Slide 1: Annual Results 2010/11
Annual Results 2010/11 28 April 2011 EAT SLEEP & DRINK WHITBREAD
Slide 2: Anthony Habgood
Anthony Habgood
Slide 3: Andy Harrison, Chief Executive
Andy Harrison feu Executive EAT SLEEP & DRINK WHITBREAD
Slide 4: Summary
Summary * Strong performance in 2010/11 - Total sales up 11.5% - Underlying PBT up 20.1% - Full Year dividend recommended, increase of 17.1% - Good returns - WHR up to 12.3% and Costa at 42.2%* * We are accelerating growth plans - Strong competitive positions - Good return on capital - Clear organic
Slide 5: Summary
Summary ¢ New 5 year growth milestones - Increase Premier Inn UK rooms by 50% to at least 65,000 - Double Costa global system sales to £1.3bn and stores to 3,500 - New “capital lite” approach to Premier Inn International * Immediate focus to strengthen our brands, customer propositions and efficienc
Slide 6: Christopher Rogers, Group Finance Director
Christopher Rogers Group Finance Director EAT SLEEP & DRINK WHITBREAD
Slide 7: Summary
Summary 2010/11 2009/10 Change Underlying profit before tax £287.1m £239.1m 20.1% PORTILLO: CA, £275.6m £2236 23.3% pre exceptional EPS underlying (diluted) 116.1p 96.7p 20.1% Proposed final dividend 33.25p 28.35p 17.3% Total dividend for year 44.50p 38.00p 17.1% EAT SLEEP & DRINK WHITBREAD
Slide 8: Summary - Profit & loss
Summary - Profit & loss £m 2010/11 2009/10 Change Revenue’ 1,599.6 1,435.0 11.5% Profit from operations 333.5 283.2 17.8% Central costs (22.1) (18.4) (20.1)% Interest (24.3) (25-7) 5.4% Underlying profit before tax 287.1 239.1 20.1% EAT SLEEP & DRINK * Includes exceptional revenue of £4.6m in respec
Slide 9: Summary - Profit & loss cont
Summary - Profit & loss cont £m 2010/11 2009/10 Change Underlying profit before tax 287.1 239.1 20.1% Pension finance cost - IAS19 (11.9) (15.5) Profit before tax, pre exceptional 275.6 223.6 23.3% Taxation (80.5) (66.8) (20.5)% Net profit, pre exceptional 195.1 156.8 24.4% Exceptionals 27.0 3:2 Pro
Slide 10: Revenue by business segment
Revenue by business segment £m 2010/11 2009/10 Change Hotels & Restaurants™ Meld ¥3 1,096.0 7.4% Costa 425.0 340.9 24.7% Less: inter-segment 2 (2:7) (4.39) Revenue 1,599.6 1,435.0 11.5% ~ Includes exceptional revenue of £4.6m in respect of VAT refund on gaming machine income WHITBR EAD “Sales betwee
Slide 11: Hotels & Restaurants pre exceptional revenue
Hotels & Restaurants pre exceptional revenue £m +7.0% 1,173 1,096 +10.9% +1.7% @ 2009/10 || ey @ 2010/11 Total Premier Inn Restaurants 1,200 - 1,000 ~ 800 ~ EAT SLEEP & DRINK WHITBREAD
Slide 12: Like for like sales - by business
Like for like sales - by business 9.0% 7.0% 5.0% 3.0% 1.0% -1.0% -3.0% -5.0% 8.6% -4.3% Premier Inn 3.3% 1.7% Restaurants 7.8% 6.6% ™ 2009/10 m 2010/11 Costa Total EAT SLEEP & DRINK WHITBREAD
Slide 13: Unit growth
Unit growth Unit growth March 2010 Opened Closed/ March 2011 disposed Premier Inn - UK 41,720 2,138 (639) 43,219 Premier Inn - International 1,079 : (3) 1,076 Total Premier Inn 42,799 2,138 (642) 44,295 Restaurants 373 8 (2) 379 Costa - UK 1,069 165 (17) 1,217 Costa - International 531 182 (59) 654
Slide 14: Profit & loss by business segment
Profit & loss by business segment £m 2010/11 2009/10 Change Hotel & Restaurants - UK 288.6 251.6 14.7% Hotel & Restaurants - International (5.2) (4.6) (13.0)% Total Hotels & Restaurants 283.4 247.0 14.7% Costa - UK 47.2 36.0 31.1% Costa - International 2.9 0.2 Total Costa 50.1 36.2 38.4% Profit from
Slide 15: Summary - Underlying profit & loss
Summary - Underlying profit & loss £m 2010/11 2009/10 Change Revenue’ 1,599.6 1,435.0 11.5% Profit from operations 333.5 283.2 17.8% Central costs (22.1) (18.4) (20.1)% Interest (24.3) (25-7) 5.4% Underlying profit before tax 287.1 239.1 20.1% EAT SLEEP & DRINK * Includes exceptional revenue of £4.6
Slide 16: Interest charge
Interest charge £m 2010/11 2009/10 Interest on borrowings (28.5) (27.3) Interest credits 4.2 1.6 Underlying interest charge (24.3) (25.7) Pension finance cost IAS19 (11.9) (15.5) Interest charge, pre exceptional (35.8) (41.2) EAT SLEEP & DRINK * Average debt £451.8m, 2009/10 £569.2m WH ITBREAD
Slide 17: Exceptional items
Exceptional items £M 2010/11 2009/10 VAT refund re gaming machines 4.6 Impairment and asset disposals (8.1) (8.1) Tax related items 31.4 18.8 Other (0.9) (7.5) Exceptional items 27.0 K Py 4 EAT SLEEP & DRINK WHITBREAD
Slide 18: Cash flow
Cash flow £m Cashflow from operations Cash capital expenditure Business acquisitions International investment and acquisitions Cashflow after investment - EBITDA - Working capital/other 2010/11 2009/10 409 361 6 15 415 376 (202) (132) (60) (3) (42) 150 202 EAT SLEEP & DRINK WHITBREAD
Slide 19: Cash flow
Cash flow £m 2010/11 2009/10 Cashflow after investment 150 202 Interest, tax and ordinary dividends (120) (132) Pension contributions (9) (6) Disposals / other 5 46 Decrease in net debt 26 110 EAT SLEEP & DRINK WHITBREAD
Slide 20: Capital expenditure
Capital expenditure Capex by business £m Expansionary vs maintenance £m 202 202 132 132 67 71 T 1 2009/10 2010/11 2009/10 2010/11 ® Whitbread Hotels & ™ Costa MExpansionary ™ Maintenance Restaurants EAT SLEEP & DRINK WHITBREAD
Slide 21: Debt maturities
Debt maturities Facilities £m * Net debt of £488m 1,200 at year end _ * Undertake further wo refinancing in 2011 - ¢ Lengthen maturities and broaden sources Up to December 2011 Up to December 2012 Up to March 2013 EAT SLEEP & DRINK WHITBREAD
Slide 22: Pension
Pension * 1AS19 pension deficit £488m (£394m net of tax), compares to £500m (£403m net of tax) at half year * Payment to fund in August 2011 of £55m in line with 2008 triennial valuation ¢ 2011 triennial valuation underway EAT SLEEP & DRINK WHITBREAD
Slide 23: Other financial items - 2011/12
Other financial items - 2011/12 * Capex of c.£350m for full year * Sale and leaseback of c.£50m planned for Q2 * Pension fund interest charge £14m * Underlying effective tax rate of c.27% ¢ Dividend payments to be rebalanced to better reflect earnings profile — Interim dividend to increase from c.25
Slide 24: Other financial items - 2011/12
Other financial items - 2011/12 ¢ Underlying cost of inflation of 2-3% ¢ Estimated incremental contribution in 2011/12 of new space opened in 2010/11 and 2011/12: — Hotels & Restaurants c.£10-12m — Costa c.£8-10m EAT SLEEP & DRINK WHITBREAD
Slide 25: Summary
Summary ¢ Underlying profit before tax £287.1m up 20.1% ¢ EPS, underlying 116.1p up 20.1% * Cash generation of £26m * Proposed Full Year 44.5p, up 17.1% EAT SLEEP & DRINK WHITBREAD
Slide 26: Andy Harrison, Chief Executive
26 Andy Harrison Chief Executive EAT SLEEP & DRINK WHITBREAD
Slide 27: Building on success
Building on success Growing strong brands Driving returns Financial policies Current outlook Summary WHITBREAD
Slide 28: Building on success
EAT SLEEP & DRINK WHITBREAD Building on success Whitbread EPS and revenue growth Revenue 8% CAGR £m Em EPS 29.6% CAGR 1,595.0 2006/07 2007/08 2008/09 2009/10 2010/11 = Continuing pre exceptional revenue =®Underlying diluted EPS continuing EAT SLEEP & DRINK WHITBREAD
Slide 29: Hotels & Restaurants building on success
Hotels & Restaurants pptiicegs ROIC: 12.3%" Profits 7.9% CAGR Continuing revenue 7% CAGR 1,173 & 43,219 32,603 UK room count 895 E 209 | Z 2006/07 2010/11 2006/07 2010/11 Number of rooms i Operating == Continuing revenue Profit EAT SLEEP & DRINK * Total (UK & International) WH ITBREAD
Slide 30: Costa building on success
COSTA Building on ROIC: 42.2%’ 28.6% CAGR 29.1% CAGR 659 50 & E 241 18 2006/07 2010/11 2006/07 2010/11 System sales PBIT EAT SLEEP & DRINK *ROIC 28.1% including Coffee Nation WH ITBREAD
Slide 31: Strategic priorities
Creating a Providing outstanding Driving efficiencies great place to work value and making and investing for our people everyday experiences in growth for who care for our feel special so that long-term customers our customers come shareholder value and back time and again customer choice €o00 16CET
Slide 32: Experience / Distribution
Experience Distribution WHITBREAD
Slide 33: Leading hotel & coffee shop brands
Leading hotel & coffee shop brands Customer heartbeat Growing strong brands ¢ Premier Inn and Costa are No.1 UK brands * Build a bigger lead and establish stronger international presence * Opportunity to move Restaurants to ‘best in class’ — Brand perception (in local market) — Employees — Returns E
Slide 34: Listening to our customers
Guest Recommend Listening to our customers rong bienae [ Premier Inn } Cust ustomer [Responses | Period var ty! Yro var ty] heartbeat A Good Nights Sleep Comfort of Bed etn et 2 __| + 0.8 million customers = = responses Dimer ualty * 86% would recommend a Premier Inn and Oe os | 89% would recommend
Slide 35: Customer data capture
Customer data capture Customer heartbeat FRE COSTA COFFEE CARD °1.2m active cards OFFEE * 41% of transactions include use of a card COF! EXTRA * Cardholders average spend SWEETENER FROM COSTA). i, 6% higher than non card users * Cardholders intention to recommend is 79% vs 63% for non-cardholders Gr
Slide 36: Costa hierarchy of customer needs
COSTA Growing strong brands Hierarchy of customer needs PR Convenience Coffee quality Service Environment Value For Money 100% EAT SLEEP & DRINK Source: YouGov March 2010 - February 2011 WHITBREAD
Slide 37: Premier Inn dynamic pricing
Premier Inn Dynamic pricing - continuing lever for revpar growth 2009 Feb 2010 Dec 2010 2011/12 28 hotel Launch Full trial estate Hotel 1 1 7 7 Categories Rate Levels 13 10 Provinces 24 25 21 London Week parts 2 2 4 7 MW/WE MW/WE MW Peak Daily MW Shoulder WE Peak WE Shoulder Price point Flexible Fle
Slide 38: Premier Inn Premier Offers
P Premier Inn Extending Premier Offers to drive leisure occupancy Premier Offers Rates from £29 Distribution Over 1m room nights sold £22 Meal Deals Breakfast, dinner & drink 588,000 sold over £10m revenue New £19 entry rate On ‘sale’ week of 25 March 320 website hits per second 75,000 room nights s
Slide 39: Restaurants focus on best in class
‘Growing strong brands Appointed Restaurants MD | Focus on ‘best In Class’ assed Thursday night is Curry Night at Brewers Fayre
Slide 40: Costa focus on product and service
co q TA wrong beats Focus on product and service Value ¢ Extend Ice Cold Costa campaign (£5.5m sales in 9 weeks 2010/11, 16% of beverage sales) Experience Distribution * New breakfast range like for likes up 11% * Reduce queues ° New service style ° 78 sites refurbished EAT SLEEP & DRINK WHITBREAD
Slide 41: Premier Inn fast, simple service
P Premier Inn strong brands Fast, simple service Distribution ‘ » Automated check-in kiosks at 33 hotels and all new Solus builds EAT SLEEP & DRINK WHITBREAD
Slide 42: Premier Inn launch of new hotel format
P Premier Inn Launch of new hotel format ¢ Mini Solus format Average 60-80 rooms * Reduced F&B and —_ public area space e Lower build costs Alternative route to market ° More efficient investment vehicle 600* hotel Stratford upon Avon WHITBRE AD
Slide 43: Costa environment design evolution
COSTA Environment design evolution mg i Metro design Shelton Street, Covent Garden 6 stores in Central London 8 in pipeline, Leeds opening summer Distribution q " ‘ iii 7” New ‘Provincial’ store design Nottingham Oxford EAT SLEEP & DRINK WHITBREAD
Slide 44: Innovating for value
Innovating for value Brewers Fayre Buffet Place 24 existing sites, Roll out 50+ in 2011/12 5% sales uplift EAT SLEEP & DRINK WHITBREAD
Slide 45: Premier Inn Business Account
Growing strong brands Premier Inn Business Account builds customer base Value Revenue’ Experience * Revenue up 21% to Te £180m year on year Innovation 180 * 16,600 accounts up 9% Distribution Em * Increased take up by smaller companies * Building strong relationships with government departments 2006
Slide 46: Premier Inn automated channels
Growing strong brands Value Premier Inn Rapid growth of automated channels Automated channels bookings’ * Premierinn.com — 60% of total bookings — £419m revenue (+24%) 45.9% * Premier Inn Apps launched January: £1.4m revenue year to date * Groups Desk: £38.9m revenue . £8.5m in 2007 2006/07 2010/11
Slide 47: Costa broad distribution
COSTA Growing strong brands Broad distribution for customer convenience Contract catering/offices Experience Roadside Distribution Air and rail Concession - In-store/supermarkets iiaiainceniitieciainteiibali | eg estate @ Franchise High Street Small towns EAT SLEEP & DRINK WHITBREAD
Slide 48: Costa broad distribution
COSTA Growing strong brands Broad distribution for customer convenience Value Contract catering/offices Distributio Roadside Air and rail Concession - In-store/supermarkets Shopping centre and retail park Mi Costa @ Costa Express High Street Small towns EAT SLEEP & DRINK WHITBREAD
Slide 49: Costa Express complementary channel
COSTA Growing strong brands A complementary channel Value * Convenience and speed Experience COSTA =>EXPRESS ° Quality coffee Distribution _¢ Fresh beans, fresh milk &£ Extends Costa brand EAT SLEEP & DRINK WHITBREAD
Slide 50: Costa drive thru
COSTA Growing strong brands Innovative new channel Value Experience Innovation Distribution * Ist Drive thru in Nottingham * Will open in May 2011 *6 more in 2011/12 EAT SLEEP & DRINK WHITBREAD
Slide 51: Winning the competitive battles
Building strong brands Winning the competitive battles Premier Inn — Dynamic pricing to drive mid week and weekend revpar — Leverage Business Account — Advertising & Premier Offers promotions Restaurants — Sharper management focus — Customer service and value for money Costa — Product development -
Slide 52: Accelerating growth in 2011/12
Growing strong brands Accelerating growth in 2011/12 ¢ Premier Inn UK around 4,000 rooms — Plus committed pipeline 6,500 rooms beyond 2011/12 * 14 new restaurants * Costa — c.100 stores in the UK — c.200 stores internationally — 500 Costa Express machines EAT SLEEP & DRINK WHITBREAD
Slide 53: Five year growth milestones
5 year growth milestones 2) 50% UK growth to at least 65,000 etiam rooms Double global system sales to £1.3bn co 4 T A Double network to 3,500 stores Costa Express grows to 3,000 units EAT SLEEP & DRINK WHITBREAD
Slide 54: Premier Inn UK market
2 Premier Inn on ng - Premier Inn 35,000 rooms Premier Inn 43,000 rooms 678,000 rooms 679,000 rooms UK market 23% 24% Budget branded Other branded ™ Independent 2007 2010 EAT SLEEP & DRINK Source: OC&C model and analysis WH ITBREAD
Slide 55: Premier Inn 50% rooms growth
Pp] Growing Premier inn strong brands 50% rooms growth 65,000 679,000 705,000 rooms rooms 2010 2016 2010 2016 UK market rooms ™Budget Other Branded Independent EAT SLEEP & DRINK WHITBREAD
Slide 56: Premier Inn source of growth 2011-16
Premier Inn Growing strong brands Source of growth 2011 - 2016 (22,000 rooms) 43% New catchments 57% Existing catchments Source: OC&C model and analysis 28% Greater London 1% Northern Ireland 8% Scotland y 13% Northern England 13% Midlands & Wales 37% Southern England EAT SLEEP & DRINK WHITBREAD
Slide 57: Premier Inn shape of growth 2011-2016
» Premier Inn Shape of growth 2011 - 2016 15% Mini Solus or Joint site 60-80 rooms 17% Joint Site less than - 60 rooms 57% Large Solus 80+ rooms 11% Extensions 57 * Operating profits before interest and tax divided by net assets excluding debt, taxation liabilities and pension deficit Growing strong
Slide 58: Premier Inn International
Premier Inn Growing strong brands International Current 5 hotels making progress — Middle East occupancy up to 55% from 35% (2009/10) — Four hotels in committed pipeline Appointed new MD International Strategy being developed within “capital lite” framework Medium term growth opportunity EAT SLEEP &
Slide 59: Costa double global system sales
COSTA Growing strong brands Double global system sales £m 1400 £1.3bn 1200 + 1000 + all £659m ail £516m 200 + 2009/10 2010/11 2015/16 EAT SLEEP & DRINK @ International ™UK WHITBREAD
Slide 60: Costa store numbers
COSTA Growing strong brands No. of 3,500 3,500 stores 1,871 1,871 2010/11 2015/16 2010/11 2015/16 B® international @ Franchise EAT SLEEP & DRINK mee oe senity WHITBREAD
Slide 61: Driving returns
Driving returns * Good ROIC - average and incremental — WHR 12.3% — Costa 42.2%* * Improving incremental returns — Choice of Premier Inn format — Balance between hotels and restaurants and restaurant size — Focus on lower performing assets and adjusting for freehold/ leasehold investment EAT SLEEP &
Slide 62: Driving returns
Driving returns * Maintaining asset base — 2011 book value of £2.3bn° — 2009 £40m Sale & Leaseback achieved 60% uplift over book — Last independent valuation in 2007 at £3.7bn (book value £1.9bn’) * Remain predominantly freehold — Regular modest sale and leaseback programme — City locations mean mor
Slide 63: Financial policies
Financial policies « Leverage — Framework to remain <3.5 times EBITDA on a pension, lease adjusted basis * Dividend — Aim to grow broadly ‘in line’ with earnings over cycle — Rebalance Interim dividend to better reflect earnings to c.35% of the Full Year dividend EAT SLEEP & DRINK WHITBREAD
Slide 64: Current outlook
Current outlook * Growth in our like for like sales remains firmly positive, although at a lower level than that achieved in the fourth quarter of 2010/11 * Despite a more challenging consumer economy, we are confident that we will continue to outperform * Our emphasis is on giving customers value f
Slide 65: Substantial value creation
Substantial value creation —— ¢ Whitbread has demonstrated its strength during the recession with good returns on capital * We are already implementing our new 5 year growth milestones ¢ Growth will be financed from our own resources EAT SLEEP & DRINK WHITBREAD
Slide 66: Q&A
Slide 67: Costa City Presentation 18th May 2011
Costa Investor presentation 18th May 2011 City Presentation Centre 3.30pm WHITBREAD
Slide 68: Slide 68
Slide 69: Appendix
Appendix
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