Slide 1: Whitbread PLC Results presentation 2006/07
Whitbread PLC Results presentation 2006/07
Slide 2: Anthony Habgood, Chairman
Whitbread Welcome with a smile Anthony Habgood
Slide 3: Christopher Rogers, Finance Director
Christopher Rogers Finance Director
Slide 4: Summary
Summary 2006/07 2005/06 % change PBT from continuing £213.0m £171.1m 24.5% operations, pre exceptionals EPS pre exceptionals 66.3p 56.7p 17.0% Proposed final dividend 22.15p 19.95p 11.0% Interim dividend 8.10p 7.35p 10.2% Total dividend for year 30.25p 27.30p 10.8%
Slide 5: Summary – profit & loss
Summary – profit & loss £m 2006/07 2005/06 % change Revenue from 1,410.8 1,491.9 (5.4)% continuing operations Profit from operations 272.7 259.3 5.2% Central costs and other (21.6) (25.4) 15.0% Interest (38.1) (62.8) 39.3% PBT from continuing 213.0 171.1 24.5% operations, pre exceptionals
Slide 6: Summary – profit & loss continued
Summary – profit & loss continued £m 2006/07 2005/06 % change PBT from continuing 213.0 171.1 24.5% operations, pre exceptionals Taxation (68.8) (57.0) Net profit from continuing 144.2 114.1 26.4% operations Discontinued operations 6.9 36.0 Exceptionals 130.4 114.3 Profit for the year 281.5 264.4 6.
Slide 7: Treatment of businesses within segmental analysis
Treatment of businesses within segmental analysis • Premier Travel Inn/Restaurants • Re-classification of adjacency fee and breakfast income from Premier Travel Inn to Restaurants (detail in appendix) • Restaurants • Trading results of the disposed estate, for 21 weeks through to July 28th, are trea
Slide 8: Revenue by business segment
Revenue by business segment £m 2006/07 2005/06 % change Premier Travel Inn 458.5 392.9* 16.7% David Lloyd Leisure 237.3 224.6 5.7% Restaurants: retained 436.4 424.5* 2.8% Costa 175.1 143.0 22.4% Less: inter-segment (2.8) (2.7) (3.7)% Sales from continuing Whitbread 1,304.5 1,182.3 10.3% Restaurants:
Slide 9: Like-for-like sales
Like-for-like sales % 2006/07 2005/06 Premier Travel Inn 8.2 7.1 David Lloyd Leisure 2.7 (0.6) Restaurants 0.9 (1.6) Costa 6.6 3.3 Total 4.3 0.7
Slide 10: Profit by business segment
Profit by business segment £m 2006/07 2005/06 % change Premier Travel Inn 156.2 129.8* 20.3% David Lloyd Leisure 46.4 41.3 12.3% Restaurants 52.3 74.9* (30.2)% Costa 18.1 13.3 36.1% Less: Costa Minorities (0.3) - Profits from operations 272.7 259.3 5.2% * After restatement for adjacency fee and brea
Slide 11: Summary – profit & loss continued
Summary – profit & loss continued £m 2006/07 2005/06 % change Revenue from continuing 1,410.8 1,491.9 (5.4)% operations Profit from operations 272.7 259.3 5.2% Central costs and other (21.6) (25.4) 15.0% Interest (38.1) (62.8) 39.3% PBT from continuing 213.0 171.1 24.5% operations, pre exceptionals
Slide 12: Interest charge
Interest charge £m 2006/07 2005/06 Interest on borrowings (41.0) (57.5) Non cash interest: Pension interest charge (0.5) (7.0) Other 1.4 0.5 Total interest charge (40.1) (64.0) Interest receivable 2.0 1.2 Net interest charge (38.1) (62.8)
Slide 13: Discontinued
Discontinued* £m 2006/07 2005/06 Revenue 113.5 200.3 Pre-exceptional profit 8.0 39.3 Interest 0.7 (0.7) Tax (1.8) (2.6) Profit after tax 6.9 36.0 * Discontinued comprises T.G.I.Friday’s, sundry Marriott properties and Highfield Nursing Homes
Slide 14: Exceptional items
Exceptional items £m 2006/07 Profit on disposal of businesses Restaurants 196.6 Marriott Hotels (20.3) Pizza Hut 68.8 Exceptional cost items: Reorganisation costs (21.4) Impairment (12.6) Other 2.0 Tax on exceptionals (82.7) Total net exceptional profit 130.4
Slide 15: Cash flow
Cash flow Group year-on-year by items £m 2006/07 2005/06 Cash generated from operations 398 335 Cash capital expenditure (243) (230) Disposal of fixed assets 488 12 Interest, tax and dividends paid (121) (196) Interest and dividends received 3 84 Business cashflows 525 5 Additional pension payments
Slide 16: Capital expenditure
Capital expenditure £m 2006/07 2005/06 Premier Travel Inn 120 65 Restaurants 58 54 Costa 23 21 David Lloyd Leisure 27 43 Corporate 5 7 Discontinued 10 40 Total 243 230
Slide 17: Cost reduction update
Cost reduction update • Cost savings communicated in October 2005 now delivered as evidenced by: • Central costs reduced by £3.8m (15.0%) year on year from £25.4m to £21.6m • Group administration expenses reduced by £25.7m (17.7%) • Following disposal of 239 sites to Mitchells & Butlers central cost
Slide 18: Other financial items
Other financial items • Pension deficit decreases from £338m (£236m net of tax) to £196m (£137m net of tax) benefiting from £100m cash injections during the year • £140m of further payments due to pension fund of which £50m 2007/08 and £50m 2008/09 • Effective tax rate on profit from continuing oper
Slide 19: Balance sheet review
Balance sheet review Review of forward structure • All options considered • Leverage to be increased by about one EBITDAR turn c.£400m from under 4x to under 5x • Appropriate method of financing by issuing bonds secured on hotels and restaurants • To be put in place over first half of financial year
Slide 20: Balance sheet review
Balance sheet review Review of forward structure • Rationale for approach • Ambitious growth and investment plans for the Group • Need to maintain control over property assets ! Continued extension and re-configuring of large part of the estate • Recognises further value to be added from continued o
Slide 21: Balance sheet review: property revaluation
Balance sheet review Property revaluation • One-off revaluation to support future financial structure • Last formal revaluation 1999 • Instructed Gerald Eve to undertake a review of hotel and restaurant assets • Valuation of hotel and restaurant assets on a portfolio basis is £3.6bn vs £1.5bn in the
Slide 22: Summary
Summary • Sales from Continuing Whitbread up 10.3% • Like-for-like sales up by 4.3% • PBT from continuing operations, pre exceptionals up 24.5% to £213.0m • Total EPS up 17.0% to 66.3p • Final dividend up 11% to 22.15p giving a full year dividend of 30.25p – up 10.8% • Further leverage following rev
Slide 23: Alan Parker, Chief Executive
Whitbread Welcome with a smile Alan Parker
Slide 24: A determined and disciplined approach to growth
A determined and disciplined approach to growth Two-year like-for-like sales Premier Travel Inn Costa Continuing Whitbread David Lloyd Leisure Restaurants 2006 2007 • Investing for growth in Premier Travel Inn and Costa • Turn around Restaurants and David Lloyd Leisure * Restaurants Q1 2006/07 like-
Slide 25: Premier Travel Inn
Premier Travel Inn Results 2006/07 £m 2006/07 2005/06* % change Revenue 458.5 392.9 16.7% Profit 156.2 129.8 20.3% • Revenues and profits continue to strengthen • Like-for-like sales increased by 8.2% • Like-for-like occupancy 79.5% • 2,500 rooms opened in 2006/07 • Margins improved by 1.1% points *
Slide 26: Premier Travel Inn: Guest obsession
Premier Travel Inn Guest obsession • Good Night Guarantee • Money back guarantee • Continuously seeking feedback from guests • Guest Satisfaction Survey launched – 400,000 responses received • Over 90% of guests likely to return to a Premier Travel Inn • High room standards maintained for competitiv
Slide 27: Premier Travel Inn: Guest obsession
Premier Travel Inn Guest obsession
Slide 28: Premier Travel Inn: Managing for efficiency
Premier Travel Inn Managing for efficiency • Business Account Card • Sales +£75m, up 49% year on year • New automated reservation management • Maximises cross-sell and last room availability • 50% of total reservations now made online
Slide 29: Premier Travel Inn: Investing for growth
Premier Travel Inn Investing for growth Room numbers 45,000 32,603
Slide 30: Premier Travel Inn: International expansion
Premier Travel Inn International expansion • Joint venture with Emirates in Dubai • Costa international partnership extended to Premier Travel Inn • Five sites identified in Gulf region • First site now being built for completion first half of 2008 • Target of 5,000 rooms in the Gulf • Evaluating op
Slide 31: Restaurants
Restaurants Results 2006/07 £m 2006/07 2005/06* % change Revenue 518.9 619.9 (16.3)% Profit 52.3 74.9 (30.2)% Like-for-like sales 0.9% • Return to sales growth in the like for like estate • Improved like-for-like trend in the second half of 2.7%, business is gathering momentum • Accelerated investme
Slide 32: Restaurants: Investing for growth
Restaurants Investing for growth • Beefeater – completed the remodelling programme • Clear refreshed proposition around ‘great grilled food’ • Advertising to be increased • First new Beefeater for six years to open • Brewers Fayre – first phase of remodelling underway • Piloted concept of ‘informal
Slide 33: Restaurants: Guest obsession
Restaurants Guest obsession • Improving the guest experience • Investment in training of front-of-house staff • Continued menu development • Higher specification ingredients • Broader offering increasing the opportunity to trade up • Every day affordability • Maximising the Premier Travel Inn guest
Slide 34: Restaurants: Managing for efficiency
Restaurants Managing for efficiency • Significant reduction in discounting across the estate • Marketing spend redirected into advertising • Focus on margins • Tighter cash controls in place • Reduction in product wastage • Better stock management • Improved management of labour • More astute labour
Slide 35: Co-located model – a winning combination
Co-located model – a winning combination • Restaurant sales + 20% • Restaurant profit + 50% Restaurant performance joint site vs solus • Restaurant ROCE + 40%
Slide 36: Old style Beefeater
amaingly tend, succulent steaks al
Slide 37: Restaurants - Monkey Puzzle
Restaurants - Monkey Puzzle 100th Beefeater remodelled
Slide 38: David Lloyd Leisure
David Lloyd Leisure Results 2006/07 £m 2006/07 2005/06 % change Revenue 237.3 224.6 5.7% Profit 46.4 41.3 12.3% • More consistent pricing • Improved revenues from ancillary sales • Increased membership - stable in like-for-like clubs • Continental clubs performing well • First full year of new manag
Slide 39: David Lloyd Leisure: Guest obsession
David Lloyd Leisure Guest obsession • Brand standards established - expertise and service • New member induction/ re-engagement programme • Stronger focus on the F&B offering • Significant improvement of club estate and equipment • Customer groups identified with greater retention potential
Slide 40: David Lloyd Leisure: Managing for efficiency
David Lloyd Leisure Managing for efficiency • Better club management teams in place • Energy consumption savings • Further productivity gains • Maximise revenue per member • Personal training • Summer camps • Swimming • Tennis coaching • Partnerships to maximise off-peak periods
Slide 41: David Lloyd Leisure: Investment for growth
David Lloyd Leisure Investment for growth • Investment in technology • New membership system • Increased communication with our members • Improved management systems • New openings • Swindon - summer 2007 • 3 future sites secured • Exeter • Peterborough • Bristol
Slide 42: Costa
Costa Results 2006/07 £m 2006/07 2005/06 % change Revenue 175.1 143.0 22.4% Profit 18.1 13.3 36.1% • Total revenue up 22.4% to £175.1m • Total UK equity like-for-like sales up 6.6% • Number of stores opened - 199 • 72 international, 127 UK • Total stores - 707, + 29% • 175 international, 532 UK • Fa
Slide 43: Costa: Guest obsession
Costa Guest obsession • Further innovation in food • Point of differentiation • Roast our own coffee beans • Hand made by qualified baristas in retail estate • Costa stored value card – driving loyalty
Slide 44: New style Costa
New style Costa
Slide 45: Costa: Investing for growth
Costa Investing for growth • Target of 800 UK stores by 2010 • Exploring new UK markets • Expansion in existing UK markets • Maximise opportunities in London • Brand building • Costa Book Awards • 66% of customers said they would strongly recommend the brand to friends and family
Slide 46: Costa: International expansion
Costa International expansion EXISTING NEW FOR 2006/07 • UAE 36 • Poland 1 • Kuwait 17 • Romania 1 • Bahrain 25 • Bulgaria 1 • Oman 7 • Syria 3 • Qatar 10 • Lebanon 2 • Saudi 11 • Jordan 1 • Egypt 15 • China 5 • Cyprus 3 • Pakistan 3 TO COME 2007/08 • India 18 • The Balkans • Greece Dubai • Ireland
Slide 47: Improving shareholder value since 2004
Improving shareholder value since 2004 • Doubling - Premier Travel Inn and Costa • Turning around - Restaurants and David Lloyd Leisure • ‘No sacred cows’ - £2bn disposals • Cash to shareholders - £1.2bn returned • Pension deficit - £200m of additional payments
Slide 48: Conclusion
Conclusion • Expect strong momentum in the businesses to continue • Own brands only • Premier Travel Inn and Costa - UK market leaders with international growth opportunities • More efficient capital structure • Looking forward to another year of strong progress
Slide 49: Whitbread PLC Results presentation 2006/07
Whitbread PLC Results presentation 2006/07