital Expenditure - Total ? Key operating Measures Like for Like Sales Growth * Underlying Operating Margin Outlet details + Equity - UK Franchise Total UK - International
Slide 73: Group like for like sales growth +7.0%
e ' Group like for like sales growth +7.0% WHITBREAD Premier Inn Restaurants Costa Revpar growth of 8.5% with — Tough comparatives in H2 — Like for like growth led by occupancy up 3.8% pts at 84.1% from favourable weather last transaction growth of 5.0% year 5.0% ; 49% ASY 4.4% sdb +.27 3.1% 1.8% 1.
Slide 74: Revpar outperformance
Revpar outperformance 2 Premier Inn Greater London hotel market UK regions hotel market 6 88.9% 5 9 t 4.3% 77.9% 79.1% 88 H12010/11 H12011/12 H12012/13 "2.2013/14 H1 2014/15 H1 2010/11 H12011/12 H12012/13 H12013/14 H1 2014/15 Premier Inn Total Estate. Economy Midscale Total Estate (includes A A 73 P