Slide 1: FY24 Interim Results
This document has been labelled as Non-Confidential FY24 INTERIM RESULTS BERLIN ALEXANDERPLATZ 18 OCTOBER 2023
Slide 2: Contents
This document has been marked as Non-Confidential CONTENTS H1 FY24 PERFORMANCE AND OUTLOOK Dominic Paul FINANCIAL REVIEW AND CAPITAL ALLOCATION Hemant Patel DELIVERING LONG-TERM GROWTH AND RETURNS Dominic Paul 2
Slide 3: H1 FY24 Performance and Outlook
This document has been marked as Non-Confidential CARDIFF CENTRAL H1 FY24 PERFORMANCE AND OUTLOOK DOMINIC PAUL І CEO
Slide 4: Overview: Unique business model underpins market leading position
This document has been marked as Non-Confidential OVERVIEW І UNIQUE BUSINESS MODEL UNDERPINS MARKET LEADING POSITION VERTICALLY-INTEGRATED OPERATING MODEL NO.1 HOTEL BRAND IN THE UK UK LOW-COST DISTRIBUTION 91,000 ROOMS OPEN AND COMMITTED COMMERCIAL AND OPERATIONAL 125,000 ROOM POTENTIAL CONTROL GER
Slide 5: Overview: Clear strategy to drive long-term returns
This document has been marked as Non-Confidential OVERVIEW І CLEAR STRATEGY TO DRIVE LONG-TERM RETURNS ENHANCE OUR FOCUS ON OUR GROW AND INNOVATE CAPABILITIES TO STRENGTHS TO GROW IN THE UK SUPPORT IN GERMANY LONG TERM GROWTH FORCE FOR GOOD DRIVING LONG-TERM SHAREHOLDER RETURNS 5
Slide 6: H1 FY24: Delivering outstanding results
This document has been marked as Non-Confidential H1 FY24 І DELIVERING OUTSTANDING RESULTS REVENUE & PROFIT MARGINS & ROCE CASHFLOW & RETURNS REVENUE UK PRE-TAX MARGINS OPERATING CASHFLOW £1.6bn +17% 27.5% +3.1pp £483m +£73m H1 FY24 VS H1 FY23 H1 FY24 VS H1 FY23 H1 FY24 VS H1 FY23 PROFIT BEFORE TAX
Slide 7: Outlook: Supply backdrop underpins continued momentum
This document has been marked as Non-Confidential OUTLOOK | SUPPLY BACKDROP UNDERPINS CONTINUED MOMENTUM UK GERMANY DUBLIN CASTLEFORBES MUNICH CITY ZENTRUM CONSTRAINED ACCELERATED LONG-TERM INDUSTRY FRAGMENTED NO CLEAR LONG-TERM INDEPENDENT STRUCTURAL SUPPLY MARKET MARKET LEADER AMBITION DECLINE OPP
Slide 8: Financial Review and Capital Allocation
This document has been marked as Non-Confidential BERLIN ALEXANDERPLATZ FINANCIAL REVIEW AND CAPITAL ALLOCATION HEMANT PATEL І CFO
Slide 9: Financials: Group results at a glance
This document has been marked as Non-Confidential FINANCIALS | GROUP RESULTS AT A GLANCE H1 H1 vs H1 • Revenue up 17% driven by: £m FY24 FY23 FY23 • UK accommodation sales Statutory revenue • continued progress in Germany (1,574) 1,350 17% • Increased operating costs due to Operating costs (949) ((8
Slide 10: Financials: UK highlights
This document has been marked as Non-Confidential FINANCIALS | UK HIGHLIGHTS H1 H1 vs H1 • Revenue growth led by ARR +14% £m FY24 FY23 FY23 Statutory revenue (1,479) 1,298) 14% • Operating leverage driving increased Other income (excl. rental income) 0) 0) 0% EBITDAR Operating costs (852) (771) (11)
Slide 11: UK: Accommodation sales well ahead of FY23 and FY20
This document has been marked as Non-Confidential UK | ACCOMMODATION SALES WELL AHEAD OF FY23 AND FY20 UK ACCOMMODATION SALES UK REVPAR vs +55% +56% +55% vs +40% +42% +42% FY20 FY20 vs +18% vs FY23 +15% FY23 +16% +13% +14% +12% Q1 FY24 Q2 FY24 H1 FY24 Q1 FY24 Q2 FY24 H1 FY24 UK OCCUPANCY UK ARR vs +
Slide 12: UK: Sustained market outperformance
This document has been marked as Non-Confidential UK | SUSTAINED MARKET OUTPERFORMANCE Premier Inn UK performance vs the M&E market +£7.20 +£6.73 +£6.27 PI RevPAR premium1 vs M&E +£2.28 H1 FY20 2 Q1 FY24 Q2 FY24 H1 FY24 PI Occupancy performance1 vs (0.4)pp (0.8)pp (0.6)pp M&E PI ARR performance1 vs
Slide 13: Financials: Germany highlights
This document has been marked as Non-Confidential FINANCIALS | GERMANY HIGHLIGHTS H1 H1 vs H1 Established sites growing towards maturity £m FY24 FY23 FY23 PBT moving annual total 1 Statutory revenue (95) 52) 81% £6m Other income (excl. rental income) 3) 0) 100% Operating costs (75) (51) (47)% Adjust
Slide 14: Germany: Performance led by established hotels
This document has been marked as Non-Confidential GERMANY | PERFORMANCE LED BY ESTABLISHED HOTELS RevPAR € €61 €61 €60 €60 €59 €58 €55 €53 €51 • Cohort of established hotels continue to perform in line with the market • Market softness in Q2 led by normalisation of leisure demand • Continue to learn
Slide 15: Financials: Cash flow funding continued investment and returns
This document has been marked as Non-Confidential FINANCIALS | CASH FLOW IS FUNDING CONTINUED INVESTMENT AND RETURNS £483m £410m £8m £260m £(213)m £(18)m £(99)m £122m non-expansionary £91m expansionary £(265)m £(104)m Cashflow H1 FY23 H1 FY24 H1 FY24 pre- Share Operating Operating Capex Disposals Ot
Slide 16: Financials: Strong balance sheet underpins future growth
This document has been marked as Non-Confidential FINANCIALS | STRONG BALANCE SHEET UNDERPINS FUTURE GROWTH FREEHOLD BACKED INVESTMENT GRADE (BBB) Freehold Leasehold UK THRESHOLD: 3.5x Open 57% 43% Open and committed 55% 45% 3.0x 2.8x 2.6x 2.5x 2.5x Germany Open 22% 78% 2.0x 1.5x Open and committed
Slide 17: Capital allocation: Increased dividend and further share buy-back
This document has been marked as Non-Confidential CAPITAL ALLOCATION | INCREASED DIVIDEND AND FURTHER SHARE BUY-BACK MAINTAIN INVESTMENT Upgraded investment grade rating to BBB1 GRADE METRICS CONTINUE TO INVEST Increased gross capex guidance to £500m - £550m, THROUGH THE CYCLE expected disposal proc
Slide 18: Outlook and guidance: Momentum continues into H2 FY24
This document has been marked as Non-Confidential OUTLOOK AND GUIDANCE | MOMENTUM CONTINUES INTO H2 FY24 1 CURRENT TRADING AND OUTLOOK FY24 GUIDANCE UK • UK accommodation sales and F&B drop through – No change • UK accommodation sales +13% vs FY23 • Inflation - No change • RevPAR premium vs M&E – £6
Slide 19: Delivering Long-Term Growth and Returns
This document has been marked as Non-Confidential DUBLIN CITY CENTRE (THE LIBERTIES) DELIVERING LONG-TERM GROWTH AND RETURNS DOMINIC PAUL І CEO
Slide 20: Context: Focused hotel group driving growth and attractive returns
This document has been marked as Non-Confidential CONTEXT | FOCUSED HOTEL GROUP DRIVING GROWTH AND ATTRACTIVE RETURNS +20,000 ROOMS SINCE FY18 WHILST GROWING RETURNS TOTAL ESTATE ROOMS PREMIER INN UK ROCE 96,000 93,000 88,000 14.9% 84,000 80,000 12.8% 12.9% 77,000 73,000 2 FY18 FY19 FY20 FY21 FY22 F
Slide 21: Context: Our model and strategy deliver strong cash flow
This document has been marked as Non-Confidential CONTEXT | OUR MODEL AND STRATEGY DELIVER STRONG CASH FLOW VERTICALLY-INTEGRATED OPERATING MODEL POSITIVE CASH FLOW ADJUSTED OPERATING CASHFLOW LOW-COST DISTRIBUTION H1 FY23 MAT £654m COMMERCIAL AND OPERATIONAL CONTROL FY23 £719m ASSET-BACKED BALANCE
Slide 22: UK: Drive returns and extend our market leading position
This document has been marked as Non-Confidential CARDIFF NORTH UK | DRIVE RETURNS AND EXTEND OUR MARKET LEADING POSITION GERMANY | REPLICATE OUR UK MODEL FORCE FOR GOOD | DRIVING CHANGE
Slide 23: UK: Continuing to invest in our quality and value proposition
This document has been marked as Non-Confidential UK | CONTINUING TO INVEST IN OUR QUALITY AND VALUE PROPOSITION NETWORK & SCALE BRAND STRENGTH 1 +50% 35 125,000 Hilton Premier Inn rooms 30 c.91,000 rooms c.84,000 25 Marriott rooms 20 Quality 15 Crowne Plaza 10 Best Western Holiday Inn Airbnb 5 Holi
Slide 24: UK: Strong demand with well-balanced customer mix
This document has been marked as Non-Confidential UK | STRONG DEMAND WITH WELL-BALANCED CUSTOMER MIX ROOM NIGHTS SOLD BUSINESS vs LEISURE +9% 50% Premier Inn Leisure FY23 1 Premier Inn Business FY23 50% 15.2m 13.9m 39% Market Leisure 2022 UK2 MARKET Market Business 2022 H1 FY20 H1 FY24 61% Premier I
Slide 25: UK: Total supply expected to remain below 2019 for next five years
This document has been marked as Non-Confidential UK | TOTAL SUPPLY EXPECTED TO REMAIN BELOW 2019 FOR THE NEXT FIVE YEARS STRUCTURAL GROWTH OPPORTUNITY REMAINS FAVOURABLE SUPPLY ENVIRONMENT TO CONTINUE 1 Total hotel supply ‘000 rooms ‘000 rooms 1 700k 715k 686k 715 9% 11% 12% 15% 17% 19% 696 691 690
Slide 26: UK: Taking advantage of the structural growth opportunity
This document has been marked as Non-Confidential UK | TAKING ADVANTAGE OF THE STRUCTURAL GROWTH OPPORTUNITY PROPERTY FLEXIBILITY ALLOWS STRONG BALANCE SHEET MARKET ACCESS AND VALUE CREATION FUNDS FREEHOLD PURCHASES FENCHURCH ST, LONDON USHERS QUAY, DUBLIN FREEHOLD FREEHOLD OFFICE CONVERSION EXISTIN
Slide 27: UK: Integrating marketing into our trading engine to drive RevPAR
This document has been marked as Non-Confidential UK | INTEGRATING MARKETING INTO OUR TRADING ENGINE TO DRIVE REVPAR BRAND STRENGTH DRIVES 1 CONFIDENCE IN DEMAND ALLOWING SHIFT 1 DIRECT DISTRIBUTION IN AVERAGE ROOM RATES GOOGLE SEARCH INDEX1 % of rooms sold by price bucket 14% H1 FY23 H1 FY24 12% 10
Slide 28: UK: Driving our business proposition
This document has been marked as Non-Confidential UK | DRIVING OUR BUSINESS PROPOSITION ENHANCED BUSINESS PRODUCTS BROADENING OUR ADDRESSABLE PROVING POPULAR CUSTOMER BASE Travel Management Companies Business Booker £1,084m 1 Offering flexibility Premier Inn website, app and other +15% and rewarding
Slide 29: UK: Maintaining market position at high occupancy levels
This document has been marked as Non-Confidential UK | MAINTAINING OUR MARKET POSITION WHILST AT HIGH OCCUPANCY LEVELS Occupancy Satisfaction 100% 100% OPERATIONAL CONTROL 87.1% 85.5% 86.0% 82.6% 82.8% 90% 80% 75.9% 80% INVESTING IN OUR TEAMS 60% 70% 40% 60% REPAIRS AND MAINTENANCE 20% 50% 0% 40% 86
Slide 30: UK: Improved F&B performance in challenging market
This document has been marked as Non-Confidential UK | IMPROVED F&B PERFORMANCE IN CHALLENGING MARKET INTEGRATED F&B BRANDED RESTAURANTS • High hotel occupancy driving higher breakfast sales Total sales recovered to pre-pandemic levels • New integrated ground floor promoting drinks sales • Menu opti
Slide 31: UK: Extending our competitive edge whilst reducing costs
This document has been marked as Non-Confidential UK | EXTENDING OUR COMPETITIVE EDGE WHILST REDUCING COSTS • Reservation system upgrade well-advanced TECHNOLOGY PLATFORM FOR THE FUTURE • Network upgrades across the next 18 – 24 months • Future revenue potential and cost efficiencies • Upgraded stan
Slide 32: Germany: Replicate our UK model
This document has been marked as Non-Confidential CARDIFF NORTH UK | DRIVE RETURNS AND EXTEND OUR MARKET LEADING POSITION GERMANY | REPLICATE OUR UK MODEL FORCE FOR GOOD | DRIVING CHANGE
Slide 33: Germany: Investment case remains highly attractive
This document has been marked as Non-Confidential GERMANY | INVESTMENT CASE REMAINS HIGHLY ATTRACTIVE LARGE AND FRAGMENTED MARKET MODEL CREATES OPPORTUNITY WELL-BALANCED GUEST MIX • Hotel market is 40% larger than the UK • Structural advantage for owner-operators • Large short-stay domestic travel m
Slide 34: Germany: Fastest growing hotel brand in Germany
This document has been marked as Non-Confidential GERMANY | FASTEST GROWING HOTEL BRAND IN GERMANY ESTABLISHING A NATIONAL NETWORK +10,000 ROOMS OVER THE LAST FOUR YEARS Open hotels: 57 Pipeline hotels: 32 22,000 18,000 17,000 16,000 10,251 9,042 5,875 4,880 1,085 425 H1 H1 FY19 FY20 FY21 FY22 FY23
Slide 35: Germany: Pathway to profitability
This document has been marked as Non-Confidential GERMANY | PATHWAY TO PROFITABILITY COMMERCIAL STRATEGY OPERATING MODEL ENHANCE B2B • Replicate UK trading strategy and • Broaden product offer by trialling • Create single Business platform events pricing Premier Plus “InnBusiness” • Targeted brand m
Slide 36: Force for Good: Driving change
This document has been marked as Non-Confidential CARDIFF NORTH UK | DRIVE RETURNS AND EXTEND OUR MARKET LEADING POSITION GERMANY | REPLICATE OUR UK MODEL FORCE FOR GOOD | DRIVING CHANGE
Slide 37: Force for Good: Programme overview and key targets
This document has been marked as Non-Confidential FORCE FOR GOOD | PROGRAMME OVERVIEW AND KEY TARGETS COMMUNITY Opportunity Community Responsibility We want all of our team Making a meaningful Always operating in a way that members to reach their contribution to the customers respects people and the
Slide 38: Force for Good: Strategy in action
This document has been marked as Non-Confidential FORCE FOR GOOD | STRATEGY IN ACTION Supporting Hereward College students SWINDON with hospitality qualifications Two students graduated in June from the mini Premier Inn at Hereward College for young people with complex disabilities and are now emplo
Slide 39: Outstanding H1 results; confident in the outlook
This document has been marked as Non-Confidential PADDINGTON OUTSTANDING H1 RESULTS STRUCTURAL SHIFT IN HOTEL SUPPLY SIGNIFICANT GROWTH OPPORTUNITIES CONFIDENT IN THE OUTLOOK INCREASED DIVIDEND & FURTHER SHARE BUY-BACK
Slide 40: Appendices
This document has been marked as Non-Confidential APPENDICES I Additional slides p41 IV Definitions p44 V Supplementary information p45 VI Cautionary statement p46 Whitbread ADR programme – WTDBY Whitbread has established a sponsored Level I American Depositary Receipt (ADR) programme for which JP M
Slide 41: Appendix I: Customer mix
This document has been marked as Non-Confidential APPENDIX I | CUSTOMER MIX Premier Inn Leisure BUSINESS vs LEISURE Market Leisure Premier Inn Business Market Business 39% UK 50% 50% MARKET 1 61% Premier Inn Domestic INBOUND vs DOMESTIC Market Domestic Premier Inn Regions LONDON vs REGIONS Market Re
Slide 42: Appendix II: Premier Inn UK proven resilience in previous downturns
This document has been marked as Non-Confidential APPENDIX II | PREMIER INN UK: PROVEN RESILIENCE IN PREVIOUS DOWNTURNS M&E SECTOR OUTPERFORMS OPERATING MODEL LED TO OUTPERFORMANCE OF THE M&E MARKET 90% £70 81% • M&E sector tends to outperform the 80% 78% 78% 76% 76% 76% 78% £60 73% wider hotel mark
Slide 43: Appendix III: UK ROCE
This document has been marked as Non-Confidential APPENDIX III | UK ROCE COVID-19 Premier Inn UK ROCE pandemic 14.9% 13.3% 13.5% 12.9% 13.0% 13.4% 13.3% 12.9% 12.3% 12.4% 12.4% 10.9% 11.2% 2.3% 82k 84k 84k 79k 79k 76k 72k 68k 65k 59k 55k 52k 47k 42k 43k (14.4)% FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY1
Slide 44: Appendix IV: Definitions
This document has been marked as Non-Confidential APPENDIX IV | DEFINITIONS Accommodation sales Premier Inn accommodation revenue excluding non-room income such as food and beverage Profit before adjusting items, interest, tax, depreciation of property, plant and equipment and right-of-use assets, a
Slide 45: Appendix V: Supplementary information
This document has been marked as Non-Confidential APPENDIX V | SUPPLEMENTARY INFORMATION Further information is available in a supporting supplementary information pack (in Microsoft Excel format) from www.whitbread.co.uk/investors/results-reports-and-presentations. This information includes: A. Hot
Slide 46: Appendix VI: Cautionary statement
This document has been marked as Non-Confidential APPENDIX VI | 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