Slide 1: Interim Results 2011/12
Interim Results 2011/12 18 October 2011 EAT SLEEP & DRINK WHITBREAD
Slide 2: Anthony Habgood, Chairman
Anthony Habgood Chairman
Slide 3: Andy Harrison, Chief Executive
Andy Harrison Chief Executive
Slide 4: Summary
Summary * Good H1 performance — In line for full year expectations * Growing strong brands, winning share with strong customer propositions * Driving operational performance in tough consumer environment — And building in growing international markets * On track to deliver five year growth milestone
Slide 5: Christopher Rogers, Group Finance Director
Christopher Rogers Group Finance Director
Slide 6: Summary H1 2011/12
Summary H1 2011/12 £m H1 2011/12 H1 2010/11 Change Underlying profit before tax £174.9m £151.8m 15.2% Profit before tax, pre exceptional £165.8m £146.0m 13.6% EPS underlying (diluted) 72.20p 61.27p 17.8% Proposed interim dividend* 17.50p 11.25p 55.6% * interim/final dividend split rebalanced in 2011
Slide 7: Summary - Profit & Loss
Summary - Profit & Loss H1 2011/12 £m H1 2011/12 H1 2010/11 Change Revenue ? 891.3 805.4 10.7% Profit from operations 194.9 173.6 12.3% Central costs (8.6) (10.2) Interest (11.4) (11.6) Underlying profit before tax 174.9 151.8 15.2% 1 2010/11 includes exceptional revenue of £5.0m in respect of VAT r
Slide 8: Summary - Underlying Profit & Loss
Summary - Underlying Profit & Loss H1 2011/12 £m Underlying profit before tax Pension finance cost - IAS 19 Amortisation of acquired intangibles Profit before tax, pre exceptional Taxation Net profit, pre exceptionals Exceptionals Profit for the year H1 2011/12 174.9 (7.8) (1.3) 165.8 (45.6) 120.2 3
Slide 9: Revenue by business segment
Revenue by business segment H1 2011/12 £m H1 2011/12 H1 2010/11 Change Hotels & Restaurants ' 641.9 608.0 5.6% Costa 250.8 198.5 26.3% Less: inter-segment (1.4) (124) (27.3)% Revenue 891.3 805.4 10.7% 1 2010/11 includes exceptional revenue of £5.0m in respect of VAT on gaming machine income
Slide 10: Hotels & Restaurants revenue
Hotels & Restaurants revenue H1 2011/12 £m H1 2011/12 H1 2010/11 Change Premier Inn revenue 393.4 359:7 10.6% Restaurants revenue ' 248.5 247.3 0.5% Exceptional revenue 2 - 5.0 Hotels & Restaurants 641.9 608.0 5.6% 1 Revenue from joint site and stand alone restaurants 2 Revenue arising from refund o
Slide 11: Like for like sales
Like for like sales H1 2011/12 11.0 9.0 7.0 5.0 % 3.0 1.0 -1.0 -1.4 a / -1.6 -3.0 Premier Inn Restaurants Costa mQi mQ2 BHI
Slide 12: Unit growth
Unit growth March Opened Closed Sept 2011 2011 Premier Inn - UK & Ireland 43,374 15265 - 44,639 Premier Inn - International 921 143 (9) 1,055 Total Premier Inn (rooms) 44,295 1,408 (9) 45,694 Restaurants 379 5 (1) 383 Costa - UK 1217 95 (10) 1,302 Costa - International 654 72 (25) 701 Total Costa (s
Slide 13: Profit by business segment
Profit by business segment H1 2011/12 £m Hotels & Restaurants - UK & Ireland Hotels & Restaurants - International * Total Hotels & Restaurants Costa - UK Costa - International Total Costa Profit from operations * 2010/11 restated to exclude Ireland H1 2011/12 169.6 (2.5) 167.1 26.2 1.6 27.8 194.9 H1
Slide 14: Continued focus on returns
Continued focus on returns H1 2011/12 H1 2010/11 ROIC % % Hotels & Restaurants 12.5 12.1 Costa 28.5 35.6 ° Excluding Coffee Nation acquisition Costa has risen to 40.5% * Growth in returns underpinned by good cost control
Slide 15: Summary - Profit & Loss
Summary - Profit & Loss H1 2011/12 £m H1 2011/12 H1 2010/11 Change Revenue 891.3 805.4 10.7% Profit from operations 194.9 173.6 12.3% Central costs (8.6) (10.2) 15.7% Interest (11.4) (11.6) 1.7% Underlying profit before tax 174.9 151.8 15.2% H1 2011/12 central costs benefitting from VAT refund and t
Slide 16: Interest charge
Interest charge H1 2011/12 £m H1 2011/12 H1 2010/11 Underlying interest charge (11.4) (11.6) Pension finance cost - IAS 19 (7.8) (5.8) Interest charge, pre exceptional (19.2) (17.4) Exceptional interest (0.8) Total interest cost (20.0) (17.4) Average debt in first half £454.9m (2010/11 £484.2m)
Slide 17: Exceptional items
Exceptional items H1 2011/12 £m H1 2011/12 H1 2010/11 Profit/loss on sale of property 24.8 Reduction in tax rate 18.3 9.3 Other 3.6 5-0 Tax on exceptional items (7.7) (1.6) Exceptional items 39.0 12.7
Slide 18: Cash flow
Cash flow H1 2011/12 260 210 160 £m 110 60 10 -40 257 Cashflow from operations Cash capital expenditure Dividends Interest and tax Pension Increase in net debt
Slide 19: Capex
Capex H1 2011/12 Capex by business Expansionary v maintenance 140 140 120 120 100 100 £m 80 £m 80 60 60 40 40 20 20 17 0 0 H1 2011/12 H1 2010/11 H1 2011/12 H1 2010/11 mCosta mHotels & Restaurants mExpansionary Maintenance
Slide 20: Property analysis - UK restaurants
Property analysis - UK restaurants As at 1 Sept 2011 383 restaurants Short leasehold Freehold & long leasehold 18 5 Committed pipeline 22 restaurants Short leasehold Freehold & long leasehold
Slide 21: Property analysis - UK hotels
Property analysis - UK hotels As at 1 Sept 2011 Committed pipeline 100% 44,484 rooms” 100% 5 11,000 rooms 90% 4 90% 5 80% - 80% - 70% 70% 4 60% 60% 50% 50% 5 40% 40% - 30% 30% 5 20% 20% 4 10% 10% - 0% T ’ 0% + . = Short leasehold* Freehold & long Short leasehold Freehold & long leasehold leasehold *
Slide 22: Property analysis - UK estate
Property analysis - UK estate Timing of delivery of hotel rooms pipeline % Tenure Split in year Freehold & % of pipeline Short leasehold iii laneaticti 2011/12 (H2) 25 36 64 2012/13 44 79 21 2013/14 25 63 37 2014/15 6 50 50 100 63 37, Restaurants pipeline openings around 6-8 pa up to 2013/14
Slide 23: Property analysis - UK estate
Property analysis - UK estate Return from investment ¢ Return from investment on pipeline ona reported basis c.20% at maturity * Cost of Investment — Short leasehold room c.£8,000 — Freehold/long leasehold room — c.£60-65,000 (land and building)
Slide 24: Other financial items
Other financial items * £156.4m Private Placement in September 2011 at average rate of 4.8%, 1st tranche of £62.6m drawn, balance in January 2012 ¢ Sale and leaseback transaction with a net initial yield under 5.5% with proceeds of £53.8m * IAS 19 pension deficit £517m (£423m net of tax); compares t
Slide 25: Other financial items
Other financial items * Capex forecast of c.£325m for 2011/12 * Effective tax rate for 2011/12 c.27%, falling to c.26% in 2012/13 ¢ Full year pension fund interest charge £14.0m
Slide 26: Summary
Summary ¢ Robust operating cash flow supported by strong asset backing ¢ Underlying profit before tax £174.9m + 15.2% ¢ EPS, Underlying 72.20p +17.8% * Proposed interim dividend 17.50p +55.6%
Slide 27: Andy Harrison, Chief Executive
Andy Harrison Chief Executive
Slide 28: Building strong brands
Building strong brands Driving profitable organic growth Current outlook Summary
Slide 29: Optimising a strong model
Optimising a strong model 2 Premier Inn Core strengths + Strong distribution Dynamic Pricing Website conversion Business optimisation Loyalty + RevPAR Driving performance
Slide 30: Core strengths
Core strengths Strong brand Great product Biggest UK network YouGov no.1 Good Night Guarantee 44,484° rooms 601° hotels Awarded Standard room size Best Budget Travelodge hotel chain On-site restaurant c.33,000 rooms 472 hotels Well maintained estate Hilton c.18,000 rooms 88 hotels * Excludes Ireland
Slide 31: Strong distribution
Strong distribution Growing online 76 % of bookings H1 2007/08 H1 2009/10 H1 2011/12 @ Bookings.com, GDS, Direct Connect mPremierinn.com Premier Inn Premierinn.com 22m visitors to site (+25%) £252m revenue booked (+23%) Mobile app January 2011 TripAdvisor June 2011
Slide 32: Strong distribution
Strong distribution Building Business Account relationships Strong and broad corporate base * Sales up 13% to £103m° ° 26% of Premier Inn revenue * 16,197 live’ accounts (+6.4%) * Average 8.9 cardholders per account m Micro: 5-49 staff. Average spend £4,099 - Average 9.5 room nights mSME: 49 -500 st
Slide 33: Business optimisation
Business optimisation Targeting with CRM Phase 1 live August 2011 Database of 6m customers ee tsar et Early benefits: * Weekend Rewards £2.0m incremental revenue and £1.1m incremental profit * Successful targeted email promotions
Slide 34: Business optimisation
Business optimisation oe Premier Offers becomes Premier Savers £29 Premier Offers * £29 Premier Offers rooms booked successful promotional tool 593,000 +68% — Drives = and holiday Midweek seein up 125% — Non refundable, pay on booking 354,000 Maegedted - New challenges — Refundable pricing drives 13
Slide 35: Business optimisation
Business optimisation 2 Developing dual price structure Premier Savers rooms booked 896,000 sa Midweek up 183% Piss saci Weekend — H1 2010/11 H1 2011/12 Revenue: £14m £26m ™£19 £29 £39 9 £49-£69 ™£79-£99 — <T days out Premier Inn Premier Premier Flexible Savers Refundable Non-refundable Pay on check
Slide 36: Dynamic pricing drives RevPAR
Business optimisation Az Dynamic pricing drives RevPAR '® | Year on year growth (%) 5% 0% Tuesday Wednesday Thursday -5% Occupancy (%) 100% - i 7 ll - i 0% + Monday Tuesday Wednesday Thursday Friday Saturday Sunday Mi Occupancy B&B ARR (£’s) == RevPAR (£'s)
Slide 37: On track UK growth milestones
On track UK growth milestones fy 55,000 rooms secured Rooms* Market share 6% April 2011 September 2011 Committed pipeline To be found 2015/16 at September 2011 * Excludes Ireland
Slide 38: Profile of committed pipeline
Profile of committed pipeline 2 11,000 rooms, 73 hotels Existing catchments 62% Premier Inn Southern — England 23% Central London 18% Scotland 8% Northern | Ireland = 1% 4 Xe Outer London 7 6% Northern a — Midlands & Wales 14%
Slide 39: Profile of committed pipeline
Profile of committed pipeline 11,000 rooms, 73 hotels Joint site 15) Extensions and Bolt-ons 17 Return on investment Solus c.20% 68%
Slide 40: Focus within WHR family
2 Focus within WHR family Eeckground Premier Inn increasingly centralised, Restaurants very localised * Distinct operational and commercial levers * Differential rate of growth Bristol M5 ij p A m remier inn * 112 Cluster Managers * Facilitates growth * Consistent and better customer experience Rest
Slide 41: Increasingly value driven market
Increasingly value driven market Like for like sales, year on year % 8.0% 6.0% * Lower price points performing better™ 0% Brewers Fayre (sph £11) 2 year like for like Table Table (sph £14) 2.0% Beefeater (sph £17) 0.0% | - ° i [| -2.0% *“ Food and beverage sph including VAT
Slide 42: Increasingly value driven market
Increasingly value Ss driven market Brewers Fayre Stronger, better value menus * Brewers Fayre: Buffet Place - all you can eat £5.99 * Beefeater and Table Table: Main dishes off-peak from £4.99 + new menus Drinks promotions £7.99 Breakfast launch Costa ‘Proud to Serve’ Delivering operational excelle
Slide 43: Premier Inn International
Premier Inn International 2 Premier Inn Dethi 2011 * Excluding Dethi Premier Inn Middle East and India performance * 5 hotels * Average RevPAR +15% * Average occupancy’ +7ppt New openings * Middle East — Premier Inn Abu Dhabi Capital Centre (2011) — Premier Inn Abu Dhabi Airport (2013) — Doha Educat
Slide 44: Premier Inn International
Premier Inn International Capital right framework Invest in land and property Lease shell, responsible for fit out Joint Venture Up to 25% as equity investment Small contribution to development costs No equity commitment, pure management contract
Slide 45: Premier Inn International
Premier Inn International Shape of development * Capital right benefits — Speed of roll out — Risk sharing — Need scale for material profits * Target territories — Middle East — India — Asia Pacific * Capital allocation — Investment to date c.£50m — Approx. £30m pa — Capital intensity reduces with c
Slide 46: Outstanding results - Costa
Outstanding results COSTA Stores System sales (£m) Underlying PBIT (£m) 41.8% H1 2010/11 H1 2011/12 H1 2010/11 H1 2011/12 H1 2010/11 H1 2011/12 i uk HB international
Slide 47: Product development - Costa
Product development COSTA THE ICE AGE IS HERE SALES UP 44% LAUNCHED SEPTEMBER 2011
Slide 48: Roadside
Roadside COSTA 3 Drive Thru’s opened 10 more in the pipeline Opportunity for 75 In 785 roadside locations 187 Stores 598 Costa Express/Coffee Nation units
Slide 49: High Street
HIGH STREET Customer segments Recharge, Relax, Refuel Channels High street, Office, Retail Parks, Travel, Shopping Centre, Drive Thru Type “Metro” (Urban/younger), “Evolution” (provincial/mature)
Slide 50: Costa growth milestones
Costa growth milestones Costa Stores UK International Total System sales Profits Costa Express/ Coffee Nation Hh Up7AU7/ 654 1,871 £659m £50m 877 1,900 1,600 3,500 £1.3bn £100m + 3,000 COSTA Nearly double Double More than double Triple + Quadruple profit contribution
Slide 51: On track to deliver growth milestones
On track to deliver growth COTA milestones 2011/12 outturn 2015/16 target® UK Equity NSOs 80 + 400-500 UK Franchise NSOs 70 + ¢.200 Costa Express new units oe ey +c¢.2,100 500 conversions Wholesale PBIT growth + 25% Double PBIT Franchise NSOs 70 + 350-650 Coffeeheaven NSOs 25 + 100-200 China NSOs 55
Slide 52: China - Costa
China Shenyang COSTA <= - Shijiazhuang ( ) Ieee paalle ( Tianjin \ J) a Yor el ) Ni * 16 cities, 117 stores Nanjing : at H1 ¢ Like for like growth of >30% * 50+ new stores during 2011/12 } * 100* store opened td summer 2011 ) Shenzhen JV Territories: [| Yueda Ml Beijing Hualian Group
Slide 53: Costa Express
Costa Express COSTA * Positive customer feedback — 20% increase in cups sold post conversion * Exciting unit growth — Rebranding existing units - 500 — New units - 250 — Strategic partnerships in place — On target to achieve 3,000 by 2015/16 f*. * COMPASS GROUP
Slide 54: Outlook
Outlook * Overall H1 sales performance best guide to the Group’s underlying trading ¢ Monthly trading continues to be variable in challenging consumer economy ¢ First half puts us on track for full year results in line with expectations ¢ Strong and profitable growth drives shareholder value — Premi
Slide 55: Summary
Summary * Good H1 performance — In line for full year expectations * Growing strong brands, winning share with strong customer propositions * Driving operational performance in tough consumer environment — And building in growing international markets * On track to deliver five year growth milestone
Slide 56: Q&A
Slide 57: Standard Information
Standard Information General Achieved Room Rate (ARR) Income before fixed costs (IBFC) Income after fixed costs (IAFC) Joint Sites Like for like sales Occupancy ROIC (Return On Invested Capital) Solus Sites RevPAR/yield EAT SLEEP & DRINK WHITBREAD Hotel accommodation income divided by the number of
Slide 58: Standard Information - Hotels & Restaurants
Standard Information EAT SLEEP & DRINK Hotels & Restaurants WHITBREAD HY 2011/12 HY 2010/11 FY 2010/11 Solus Inc Int Sales £m 229.2 201.9 403.8 IBFC £m 134.4 115:7 zS122) IAFC 1 £m 76.0 64.7 125.3 Net Assets © £m 977.8 955.6 965.3 Joint ? Sales - Joint Sites £m 412.7 401.1 768.9 IBFC £m 186.4 180.3
Slide 59: Standard Information - Hotels & Restaurants cont.
Standard Information Hotels & Restaurants cont. Number of Rooms Solus - Managed - Associate - Franchise & Management Contract Total Solus Joint Sites Total UK and Ireland International? Number of Hotels Solus - Managed - Associate - Franchise & Management Contract Total Solus Joint Sites Total UK an
Slide 60: Standard Information - Costa
Standard Information Costa Headline financials Sales EBITDA from Operations Under lying EBIT from Operations? Net Assets Cash Capital Expenditure Key Operating Measures Like for Like Sales Growth ? Underlying Operating Margin ROIC ‘ - Total Business 1 Return on capital ROIC) is based on underlying E