Slide 1: FY21 Full Year Results
FY21 Full Year Results 27 April 2021
Slide 2: Contents
Contents Performance update Alison Brittain p3 Financial review Nicholas Cadbury p10 Driving long-term value Alison Brittain p17 2
Slide 3: Navigating COVID-19 and investing to drive long-term value
Navigating COVID-19 and investing to drive long-term value • Performance driven by the closure of our business and subsequent COVID restrictions for large parts of the year FY21 • Outperforming the UK hotel market and gaining market share • National footprint in Germany – now at 72 hotels (30 operat
Slide 4: UK: COVID-19 impact
UK: COVID-19 impact Resilient UK operational performance despite the impact of COVID-19 First Lockdown National Second Third lockdown restrictions restrictions lockdown lockdown starts eased introduced Premier Inn UK occupancy levels: (normal occupancy levels in the high 70%s) 58% 51% 52% 40% 35% 33
Slide 5: UK: Strong outperformance despite restrictions
UK: Strong outperformance despite restrictions Strong brand and direct distribution is driving material outperformance in the UK Outperformance vs. the M&E hotel market Benefitting from a higher level of competitors’ temporary closures PI outperformance1 5.2% 7.9% 8.4% 10.4% 10.5% 4.8% 5.2% Aug 20 S
Slide 6: UK: Potential sales recovery scenario
UK: Potential sales recovery scenario Premier Inn is well placed for the recovery phase Calendar year: Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Lockdown / Winter COVID leisure Restrictions? restrictions Leisure: overseas Leisure: staycation bounce holiday bounce? Leisure recov
Slide 7: UK: Long-term value creation
UK: Long-term value creation UK’s largest hotel chain…by a clear margin1 UK’s favourite hotel brand…by a clear margin 79k Number of rooms 44k 18k 9k Winner of YouGov best value hotel chain for the 10th year running Premier Inn Travelodge Holiday Inn Express Ibis Scale delivers efficiency and custome
Slide 8: Germany: A platform to outperform and take market share
Germany: A platform to outperform and take market share Challenging market with COVID restrictions throughout Capitalised on the opportunity to materially accelerate our the year… expansion; now at 72 hotels…2 25000 250 60% Germany total sales recovered: 2020/21 as % of 2019/20201 M&E 20k Rooms 19k
Slide 9: Clear strategy to create value
Clear strategy to create value Clear strategy to create value 1 2 3 GROW AND INNOVATE IN CORE FOCUS ON OUR STRENGTHS TO ENHANCE CAPABILITY TO UK MARKETS GROW IN GERMANY SUPPORT LONG-TERM GROWTH ✓ Ownership and operating model ✓ Replicate historic PI UK success ✓ Property-backed asset value is a comp
Slide 10: Financial Review | Nicholas Cadbury – CFO
FINANCIAL REVIEW | Nicholas Cadbury – CFO 10 10 10
Slide 11: Financial highlights
Financial highlights Performance reflects lockdown closures £m FY21 FY20 • Performance in FY21 reflects the significant COVID-19 restrictions in place for the vast Statutory revenue 589.4 2,071.5 majority of the year, both in the UK and Germany. Hotels and restaurants were closed for much of the fir
Slide 12: Protecting liquidity and strengthening financial position
Protecting liquidity and strengthening financial position FY21 ACTIONS TO REDUCE COSTS AND PRESERVE CASH STRONG TRACK RECORD OF MATERIAL COST SAVINGS New 3-year £100m efficiency programme • Discretionary P&L spend paused and capex reduced • Executive pay reductions, salaried staff pay freeze and div
Slide 13: Protecting cash
Protecting cash Cash outflow reflects COVID restrictions. UK hotels cashflow positive when leisure travel permitted August to October £m Working capital outflow driven by: • £71.2m net customer deposit outflow • £14.0m amount due re UK Government Job Retention Scheme • £15.5m reduction in VAT credit
Slide 14: Robust liquidity and a strong balance sheet
Robust liquidity and a strong balance sheet BALANCED DEBT MATURITY PROFILE PROPERTY: OPERATIONAL AND FINANCIAL FLEXIBILITY Debt maturity profile 1, 2, 3 Property backed balance sheet Freehold Leasehold Private Placement Undrawn RCF £m Public Bond (uncovenanted) Green Bond (uncovenanted) UK Open esta
Slide 15: FY22: Investing to win
FY22: Investing to win NEW CAPACITY: UK NEW CAPACITY: GERMANY • Gross new rooms (c.80% leasehold): • New rooms (c.75% leasehold): 3 3,795 1 c.2-3,000 2,906 3 c.2,000 2 710 693 FY20 FY21 FY22 FY20 FY21 FY22 • Average cost per room (In line with previous guidance (February 2019)): • Average cost per r
Slide 16: FY22: Guidance
FY22: Guidance UK (vs FY20) GERMANY (absolute) • Accommodation sales: Every 1% decline in RevPAR vs our pre-COVID expectation of • Sales: every 1% change in total sales vs FY20 has a c.£16.5m impact on profit before c.£60 will result in a £1m reduction in profit before tax tax (improved from £18.0m
Slide 17: Driving Long-Term Value | Alison Brittain – CEO
DRIVING LONG-TERM VALUE | Alison Brittain– CEO 17 17 17
Slide 18: Structurally and operationally advantaged
Structurally and operationally advantaged Whitbread is best-placed to capitalise on the recovery opportunity and reinforce our market leading position in the UK with a compelling opportunity to replicate Premier Inn’s UK success in Germany UK Germany UK Germany ENHANCED STRUCTURAL OPPORTUNITIES BEST
Slide 19: Structural opportunities enhanced by the impact of COVID-19
Structural opportunities enhanced by the impact of COVID-19 Long-term migration from independents to budget branded hotels in UK UK Market German Market 678k rooms 701k rooms 940k rooms 993k rooms 6% 11% Premier Inn 6% 9% 13% 17% Budget branded 14% Other branded 19% 24% Independents 24% 80% 72% 57%
Slide 20: Clear runway for growth in the UK and Germany at good returns
Clear runway for growth in the UK and Germany at good returns In the long-term there remains a clear runway of growth in rooms across the UK and Germany > 110k > 170k Total UK potential Total potential > 19k > 60k Additional potential Total German potential > 12k > 170k Total potential Committed pip
Slide 21: Budget model is higher growth and more resilient in downturns
Budget model is higher growth and more resilient in downturns Historic: Branded budget sector has grown faster than the rest of the market in every year since 2009 UK total booked room % annual growth1 12% Branded Budget Other branded and independents 8% 4% 0% -4% -8% -12% 2008 2009 2010 2011 2012 2
Slide 22: Budget model is higher growth and more resilient in downturns
Budget model is higher growth and more resilient in downturns Present: Midscale & Economy sector is materially outperforming the rest of the hotel market UK total sales recovered: 2020/21 as % of 2019/201 60% Midscale & Economy Rest of Market 50% 40% 30% 20% 10% 0% Aug 20 Sep 20 Oct 20 Nov 20 Dec 20
Slide 23: Broad customer reach
Broad customer reach Over-indexing in UK regions, Over-indexing in domestic Even split of leisure and Broad business mix is resilient that will recover faster than demand that will recover business customers London faster than international Regions vs London Domestic vs Inbound Leisure vs Business T
Slide 24: Premier Inn is the strongest hotel brand in the UK
Premier Inn is the strongest hotel brand in the UK Standout customer brand scores in the market 1 2 35 Metric Variance 1st to 2nd Hilton 2020 30 2019 Satisfaction 41.7 1st 18.7 2018 26.8 Premier… Impression 40.8 1st 11.1 25 Marriott PI - 2018-19 Improvement YOY Quality score Value 41.5 1st 15.0 in b
Slide 25: Investing to win: Marketing
Investing to win: Marketing Major new Premier Inn brand campaign launched – ‘Rest Easy’ • Major new brand campaign, “Rest Easy” featuring the voice of Sir Lenny Henry • Multichannel brand campaign across TV, Radio, Digital, Print and Social Reinforcing brand consideration when others are constrained
Slide 26: Investing to win: Extending direct reach through marketing
Investing to win: Extending direct reach through marketing TV MARKETING DIGITAL MARKETING IMPROVED WEBSITE Building demand Farming demand Converting demand • Drive front-of-mind consideration across all • Broadening digital reach • New PI.com website launched customers • Utilising the depth of our d
Slide 27: Investing to win: Enhanced business offering
Investing to win: Enhanced business offering REACHING NEW CUSTOMERS THROUGH BUSINESS ACCOUNTS RELAUNCHED “BUSINESS BOOKER” PORTAL TRAVEL MANAGEMENT COMPANIES • Improved credit management broadens availability • Enhanced user experience and look and feel, driving • Reaching new business customers pre
Slide 28: Investing to win: Reassuring guests
Investing to win: Reassuring guests REASSURING GUESTS - HYGIENE REASSURING GUESTS - FLEXIBILITY @premierinn 5 star service for refunding trips booked that are now not possible. You’ve got a customer for life x ✓ Social distancing signage and protocol ✓ Health screening and illness response procedure
Slide 29: Investing to win: Product investment and restaurant offering
Investing to win: Product investment and restaurant offering ENSURING OUR ESTATE REMAINS WELL INVESTED REOPENING RESTAURANTS WITH A STRONG OFFERING • c.£30m expected spend on refurbishments in FY22 • 65 restaurants open for outdoor service • Recommenced Premier Plus rollout. Target 2,000 rooms by en
Slide 30: Germany: Opportunity to replicate Premier Inn's UK success
Germany: Opportunity to replicate Premier Inn’s UK success [Ambition to be the no.1 budget hotel operator Material growth in the estate during lockdown March 2020 February 2021 A structurally attractive market Replicate our UK model with no clear market leader and over 70% independents Hamburg Hambu
Slide 31: Germany: Investing to win
Germany: Investing to win Enlarged estate provides platform to build national brand recognition FOCUS ON STRONG CUSTOMER OFFERING LEVERAGING COMMERCIAL INITIATIVES Leading customer scores • Improved visibility in digital search • Leveraging UK trading platform and pricing strategy • Increasing avail
Slide 32: A Force for Good: Operating responsibly and sustainably
A Force for Good: Operating responsibly and sustainably Being a Force for Good in all we do supports our vision of enabling people to live and work well TARGETS OPPORTUNITY COMMUNITY RESPONSIBILITY Meaningful No barriers to entry contributions to the Operating in a way 50% carbon Eliminate and no li
Slide 33: A Force for Good: Operating responsibly and sustainably
A Force for Good: Operating responsibly and sustainably Clear objectives and measurable targets to help us meet our goals KEY ACHIEVEMENTS No. 1 £18m 39% HOSPITALITY RAISED FOR GREAT REDUCTION IN APPRENTICESHIP ORMOND STREET HOSPITAL CARBON EMISSIONS IN PROVIDER CHILDREN’S CHARITY 3 YEARS 11 years 5
Slide 34: Driving long-term value
Driving long-term value Clear strategy to create value 1 2 3 GROW AND INNOVATE IN CORE FOCUS ON OUR STRENGTHS TO ENHANCE CAPABILITY TO UK MARKETS GROW IN GERMANY SUPPORT LONG-TERM GROWTH ✓ Ownership and operating model ✓ Replicate historic PI UK success ✓ Property-backed asset value is a competitive
Slide 35: Appendices
APPENDICES I Definitions p36 II Supplementary information p37 III Cautionary statement p38 Whitbread ADR programme – WTDBY Whitbread has established a sponsored Level I American Depositary Receipt (ADR) programme for which Deutsche Bank perform the role of depositary bank. The Level I programme trad
Slide 36: Appendix I | Definitions
Appendix I | Definitions Accommodation sales Premier Inn accommodation revenue excluding non-room income such as food and beverage Adjusted basic EPS Adjusted profit attributable to the parent shareholders divided by the basic weighted average number of ordinary shares Adjusted EBITDA Profit before
Slide 37: Appendix II | Supplementary information
Appendix II | 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. Hotel and restaurant estate B. Financial summary, KP
Slide 38: Appendix III | Cautionary statement
Appendix III | 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 Services and Markets Act 2000. In making this pr