Slide 1: Whitbread PLC Interim results 2006/07
Whitbread PLC Interim results 2006/07
Slide 2: Anthony Habgood, Chairman
Welcome with a smile Anthony Habgood Chairman
Slide 3: Christopher Rogers, Finance Director
Christopher Rogers Finance Director
Slide 4: Summary
Summary H1 2006/07 H1 2006/07 H1 2005/06 % change PBT from continuing £109.8m £90.9m 20.8% operations, pre exceptionals EPS from continuing 30.43p 22.09p 37.8% operations, pre exceptionals Proforma growth in EPS 12.0% from Continuing Whitbread Proposed interim dividend 8.10p 7.35p 10.2%
Slide 5: Summary – profit & loss
Summary – profit & loss H1 2006/07 £m H1 2006/07 H1 2005/06 % change Revenue 787.3 803.3 (2.0)% Profit from operations 142.1 137.9 3.0% Central costs and other (11.4) (13.6) 16.2% Interest (20.9) (33.4) 37.4% PBT from continuing 109.8 90.9 20.8% operations, pre exceptionals
Slide 6: Summary – profit & loss continued
Summary – profit & loss continued H1 2006/07 £m H1 2006/07 H1 2005/06 % change PBT from continuing 109.8 90.9 20.8% operations, pre exceptionals Taxation (36.1) (30.9) Net profit from continuing 73.7 60.0 22.8% operations Discontinued operations 0.7 27.5 Exceptionals 61.6 13.3 Profit for the year 13
Slide 7: Treatment of businesses within segmental analysis
Treatment of businesses within segmental analysis • Pub Restaurants • Trading results of the disposed estate, for 21 weeks through to July 28th, are treated as continuing operations • Pizza Hut • Held for sale from period 1 this year • Profit excluded from the consolidated income statement • Prior h
Slide 8: Further segmental changes at year end
Further segmental changes at year end Joint sites: breakfast income and adjacency charge • Historical position • Profit on breakfast sales in pub restaurant, next to Premier Travel Inn, accounted for in Premier Travel Inn • Share of profit from Premier Travel Inn guests eating in adjacent pub restau
Slide 9: Revenue by business segment
Revenue by business segment £m H1 2006/07 H1 2005/06 % change Premier Travel Inn 239.2 206.9 15.6% David Lloyd Leisure 118.4 112.0 5.7% Pub Restaurants: retained estate 214.1 212.1 0.9% High Street Restaurants 126.3 112.1 12.7% Less: inter-segment revenue (1.5) (1.5) Sales from Continuing Whitbread
Slide 10: Like-for-like sales
Like-for-like sales Like-for-like sales % H1 2006/07 H1 2005/06* Premier Travel Inn 7.2 7.7 David Lloyd Leisure 2.2 0.0 Pub Restaurants (1.2) (1.2) High Street Restaurants 1.2 (1.8) Total 2.6 0.4 * As reported
Slide 11: Profit by business segment
Profit by business segment £m H1 2006/07 H1 2005/06 % change Premier Travel Inn 84.3 71.8 17.4% David Lloyd Leisure 21.1 21.1 0.0% Pub Restaurants 30.0 39.3 (23.7)% High Street Restaurants 6.7 5.7 17.5% Profits from operations 142.1 137.9 3.0%
Slide 12: Summary – profit & loss continued
Summary – profit & loss continued H1 2006/7 £m H1 2006/07 H1 2005/06 % change Revenue 787.3 803.3 (2.0)% Profit from operations 142.1 137.9 3.0% Central costs and other (11.4) (13.6) 16.2% Interest (20.9) (33.4) 37.4% PBT from continuing 109.8 90.9 20.8% operations, pre exceptionals
Slide 13: Interest charge
Interest charge £m H1 2006/07 H1 2005/06 Interest on borrowings (21.4) (29.1) Non cash interest: Pension interest (charge)/credit (1.0) (3.8) Other 0.9 (0.7) Total interest charge (21.5) (33.6) Interest receivable 0.6 0.2 Net interest charge (20.9) (33.4)
Slide 14: Summary – profit & loss continued
Summary – profit & loss continued H1 2006/7 £m H1 2006/07 H1 2005/06 % change PBT from continuing 109.8 90.9 20.8% operations, pre exceptionals Taxation (36.1) (30.9) Net profit from continuing 73.7 60.0 22.8% operations Discontinued operations 0.7 27.5 Exceptionals 61.6 13.3 Profit for the year 136
Slide 15: Exceptional items
Exceptional items £m H1 2006/07 Business disposals: Pub Restaurants 188.1 Marriott (23.9) Net profit on business disposals 164.2 Other exceptional items: Reorganisation costs (10.3) Other (4.0) Corporation Tax on exceptionals (6.5) Deferred Tax on exceptionals (81.8) Total exceptional costs (102.6)
Slide 16: Cash flow
Cash flow Group year-on-year by items £m H1 2006/07 H1 2005/06 Cash flow from operations 242 150 Cash capital expenditure (125) (135) Disposal of fixed assets 455 17 Interest, tax and dividends paid (72) (107) Interest and dividends received 1 46 Business cashflows 501 (29) Pension payments (56) (55
Slide 17: Capital expenditure
Capital expenditure £m H1 2006/07 H1 2005/06 Premier Travel Inn 63 35 Pub Restaurants 27 31 High Street Restaurants 13 15 David Lloyd Leisure 13 22 Corporate/Discontinued 9 32 Total 125 135
Slide 18: Cost reduction update
Cost reduction update • On target to deliver in 2006/07 the £25m of cost savings communicated last October • Work is substantially complete to identify further savings following the Pub Restaurants disposal in July
Slide 19: Other financial items
Other financial items • Pension deficit decreases from £338m, after the triennial valuation, to £288m benefiting from £50m cash injection in August • Effective tax rate on profit from continuing operations of 32.9% • Capital expenditure forecast for the year increased c.£280m • £400m of disposal pro
Slide 20: Financial summary
Financial summary • Sales from Continuing Whitbread up 8.6% • Like-for-like sales up by 2.6% • PBT from continuing operations, pre exceptionals up 20.8% to £109.8m • Proforma growth in EPS from Continuing Whitbread of 12.0% • Interim dividend up 10.2% to 8.10p • £350m returned to shareholders with a
Slide 21: Alan Parker, Chief Executive
Whithroad Welcome with a smile Alan Parker Chief Executive
Slide 22: Progress in first half 2006/07
Progress in first half 2006/07 • Strong sales and profit performance • Premier Travel Inn and Costa • Improving trends • David Lloyd Leisure • Pub Restaurant strategic refocus • Joint site model • Operational improvement plans • Rapid growth of leading brands • 1,312 new rooms opened at Premier Trav
Slide 23: Progress in first half 2006/07
Progress in first half 2006/07 • Tight cost control • Targeted further savings post Pub Restaurant disposal • Announced disposal of non core assets • Pizza Hut 50% joint venture for £112m with net proceeds of £99m • Solus Pub Restaurant disposals for £497m • T.G.I. Friday’s exploratory exit discussi
Slide 24: Pub Restaurants
Pub Restaurants Half year results 2006 £m 2006/07 2005/06 % change Revenue 296.6 315.6 (6.0%) Profit 30.0 39.3 (23.7%) • (1.2)% like-for-like sales • 21 restaurants refurbished • 18 Beefeaters, 3 Brewers Fayre • 1 new opening Eastbourne Brewers Fayre
Slide 25: The opportunity
The opportunity Eating out market 2000/10 £bn 35.4 40 35 27.6 30 22.0 25 20 15 10 5 8.2 4.9 6.4 0 2000 2005 2010 Source: Mintel April 2006 Pub catering Total market
Slide 26: Brand audit: Beefeater
Brand audit Beefeater • Clearly the stronger concept with highest prompted brand awareness of any pub restaurant brand at 78% (NOP Omnibus Oct 2006) • A relatively distinct position based on more formal eating out and a pub/grill heritage • More focused on couples dining out (fewer families) • Succe
Slide 27: Brand audit: Brewers Fayre
Brand audit Brewers Fayre • Undifferentiated with consumers and does not have clearly different attributes • Serves wide variety of customers and occasions • Highly family-focused at weekends • But fails to attract enough customers from local market because of lack of differentiation
Slide 28: New strategy
New strategy Focus on three key objectives 1. Creating Winning Restaurant proposition • Famous for food • Exciting environments 2. Driving synergy with the adjacent Premier Travel Inn 3. Maximising Premier Travel Inn growth potential
Slide 29: 1. Creating Winning Restaurants
1. Creating Winning Restaurants • New Generation Beefeater • New food platform focussed on great grilled food • Lighter and fresher environments • Revised bar layout with greater emphasis on bar snacks • New Contemporary Dining Concept • Borne out of Brewers Fayre estate • More stylish, aspirational
Slide 30: Famous for food
Famous for food Creating Winning Restaurants • Fewer items / broader choice / more lighter, healthier dishes • Stretched price points • Margin adjustments • New menu designs From To
Slide 31: Broader menu range and price points
Broader menu range and price points Creating Winning Restaurants Main meals Current Previous £ £ Beefeater Minimum price 5.95 7.50 Maximum price 19.99 12.99 Brewers Fayre Minimum price 4.75 5.99 Maximum price 13.99 10.99
Slide 32: Exciting environments
Exciting environments Creating Winning Restaurants Beefeater • New core proposition accelerated • Complete remaining 57 sites by Easter 2007 Brewers Fayre • New Contemporary Dining trials • 32 further sites in 2006/07 • Reviewing remaining 223 sites over next 2 years Average spend per site £400k
Slide 33: Beefeater
Beefeater Creating Winning Restaurants
Slide 34: Beefeater
Beefeater Creating Winning Restaurants
Slide 35: Brewers Fayre
Brewers Fayre Creating Winning Restaurants
Slide 36: Brewers Fayre
Brewers Fayre Creating Winning Restaurants
Slide 37: Brewers Fayre
Brewers Fayre Creating Winning Restaurants
Slide 38: Positive results - average weekly sales
Positive results - average weekly sales Creating Winning Restaurants Results pre and post refurbishment year to September £25.3k £20.2k +25% Pre Post
Slide 39: Positive results - average weekly meals sold
Positive results - average weekly meals sold Creating Winning Restaurants Results pre and post refurbishment year to September 1,780 1,339 +33% Number of meals sold Pre Post
Slide 40: Encouraging results - Beefeater
Encouraging results - Beefeater Creating Winning Restaurants Like-for-like covers growth year-on-year percentage* 6% 5% 4% 3% Year-on-year % 2% 1% 0% Nov Dec Jan Feb Mar Apr May Jun Jul Aug P9 P10 P11 P12 P1 P2 P3 P4 P5 P6 -1% 2006 2005 2006 -2% -3% MQT YOY% * Excluding closure weeks
Slide 41: 2. Driving synergy with Premier Travel Inn
2. Driving synergy with Premier Travel Inn • Joint model drives superior Pub Restaurants performance Sales House profits* (£k) (£k) Joint site restaurants† 1,121 249 (2005/06) vs Stand-alone +31% +54% (2005/06) • Incremental food and beverage sales • Shared labour, operational costs • Capital and ov
Slide 42: 3. Maximising Premier Travel Inn potential
3. Maximising Premier Travel Inn potential • New rooms adjacent to Pub Restaurants • 3,000 rooms over next three years • Average build cost per room £34k • An average ROCE of 18% on capital spend
Slide 43: Driving operational performance
Driving operational performance • Whitbread has excellent sites with outstanding potential • Pub Restaurants add value to Premier Travel Inn today with more synergy in future • We have a new strategy with new management which has started to deliver • The Beefeater brand is sustainable, the Brewers F
Slide 44: Premier Travel Inn
Premier Travel Inn Half Year Results 2006/7 £m 2006/07 2005/06 % change Revenue 239.2 206.9 15.6% Profit 84.3 71.8 17.4% • Like-for-like sales growth of Premier Travel Inn 7.2% • Occupancy 80.0% • Overall RevPar £38.42 (up 3.6%) • Overall ARR £48.03 (up 5.2%) • 1,312 rooms added from 11 new hotels •
Slide 45: Premier Travel Inn: continued growth
Premier Travel Inn Continued growth Like-for-like sales growth % 7.7 7.2 6.5 6.4 6.2 H1 H2 H1 H2 H1 2004/05 2005/06 2006/07
Slide 46: Premier Travel Inn: out-performance against competitive set
Premier Travel Inn Out-performance against competitive set RevPar growth % 9.8 7.8 4.3 1.6 Provincial March - August 2006 London Competitors Premier Travel Inn Scource: Hotstats by TRI Hospitality Consulting
Slide 47: Premier Travel Inn: customer focus
Premier Travel Inn Customer focus • Corporate Travel • Business Account Card upgraded - projected £100m sales for year 2006/07 • Web bookings growth to 45% • New Guest Feedback system • Over 30,000 individual guest responses per month • Intention to recommend – 8 out of 10 of our customers would rec
Slide 48: Premier Travel Inn: sustained room growth
Premier Travel Inn Sustained room growth Rooms ‘000s 50 45 40 35 30 25 20 15 10 01/2 02/3 03/4 04/5 05/6 06/7 07/8 08/9 09/10 10/11 Source: Whitbread
Slide 49: David Lloyd Leisure
David Lloyd Leisure Half year results 2006/7 £m 2006/07 2005/06 % change Revenue 118.4 112.0 5.7% Profit 21.1 21.1 0% • Like-for-like sales at 2.2% • Retention improved 1.7% pts to 73% • Like-for-like membership at UK clubs closed at 311,000 • Total membership now at a record of 375,000 members • Op
Slide 50: David Lloyd Leisure: like-for-like membership
David Lloyd Leisure Members Current like-for-like UK clubs membership 323,500 318,500 313,500 308,500 303,500 298,500 New management team 293,500 Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Aug 2004 2005 2006 Source: Whitbread
Slide 51: David Lloyd Leisure: performance vs competitors
David Lloyd Leisure Performance vs the competitors - first half 2006/07 2 Year-on-year percentage 1.5 1 0.2 0.3 0 -1 -1.0 -2 -3 -4 -5 -4.3 -6 -7 -6.2 Net member growth New member sales Retention growth David Lloyd Leisure Competitors Source: HealthClubBenchmark Survey by Deloitte & Touche Adult memb
Slide 52: Building firmer foundations
Building firmer foundations David Lloyd Leisure • Improving management at club level • Department heads restructure • Management Calibre Review • Higher retention through greater customer focus • New members induction • Brand standards and mystery member audit • Launch of Junior Tennis All Star prog
Slide 53: Costa
Costa Half year results 2006/07 £m 2006/07 2005/06 % change Revenue 81.0 66.7 21.4% Profit 5.7 4.3 32.6% • Like-for-like sales in UK Retail business grown by 6.0% • UK’s most profitable coffee shop chain - profits up by 32.6% • Volume growth (footfall) up by 2.7% • 85 new stores opened year-to-date
Slide 54: Costa: fast-paced growth
Costa Fast-paced growth • 500th UK store in November at Oxford • Expansion into Eastern Europe • Poland • Romania • Bulgaria • c.200 new stores in 2006/07 – 100 in UK and 100 internationally
Slide 55: Costa: stored value card
Costa Stored value card • Trialled in Glasgow and Birmingham (22 stores) • Roll out in November 2006 across 400 sites • Store between £5 and £75 on card • Top up in store or on-line at www.costa.co.uk • Increases spend per head – c.£1 extra per visit • Builds loyalty
Slide 56: Reshaped and refocused
Reshaped and refocused • Focus on four Strategic Business Units • Premier Travel Inn • Pub Restaurants • David Lloyd Leisure • Costa • Robust operational plans to continuously improve performance • Ambitious growth plans for leading brands • Shareholder returns • Further £350m return • Over £1.16bn
Slide 57: Whitbread PLC Interim results 2006/07
Whitbread PLC Interim results 2006/07