Slide 1: Whitbread: Making everyday experiences special
WHITBREAD “Making everyday experiences special”
Slide 2: Disclaimer
(o This presentation (the “Presertatior”) is provided on a strictly private and corfidertial bast for iformation purposes orlyy isclaimer By attending or readre ths Presentation, you will be deemed to have agyeedto the cblizations and restrictions set cut below Without the express prior written cors
Slide 3: Richard Baker, Chairman
Richard Baker Chairman a WHITBREAD
Slide 4: Andy Harrison, Chief Executive
Anay Harrison Chief Executive wv WHITBREAD
Slide 5: Double digit growth
(o Revenue and Underlying PBT Capital management and cash flow EPS, DPS and return on capital ouble digit growth WHITBREAD Revenue Aes £ 1 e 4... Like for like sales growth 3.6% PBT @ 291.3. EBITDA Ave) 2389.8 Net debt of Leverage ratio aintained 125.9m Capital expenditure* Asem 6293.3m Underlying b
Slide 6: Strong organic growth
i Strong organic growth WHITBREAD * Premier Inn total sales up 12.6% ~ Rooms available up 8.0% Customer oP ers, p _wieino vom \Heartbeat/ rotate cow J — Occupancy at 83.7% * Costa sales up 16.2% — UKsales up 16.5% ~— UK like for like sales up 4.4% ~— International sales up 14.2% * On track to delive
Slide 7: Nicholas Cadbury, Group Finance Director
Nicholas Cadbury Group Finance Director F WHITBREAD
Slide 8: Underlying profit before tax up 13.8%
fu £m Revenue Profit from operations Central costs Underlying operating profit Interest Underlying profit before tax Basic underlying earnings per share (pence) nderlying profit before tax up 13.8% WHITBREAD H1 2014/15 1,293.2 277.4 (13.8) 263.6 (7.6) 256.0 111.69 H1 2015/16 Change 1,439.8 11.3% 316
Slide 9: Good profit performance
(Good profit performance WHITBREAD Profit £m H1 2014/15 H1 2015/16 Change Hotels and Restaurants - UK & Ireland 228.5 252.4 10.5% Hotels and Restaurants - International (3.5) (3.0) 14.3% Total Hotels and Restaurants 225.0 249.4 10.8% Costa - UK 52:7 65.7 24.7% Costa - International (0.3) 1.6 Total C
Slide 10: Continued strong revenue growth
' Gentinied strong revenue growth WHITBREAD Revenue £m Total sales Growth UK like for like Premier Inn 642.1 12.6% BO: | Gece sane Restaurants 284.8 1.2% 0.1% Total Hotels and Restaurants 926.9 8.8% 3.4% Costa - UK 453.5 16.5% 4.4% Like for like transactions +3.7% Costa - International 61.1 14.2% 13
Slide 11: Underlying profit after tax and exceptionals
f underlying profit after tax and WHITBREAD exceptionals £m H1 2014/15 H1 2015/16 Change Underlying profit before tax 256.0 291.3 13.8% Pension finance cost - IAS 19 (11.5) (9.1) 20.9% Amortisation of acquired intangible (1:22) (281) (75.0)% Profit before tax, pre exceptionals 243.3 280.1 15.1% ye a
Slide 12: Strong EBITDA providing cash generation to fund capital investment
Strong EBITDA providing cash WHITBREAD generation to fund capital investment £m EBITDA Capital investments Financing, pension and tax Dividend H1 2014/15 H1 2015/16 Net debt @ @ * EBITDA growing at double digit and cash capital spend of £293m * Debt in line with expectations at £725.9m (£583.2m as a
Slide 13: Strong balance sheet - leverage ratio maintained
£m Leverage ratio fring balance sheet - leverage ratio maintained Maintaining adjusted net debt to EBITDAR <3.5x @&> ED WHITBREAD 2, Bg 2,775 2,491 Net Debt Pension Lease 822° 878° commitments (Rent x8) zi Adj Debt EBITDAR Adj Debt EBITDAR Adj Debt EBITDAR H1 2014/15 (MAT) FY 2014/15 H1 2015/16 (MAT
Slide 14: Significant facilities from diverse sources
(s sources USS private placements* Bond, coupon 3.375% Bank revolving credit facility — Previous RCF prior to amendment Operating leasehold agreements £258m £450m £950m £650m Sale and leaseback transactions (25 years) ignificant facilities from diverse 2019-2022 2025 2020 2019 WHITBREAD Issued May 2
Slide 15: Cash capital expenditure driving future EBITDA growth
EBITDA growth Cash capital £m H1 2015/16 HY on HY Hotels and Restaurants 252.9 +60.9 Expansionary capital — building our pipeline 182.1 +80.4 * UK freehold property acquisition of c.£90m (c.£48m H1 2014/15) * Freehold and leasehold construction — c.£88m (c.£52m H1 2014/15) Product improvement and ma
Slide 16: Pipeline growth to c.14,300 rooms
(p As ipeline growth to c.14,300 rooms WHITBREAD at 27 August 2015 59,957 UK rooms” Committed pipeline c.14,300 c.13,000 66% 65% 34% 35% Leasehold* <35 years Freehold & long leasehold H1 2014/15 H1 2015/16 Ht 2014/15 MP H1 2015/16 @Freehold ™@Leasehold Extensions Post completion of the committed pip
Slide 17: Improving returns
fmpreving returns WHITBREAD Hotels and Restaurants Costa Group Return excluding freehold development 48.2% +0.2%pts +0.5%pts +0.9% pts under construction H H1 2014/15 Fy 2014/15 H1 2015/16 H1 2014/15 FY 2014/15 H1 2015/16 H1 2014/15 FY 2014/15 H1 2015/16 Returns are calculated by dividing the MAT un
Slide 18: Interest, taxation and pension
\ nterest, taxation and pension * Underlying interest charge of £10.3m (2014/15 H1 £7.6m) £m H1 2014/15 H1 2015/16 Loans and overdraft charge (10.2) (14.3) Interest capitalised 2.6 4.0 Underlying interest charge (7.6) (10.3) Effective interest rate 4.6% 4.8% * Effective tax rate in H1 of 21.1% — (20
Slide 19: Considerations for 2nd half 2015/16
’ Gencidersiians for 2nd half 2015/16 WHITBREAD * UK 2015/16 market forecast’ revpar * Costa H2 revenue investments growth of c.4% — Team pay increased (c.10%) in October 2015 c.£5m . : : — International investment timing c.£2m * Premier Inn adding 7-8% available room capacity across the year * Full
Slide 20: A good performance, delivered
* Agood performance, delivered — Underlying profit before tax growth of 13.8% and EPS growth of 14.0% — Return on capital up 0.1% pt to 15.9% * Growth driven by — Investment in new hotels and improving the quality of our estate — Recovery of the regional hotel market — Expansion and innovation in Co
Slide 21: Andy Harrison, Chief Executive
Anay Harrison Chief Executive wv 21 WHITBREAD
Slide 22: Agenda
a Agenda WHITBREAD Hotels and Resta (2) COSTA @) good together (4) Current trading (5) Summary 22 WHITBREAD
Slide 23: Hotels and Restaurants: strong growth
strong growth WHITBREAD Hotels and Restaurants Total sales up +8.8%, profit before interest and tax up +10.8% to £249.4m * Return on capital 13.3% (H1 2014/15: 13.7%) * Premier Inn sales up +12.6%, increase in available rooms +8.0% — London total sales growth 20.6%; Regions total sales growth 10.5%
Slide 24: Premier Inn
® Premier Inn WHITBREAD
Slide 25: Best customer choice
Best customer @) choice Premier Inn t eS tivitisy Inn success drivers Network strength Occupancy 83.7% Dynamic ie: Investing pricing ; ha : in our product c.£130m Digital direct distribution investment in 84% | 2015/16 premierinn.com J 25 WHITBREAD
Slide 26: Best network, best customer choice
(e est network, best customer choice Premier Inn Number of UK hotels c.900 2012/13 2013/14 2014/15 HY 2015/16 2020 Milestone ** Bibis MW Holidayinn Express “Travelodge @ ® . 4 Premier inn 26 Source: Whitbread competitive database / AM:PM Hotels * Includes one hotel in Ireland ** Calendar year WHITBR
Slide 27: Quality and consistency of customer experience
(Quality and consistency of customer experience ® Premier Inn Investing c.£130m in 2015/16 (c.£100m in 2014/15) * c.13,200 room refurbishment (c.12,700 in 2014/15) * Completed new bed rollout (30,000 new beds) » Including investing c.£25m in systems Enhancing booking and reservation system Improving
Slide 28: Brand strength drives 84% digital direct distribution
(avend strength drives 84% digital direct @) distribution Premier Inn Volume of reservations by channel Continued focus on digital, pricing and TV marketing to drive direct bookings 17% 15% 11% 8% —_Non-automated 23% 0) Web indirect 33% Paid search optimisation Premier Inn delivering material Digita
Slide 29: Regions - good sales growth of 10.5%
(R H1 2015/16 Total sales Available rooms Like for like sales” Total revpar Occupancy ARR (0.4)% pts @® 9% +5.0% GER | egions - good sales growth of 10.5% Total occupancy HY 2015/16 83.1% eke) Eee 82.8% 84.1% ead +10.5% +6.2% +6.1% Monday Tuesday Wednesday Thursday Friday Saturday Total revpar HY 20
Slide 30: London - outstanding sales growth of 20.6%
wenden - outstanding sales growth of 20.6% @) Premier Inn Total occupan: YY 2015/ H1 2015/16 occupancy HY 20 z 16 89.0% 94.7% 95.0% 89.5% 87.8% 91.5% 75.2% Total sales +20.6% Rooms available 421.5% Like for like sales” 0.0% Monday Tuesday Wednesday Thursday Friday Saturday Sunday Total revpar HY 201
Slide 31: Premier Inn - winning market share
(p remier Inn —- winning market share Accommodation sales growth 2012-2015 Greater London UK regions 51% Premier Inn Total market Premier Inn Total market ® Premier Inn Forecast supply growth 2016 * Market growth* — London 2-3% — Regions c.1% » Premier Inn capacity growth — London 15-18% — Regions 6
Slide 32: Premier Inn - the UK's favourite hotel chain
Ca Inn - the Uk’s favourite hotel chain (OKO) score 4.3 out of 5.0 YOUGOV vatue for money measure Premverinn tripadvisor © MillwardBrown most loved hotel Premier Inn Premier nn ©) TT 2: Hilton Travelodge Travelodge Holiday Inn/Holiday Inn Express a i ee ee Marriott Ibis Best Western —_ Mariott ~! =
Slide 33: On track for 2018 and 2020 Growth Milestones
2015/16 c.5,500 room openings H2 openings Including 1,260 ‘ extensions H1 openings tei track for 2018 and 2020 Growth Milestones @) Committed pipeline 9,627 Premier Inn On site, under construction 6,288 rooms H1 2014/15 H1 2015/16 - New sites 43 47 » Extensions 21 40 64 87 Expect to open c.5,000 UK
Slide 34: hub - winning formula
(h * hub St Martin’s Lane - opened November 2014 — ARR c.£100 (c.16% discount to Premier Inn)* — Occupancy 95.6% — 100% booked direct ub - winning formula * TripAdvisor score 4.5 — 89% excellent or very good experience Ss cb * ¢.2,300 rooms committed, 13 hotels — *««<«iincicus Si — Tower London, Edi
Slide 35: Premier Inn Germany: first hotel in Frankfurt opens March 2016
(p First hotel in Frankfurt opens in March 2016 remier Inn Germany ® a. =) Premier Inn Signed 2" hotel in Munich * 8 new sites under negotiation * Minimum scale 12-15 hotels in 6-8 cities ~ Of which 6-8 hotels open by 2020 — Potential breakeven around 8 hotels — Profit growth platform 5-7 years 35 W
Slide 36: Premier Inn International - building scale
(p remier Inn International - building scale Premier Inn * India good sales growth » Middle East performing well in a soft market — First management contract hotel in Sharjah * Pipeline of signed 5,174 rooms H1 2015/16 Year on year change % Like for like occupancy 79.1% 2.8% pts Like for like revpar
Slide 37: 37 WHITBREAD
37 WHITBREAD
Slide 38: Whitbread Inns
ay WHITBREAD INNS (p * Total sales £284.8m, up +1.2% — Like for like sales up +0.1%, covers down 0.5% rogress in a soft market — Continued to outperform Coffer Peach benchmark” » Gross margins improved — +0.4% pts on F&B lower inflation, productivity and better mix * Good progress rejuvenating our b
Slide 39: Costa
py 39 WHITBREAD
Slide 40: Costa: an excellent performance
2 An excellent performance System sales up 14.9% to £755.4m — International system sales* up 13.6% to £157.3m UK equity like for like sales up 4.4% * Underlying profit up 28.4% to £67.3m Costa Express machines c.700-800 new units this year * 220 net new store openings this year On track for 2018 and
Slide 41: Costa UK - winning consumers' hearts
(Costa UK - winning consumers’ hearts COSTA Preference Costa is the UK’s favourite % Brand warmth Warm Cold COSTA — 22%! Caffé Nero — k—> 38% 31% 17% Pret A Manger 2008 2009 2010 2011 2012 2013 2014 2015 McDonalds ——CO§TA = = Starbucks —==Nero 30V Q. If there a Costa Coffee, Starbucks and C her, whi
Slide 42: Costa UK - transaction growth driving like for likes
(c for likes 5 year cup of coffee price comparison* £2.75 £2.50 £2.50 £2.45 que £2.45 2011 2012 2013 2014 2015 —CO§STA == Starbucks = Nero osta UK - transaction growth driving like COSTA Transaction growth has powered UK retail growth 6.8% FY 2011/12 FY 2012/13 FY 2013/14 Fy 2014/15 @ Like for like
Slide 43: Driving new growth opportunities
Driving new growth opportunities BBE 47 2020/21 Ge 4. \.\.\ “ c.2,500 stores H1 2015/16 1,999 stores. High Street Transport 2020 WHITBREAD 43
Slide 44: Continuing product innovation
COSTA OLD PARADISE STREET LIMITED ROAST NO.7 Continuing product innovation WHITBREAD
Slide 45: Digital developments
(o igital developments * Coffee Club - 2.7m active users (+9.5% year on year) — Over 40% of transactions by Coffee Club members » Coffee Club App ~ Rapid growth in active customers using app » Apple Pay — Available in 100% of equity and 80% of franchise stores — Enhancing customers experience — Incr
Slide 46: Costa Express - continuing success
(costa Express - continuing success COSTA + 4,708 Costa Express units Costa Express machines — 433 international 8,000 — Good like for like sales growth » New technology management platform — Automating key sales and service processes | — Proactive diagnosis of machine issues A708 — Enables internat
Slide 47: EMEI - investing to grow the brand
(EMEI - investing to grow the brand COSTA Poland - re-branding almost complete — 80% of stores re-branded to Costa — Encouraging like for like growth — 194 Costa Express machines performing well * France - making progress — 13 equity stores/3 franchise stores — Improved savoury range — First store o
Slide 48: China and Asia - a great opportunity
(China and Asia - a great opportunity COSTA * Mid single digit like for like sales growth * Fast and dynamic market ~ New marketing campaign launched ‘Made in London’ — Increased product development cycle new food range every two months — Launched Alipay App — Coffee range merchandising launched in
Slide 49: Investing in our people and customers
Investing in our people Winning Teams THESUNDAY TIMES BEST BIG COMPANIES TO WORK FOR good * Top quartile Employee Engagement c.15,000 new UK jobs by 2020 Training - over £12m investment p.a. 6,000 apprenticeships by 2020 - 133 apprenticeships since March 2014 and c.840 in learning The Sunday Times B
Slide 50: Customer Heartbeat drives National Living Wage response
(c 50 ustomer Heartbeat drives our WHITBREAD National Living Wage (NLW) response Value for : money drives Investment in y fee our strong trainin 6 like for like Pay for progression growth Customer Winning Teams Heartbeat Profitable Growth —_ good ; : ( Investment in We support efficiency and sustain
Slide 51: Whitbread cost base
Whitbread cost base 2014/15 c.£1.8bn Other cash costs (/NLW is only one inflation factor Expected cost inflation c.2% p.a. c.£30m p.a. 5-6% p.a. £30-40m p.a. (including NLW incremental £15-20m p.a.) We can mitigate cost inflation WHITBREAD Mitigating actions + Organic growth (economies of scale and
Slide 52: Good for Teams, Customers and Environment
(2 Good for Teams and Good for Customer Good for Environment Community Well Being 020 targets 6,000 apprenticeships 7,500 work experience placements 6,500 employment placements 15,000 new UK jobs £15 million raised for Costa Foundation including 100 school projects £10 million raised for WHR charity
Slide 53: Making good progress
f making good progress ether good tog 1,499 new jobs created year to date * 840 apprentices in learning — 2,203 work experience and 1,828 employment placements since March 2014 completed in Premier Inn and Restaurant brands £1.8m raised for charity — Costa Foundation £900,000 raised year to date — G
Slide 54: Current trading
fc urrent trading * Trading momentum in the early weeks of the second half has been consistent with that seen across the first half * We remain on track to deliver full year results in line with expectations by 54 WHITBREAD
Slide 55: Summary
(s ummary Good first half performance — EPS growth of 14.0% Strong cash flow financing double digit organic growth On track for our full year expectations On track for 2018 and 2020 Growth Milestones d 55 WHITBREAD
Slide 56: 56 WHITBREAD
56 WHITBREAD
Slide 57: Appendix
Slide 58: Standard information - general
STANDARD INFORMATION - GENERAL F ice rage Room Rate (ARR) Income before fixed costs (IBFC) Income after fixed costs (IAFC) Joint Sites Like for like sales Occupancy Return on Capital Solus Sites Revpar/yield Hotel accommodation income divided by the number of rooms occupied by guests Whitbread Hotel
Slide 59: Standard information - Whitbread Hotels and Restaurants
STANDARD INFORMATION - WHITBREAD HOTELS AND RESTAURANTS Solus ' Sales IBFC JAFC Net Assets | Return on Capital * Joint * Sales IBFC JAFc Net Assets Return on Capital TOTAL - Hotels & Restaurants Sales - Premier Inn Sales - Restaurants Sales - Total Revenue 1BFC 1AFC EBITDA from Operations Underlying
Slide 60: Standard information - Whitbread Hotels and Restaurants cont.
STANDARD INFORMATION - WHITBREAD HOTELS AND RESTAURANTS cont. Number of Rooms Solus : Managed 34,165 31,252 33,559 Associate 282 282 282 Franchise & Management Contract 194 449 194 Total Sotus 34,647 31,983 34,035 Joint Sites 25,316 24,036 25,103 Total Uk & ireland 59,957 56,019 59,138 International
Slide 61: Standard information - Costa
STANDARD INFORMATION - COSTA System Sales - Total Sales - Total EBITDA from Operations Underlying operating profit Segmental Net Assets Cash - Capital Expenditure - Total * Cash - Business combinations Cash - Capital Expenditure & Investments Key operating Measures Like for Like Sales Growth’ Underl
Slide 62: Strength and breadth - HY 2015/16
(‘Strength and breadth - HY 2015/16 COSTA UK Retail Equity stores Individual franchise Costa Enterprises Costa Express Corporate Partnerships Costa EMEI Europe, Middle East and India Costa Asia China and South East Asia 59.8% cr > "4 > cr cr +) System sales System sales System sales System sales £40