Slide 1: Costa - the Nations favourite coffee shop
— Costa - the Nations favourite coffee shop - = I} ; Canaccord 2... ax” .- a g Conference 28 January 2016 WHITBREAD
Slide 2: Disclaimer
Disclaimer This presentation (the “Presertatior”) is provided on a strictly Private and corfidertial basis for information purposes orky By attending or readre this Presentation, you will be deemed to have agreedto the cbligatiors and restrictions set out bel owe Without the expres prior written cor
Slide 3: Chris Rogers, Managing Director, Costa Coffee
Chris Rogers Managing Director Costa Coffee
Slide 4: Costa - A remarkable story
Costa - A remarkable story * Founded in 1971 by * Ablend made from only 1% of Bruno and Sergio Costa the world’s beans | * Built on the unique Mocha Italia blend * Served today through c.10,000 oints of distribution * Roasted in our own roastery in Lambeth " » UK market leader and Britain’s best lov
Slide 5: Fifteen years of non-stop growth
Fifteen years of non-stop growth » » 4 \ ° Costa stores : : Costa reported:sales and profit £m ws) 0, 951.9 - Acquire Coffee Nation, y 4 : 6 year CAGR launch Costa Express 3.000 y f stores 2763 Enter Acquired by 3 § 2,000 WHITBREAD elt f stores 39 stores 6 year CAGR 34% 1st international store | ‘f
Slide 6: We have ambitious plans for Costa
We have ambitious plans for Costa c.2,000 | | 1,399 c.1,300 | I q | | a | 659 | 1 | | | | ] | | | : | ] | ea | | = la ‘ ~‘ co 2 = fa ay \ E . Set 2016 Milestone Set 2018 Milestone Set 2020 Milestone f Achievaliia sep of £1,300m of c.£2,000m of c.£2,500m c. one thir * Calendar years
Slide 7: The drivers of success
SEAACNARAAC WME SSA The drivers of.success Operational excellence Meeting customers’ needs WHITBREAD
Slide 8: Social and economic trends benefiting coffee shops
NANO WME SSA ~~ Social and.economic trends benefiting coffee shops <t Shopping ‘A —_ E GEA High street Increasing irene Rise of replacing : consumer Fragmented : z leisure mix female Bees : mobile traditional high A ; sophistication society A increasing spending power working streets in coffee Coffe
Slide 9: Growth underpinned by market tailwinds
Growth underpinned by market “tailwinc Weekly UK branded chain a illions esp’ e serv P = : 27.9 11% r & La 14-6 8.6 v 2008 _F2014 F2020 Allegra forecast LARSON z Sources: “Allegra World Coffee Portal Industry Research and Analysis, 2015” yy HM Lk
Slide 10: UK retail - Winning in a growing market
a | Se sn IH || UK retail - Winning ina growing market Total market UK coffee shop market, number of outlets” 2008 to 2018 27,422 CAGR CAGR Mth 4.5% 10,685 4,086 cae Li CAGR 11,843 9.1% 5,136 7,017 1,463 2008 2014 2020F 2014-2020 Non specialists Independents @ Brandedichains Finland Norway Sweden Ge
Slide 11: Costa - A relentless focus on customer needs
a 8 8 il SF Costa - A relentless focus on customer needs UK customer hierarchy of needs Thinking about your last visit, how important was each of the following features of the coffee shop in your decision to go there? Convenience Quality coffee Staff friendliness Atmosphere Value for money Other a S
Slide 12: Convenience - Offering diversity in the market
( conveniates - Offering diversity in the market ce aaa” HOSPITALS HIGH STREET DRIVE THRU’S AIRPORTS T=. KIOSKS — Wa 12 ———— WHITBREAD
Slide 13: Coffee quality is at the heart of what we do
ic offee quality is at the heart of what we. do = = Quality 7 e e control me ea » 2 or Is ' ..f Coffee quality ie “| is at the heart ; of what we do testing Barista & a, coffee — 7 o%, 7 4 : * OR, < . a . a — A 22 ‘ ° “ _ vy é ke Innovation © : plantations ‘ e : a ~ ‘ ed nl a £ £ _ —_ - 13 Notes: Da
Slide 14: Operational excellence and consistency
= J _ = = Operational excellence and consistency : It isn’t easy to deliver consistently good , coffee in over 3,186 stores but we’re pretty good at it oct. - \ a Certified™ Coffee if Over 1 million y —— a : cups of coffee per day! 1 Note: Numbers as of FY 2014/15. : E WHITBREAD
Slide 15: Costa UK - A formula delivering success
Costa UK - A formula delivering success 11% 2008 —CO§TA == Starbucks Source: YouGov Q. If there. were a Costa \Coffee,StarbuckS.ahd Gaffe Nero next Sodtce: a of brahd TNS rs 7 15 door to each other. which one Wo UIST ciliellin FI RMTaNING Lene ciinemaan WHITBREAD
Slide 16: c.2,500 stores
2020/21 c.2,500 stores 4 Retail Parks / Drive Thru as Education / Health / Office Concession H1 2015/16 1,999 stores .- High Street e Current 2020 ‘
Slide 17: Innovation
t innovation
Slide 18: Innovation of the store
4 Innovation of the store we cot
Slide 19: Digital developments
Digital developments Pay and collect trial * Coffee Club - 2.7m active users COsta (+9.5% year on year) 5 i 7 - — Over 40% of transactions by Coffee Club members Z = = = ” (ll i, * Coffee Club App ou — Rapid growth in active customers using app tearm all sbout your hey Coffee club spy * Apple Pay —
Slide 20: Success supports international and channel growth
™ Success supports international and channel growth | 1999 1777 1st international Present in store in Dubai oe =. 30 countries ~~
Slide 21: Costa Express - Another growth channel
Y costa Express - Another growth channel Coffee Nation: Costa Express Costa Express machines 877 machines 2011 4,979 machines Q3 2015/16 * 4,979 Costa Express units — 439 international — Good like for like sales growth * New technology management platform Automating key sales and service processes P
Slide 22: Innovating for coffee lovers
INNOVATING FOR COFFEE LOVERS
Slide 23: Franchise - strong growth
i * Franchise - strong growth — 689 stores in 25 countries — New formats and channels mj ° Poland - re-branding almost comple s — 100% of stores re-branded to Costa = — Encouraging like for like growth — 194 Costa Express machines performing well * France - making progress — 13 equity stores/3 franc
Slide 24: China and Asia - A great opportunity
China and Asia - A great opportunity — * Mid single digit like for like sales growth * China - Fast and dynamic market — 356 stores in two joint ventures — Investing in tailoring of stores and product local customer — Importance of loyalty - building team is key ; ¢ Singapore - 8 equity stores and g
Slide 25: Costa - the Nations favourite coffee shop
— Costa - the Nations favourite coffee shop 25 Canaccord Conference 28 January 2016 WHITBREAD