Slide 1: Annual Results 2008/09
Whithroad Annual Results 2008/09
Slide 2: Anthony Habgood, Chairman
Anthony Habgood Chairman
Slide 3: Christopher Rogers, Group Finance Director
Christopher Rogers Group Finance Director
Slide 4: Summary
Summary £m 2008/09 2007/08 Change PBT from continuing operations, pre exceptionals £229.9m £210.3m 9.3% EPS, continuing operations 93.0p 78.8p 18.0% pre exceptionals (diluted) EPS, underlying 92.2p 76.4p 20.7% Proposed final dividend 26.90p 26.90p Total dividend for year 36.55p 36.00p 1.5%
Slide 5: Summary - Profit & Loss
Summary - Profit & Loss £m 2008/09 Revenue from continuing 1,334.6 operations Profit from operations 277.6 Central costs (22.6) Interest (25.1) PBT from continuing 229.9 operations, pre exceptionals 2007/08 Change 1,216.7 9.7% 254.3 9.2% (24.4) 7.4% (19.6) (28.1)% 210.3 9.3%
Slide 6: Summary - Profit & Loss continued
Summary - Profit & Loss continued £m PBT from continuing operations, pre exceptionals Taxation Net profit from continuing Operations, pre exceptionals Discontinued operations Total profit, pre exceptionals Exceptionals Profit for the year 2008/09 7294 (69.6) 160.3 160.3 (70.0) 90.3 2007/08 Change 21
Slide 7: Revenue by business segment
Revenue by business segment £m 2008/09 2007/08 Change Hotels & Restaurants 1,061.6 973.9 9.0% Costa 263.8 216.3 22.0% Less: inter-segment (3.6) (2.4) Other 12.8 28.9 (55.7)% Revenue from continuing : 1,334.6 1,216.7 9.7% operations * Sales between segnents. ** Supply chain sales to 3” parties
Slide 8: Hotels & Restaurants revenue
Hotels & Restaurants revenue 2008/09 2007/08 Premier Inn revenue 601.5 527.8 Restaurants revenue 460.1 446.1 Hotels & Restaurants 1,061.6 973.9 * Revenue from joint site and standalone restaurants 14.0% 3.2% 9.0%
Slide 9: Like-for-like sales
Like-for-like sales % Premier Inn Restaurants Hotels & Restaurants Costa Total 2008/09 2007/08 6.0 10.4 4.6 0.8 5.4 5.6 2.0 6.5 4.9% 5.7%
Slide 10: Profit by business segment
Profit by business segment £m 2008/09 2007/08 Change Hotels & Restaurants - UK 258.2 234.9 9.9% Hotels & Restaurants - overseas (3.3) (1.4) Total Hotels & Restaurants 254.9 233.5 9.2% Costa - UK 25,2 22.4 12.5% Costa - overseas (2.5) (1.6) Total Costa 22.7 20.8 9.1% Profit from operations 277.6 254.
Slide 11: Summary - Profit & Loss
Summary - Profit & Loss 2008/09 2007/08 Revenue from continuing operations 1,334.6 1,216.7 9.7% Profit from operations 277.6 254.3 9.2% Central costs (22.6) (24.4) 7.4% Interest (25.1) (19.6) (28.1)% PBT from continuing "229.9 210.3 9.3% operations, pre exceptionals
Slide 12: Interest charge
Interest charge £m Interest on borrowings Interest on deposits/investments Other Underlying interest charge IAS 19 - pension finance credit Finance cost of hedges Interest charge pre exceptionals Average debt £531.0m, 2007/08 £448.9m 2008/09 (35.5) 2a 3.0 (30.2) 5.5 (0.4) (25.1) 2007/08 (31.9) 4.1 1
Slide 13: Exceptional items
Exceptional items £m Re-organisation costs Premier Inn rebranding Profit/(loss) on property disposals and reversions Impairment Abolition of HBAs Tax and interest on exceptional items Exceptional items * No cash impact 2008/09 (13.3) (5.7) 6.9 (16.7)° (44.1)° 2.9 (70.0)
Slide 14: Cash flow
Cash flow £m Cash generated from operations Working capital movements Cash flow from operations Cash capital expenditure Business acquisitions International investment Cash flow after investment Interest, tax and ordinary dividends Pension, special contribution Disposals/buybacks/other Increase/decr
Slide 15: Capital expenditure
Capital expenditure £m 2008/09 2007/08 Hotels & Restaurants 242 226 Costa 30 33 Corporate/Discontinued 4 24 Total 276 283
Slide 16: Balance sheet
Balance sheet * Year end debt at £623.1m * Year end leverage — Adjusted net debt/EBITDAR cae. — Net debt/EBITDA 1.8 x * Facilities — £1,155m to Dec 2010 — £930m to Dec 2011 — £855m to Dec 2012 — £455m to March 2013
Slide 17: Pension
Pension * IAS 19 pension deficit increases from £33m (£24m net of tax) to £233m (£168m net of tax) * Triennial pension fund deficit agreed in principle at £388m * Main elements of recovery plan’ — Payment plan agreed with no further payments until August 2011 — Security of £150m over property — Paym
Slide 18: Other financial items - 2008/09
Other financial items - 2008/09 * £7m of £25m 3-year cost savings programme communicated in February 2008 achieved * Effective tax rate on profit from continuing operations of 30.2% * Pension fund interest credit £5.5m * Property rent for leverage calculation £67m
Slide 19: Other financial items - 2009/10
Other financial items - 2009/10 £13m of 2008 cost saving programme to be achieved — Balance of £25m to be achieved by 2010/11 — Remaining cost of achievement £10m Capex of c.£170m Absent acquisition opportunities cash flow neutrality Effective tax rate of c.30% Property rent for leverage calculation
Slide 20: Underlying Profit & Loss
Underlying Profit & Loss £m 2008/09 2007/08 Change Pe LE Opes 229.9 210.3 9.3% operations, pre exceptional IAS 19 - Pension finance credit (5.5) (7.0) IAS 17 - Impact of future 3.4 0.4 minimum rental uplifts Finance cost of hedges 0.4 0.1 Underlying profit before tax 228.2 203.8 12.0% ¢ Eliminates v
Slide 21: Summary
Summary * Sales up 9.7% * Like-for-like sales up by 4.9% * PBT from continuing operations pre exceptional, up 9.3% to £229.9m * EPS continuing operations, pre exceptional up 18.0% to 93.0p * EPS underlying 92.2p up 20.7% * Final dividend 26.90p giving a full year dividend of 36.55p, up 1.5%
Slide 22: Whitbread
Whitbread
Slide 23: Whitbread well placed for tougher times
(Jhitbread well placed for tougher times 2008/09 Building leading brands 2009/10 Managing through change
Slide 24: Whitbread
Whitbread
Slide 25: Slide 25
Slide 26: Premier Inn Highlights 2008/09
2M Highlights 2008/09 Premier Inn * Revpar outperforms budget competitors by 4.9° ppts H1 H2 Full year Budget competitors’ +2.6 ppts -7.7 ppts -2.5 ppts Premier Inn +6.5 ppts -1.2 ppts +2.8 ppts * Like-for-like sales up 6.0% * Opened 55 new hotels, 4,553 rooms (2007/08: 3,437 rooms) ¢ Refurbished ov
Slide 27: Building a UK market leader
Building a UK market leader wh yea 2p Star performer | JuRYs jnns : = : : Express i Wtbs on Historically coon i. Historically weaker Be asyrotel.com ‘ eiaenslanacapneraipeeeeiaaaasaon a eee eae ee eee stronger easyHotel.com Hie ile a ampanic Travelodge brands Welcome Lodge ; Under pressure Low profi
Slide 28: City Centre competitive pricing
City Centre competitive pricing £140 5 £120 * Thistle £100 + Holiday Inn Jurys £80 > HI Express £60 + Travelodge £40 5 nee ETAP £20 Mar-08 Apr-08 May-08 Jun-08 JulO08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Source: eClerx 2009. Including VAT
Slide 29: Premier Inn competitive outperformance
Premier Inn competitive outperformance Revenue per available room MAT 2008/09 se: £36.00 - lage Budget competitors £35.00 ~ T T t T T T T T T t Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Source: TRI Hotstats. Excluding VAT
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Slide 31: Premier Inn consistently improving customer satisfaction scores
Premier Inn consistently improving customer satisfaction scores % 100 Likely to stay again DP sa A Em a Overall satisfaction 4 ae” oo Recommendation 85 ooo Value for money 80 75 70 March July November March July November March 2007/08 2008/09 Source: ORC Guest Recommendation Survey
Slide 32: Premier Inn - clear budget hotel preference
Premier Inn - clear budget hotel preference Business guests who pay up to £69 per night 4.4 3.4 Jury's Inn Holiday Inn Express Ibis Travelodge » ) Premier inn Source: BDRC British Hotel Guest Survey 2009 © BDRC 2009 Premier Inn is clear preference within competitor set for business quests who usuall
Slide 33: Preference increases with frequency
Preference increases with frequency The proportion of frequent stayers who prefer Premier Inn is more than three times higher than those who prefer Travelodge 15 or 2"¢ Choice % 13 ») Premier inn ier 10 9 8 Jurys Inn Holiday Inn Express 4 Travelodge Ibis 0 T T 1-5 Nights (occasional) 6-20 Nights (re
Slide 34: Budget sector supply growth
De Luxe Upper full service Mid-market full service Budget in Budget sector has outperformed all other branded sectors in terms of supply growth 262,000 246,000 205,000 EZ =a Premier Inn 2005 2006 2007 2008 2009 Source: BDRC desk research, January 2009. Bedroom figures rounded to nearest 1,000
Slide 35: Businesses switch to budget hotel brands
Businesses switch to budget hotel brands Over half of all business users stayed in budget hotel brands last year % Budget brand usage is ahead of mid-market and upper full service brands for the first time Budget 52 Mid-market full service 48 Upper full service 44 40 4 36 - - - - : 2004 2005 2006 20
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Slide 37: Growth of Premier Inn business customers 2008/09
Growth of Premier Inn business customers 2008/09 * Total Business Account sales up 24% to £171 million * 14% growth in new accounts sign-ups * Now 14,000 Business Accounts * 61,000 card users
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Slide 39: Attracting and retaining more first time guests
Attracting and retaining more first time guests * 23% of guests using Premier Inn are 1%‘ time customers - up 4% * 72% of 1% time customers chose Premier Inn as a cheaper alternative * 87% of 1% time customers are ‘likely’/‘very likely’ to stay again * 87% of 1%* time customers would recommend Premi
Slide 40: 2008/09 Pub Restaurants - building strong value for money propositions
2008/09 Pub Restaurants - building strong value for money propesitions THE ULTIMATE EATERY
Slide 41: Pub Restaurants highlights 2008/09
Pub Restaurants highlights 2008/09 ¢ Like-for-like sales up 4.6% e Opened 13 new pub restaurants ¢ Menu re-engineering focused on value for money ¢ Tight cost control - driving joint site efficiencies ¢ 75% of pub restaurants refurbished in last 4 years
Slide 42: Giant greater value than in 1994!
Gant greater value than in 1994! Dish Rump steak £9.25 £5.95 Gammon steak Pyaa Ses Me Fish and chips £6.95 £5.95 * Prices from either the Daytime or Evening Flaming Good Deal Meal
Slide 43: Pub Restaurant customers up 8% 2008/09
Pub Restaurant customers up 8% 2008/09 Brand Customer rating Value for money Recommended to friends Brewers reyse
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Slide 45: Costa Highlights 2008/09
COSTA Highlights 2008/09 ¢ Costa coffee preference confirmed ¢ Costa store expansion: 296 net new stores (2007/08: 285 stores) ¢ Like-for-like sales up 2% ¢ Transaction volumes up 0.8% ¢ Food capture at 42.5%
Slide 46: Costa - now a significant business with consistent growth in profits
Costa - now a significant business with consistent growth in profits Profit £m | Profit CAGR 18% £22.7m 20 T 15 + 10+ 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09
Slide 47: Costa 2008/09: Leading the UK coffee shop market
Costa 2008/09: Leading the UK coffee shop market 25 Total sales % year on year 20 18 10 1.2 Retail sales Coffee shop market co 4 T A Source: Retail sales - BRC [2008/09]; Coffee shop market — Allegra [2008]; Costa — company data [2008/09]
Slide 48: Whitbread
Whitbread
Slide 49: Our firm foundations
(Nhitbread Our firm foundations ¢ In touch with customers Portfolio of leading VFM brands No.1 position with businesses switching to budget hotels A well-invested and maintained quality estate People culture based on skills, sales and service
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Slide 51: Whitbread 2009/10: Managing through change
(Whitbread 2009/10 Managing through change Three clear priorities: * Outperform competitors * Take advantage of financial strength * Achieve planned efficiencies
Slide 52: Premier Inn 2009/10
2009/10 Premier inn ¢ Widen reservation distribution Phase II strategic revenue management Attack full service corporate market Launch new campaign for the leisure market Maximise superior F&B £20 dinner, drink and breakfast offer
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53
Slide 54: Pub Restaurants delivering stronger customer value
Pub Restaurants delivering stronger customer value gud foog Brewers Fayre # shout? Two for £10 All you can eat for £5.95
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Slide 56: COSTA 2009/10
COSTA 2009/10 SORRY STARBUCKS 7 OUT OF 10 THE PEOPLE § corrre LOVERS HAVE | PREFER In head-to-head taste tests, 7 out of 10 coffee lovers In head to head tests, 7 out of 10 coffee lovers preferred Costa cappuccino to Starbucks. prefer Costa cappuccino to Starbucks
Slide 57: Launch of Costa Coffee Club
2009/10 Launch of Costa Coffee Club
Slide 58: Sharper price bundles
COSTA 2009/10 Sharper price bundles
Slide 59: COSTA building an international brand
COSTA building an international brand * Very rapid growth since 2003/04 Engel 500 * Costa second largest international coffee 400 © shop brand 407 297 300 ~ * 407 stores in 24 countries 200 © 175 * Building a demand 121 which previously 100 - 78 did not exist in ats many markets 0 nn : : 2003/04 200
Slide 60: Take advantage of financial strength
(Whitbread 2009/10 Take advantage of financial strength * Disciplined growth: 2,000 Premier Inn rooms (1,700 UK), 6 Pub Restaurants and 200 Costas (100 Uk) Developing land bank Adequate headroom with no imminent refinancing required Strong freehold property backing Alert for shareholder value enhanc
Slide 61: Achieve planned efficiencies
(Whitbread 2009/10 Achieve planned efficiencies * Efficiency of combined management maximising advantage of joint sites * £25m cost savings on track with more to come — £7m delivered in 2008/09 — £13m target 2009/10 — £5m target 2010/11 * Outsourcing logistics, payroll and transactional accounting -
Slide 62: Next trading update June
Whitbread * Next trading update 16 June
Slide 63: Well positioned for tougher times
(Whitbread 2009/10 Well positioned for tougher times Strong value-for-money brands Aggressive sales and marketing strategies Cash flow neutrality Robust balance sheet
Slide 64: Appendix
Whithroad Appendix
Slide 65: Standard Information definitions
Standard Information General !"#$%&%'()**+(),-%(.!))/ (0*-%1(,""*++*',2*3($3"*+%('amp;#039;%'(45(-#%( 36+4%7(*8(7**+9(*""6:$%'(45(;6%9-9( <3"*+%(,=%7(>?%'("*9-9 (0*-%1(*:%7,23;(:7*>-(,=%7('$7%"-15(,@7$46-,41%( >?%'("*9-9(46-(4%8*7%(,11*",23;(#%,'(*A"%(,3'( "%3-7,1("*9-9( <3"*+%(4%8*7%(>?%'("*9-9 (0*-%1(*
Slide 66: Standard Information Hotels & Restaurants
Standard Information Hotels & Restaurants FY FY 2008/09 2007/08 Sales Analysis Sales - Solus Sites £m 350.9 310.6 Sales - Joint Sites 1 £m 710.7 663.3 Total Sales £m 1,061.6 973.9 Sales - Premier Inn £m 601.5 527.8 Sales - Restaurants £m 460.1 446.1 Total Sales £m 1,061.6 973.9 Financial Analysis IA
Slide 67: Standard Information Hotels & Restaurants
Standard Information Hotels & Restaurants FY FY 2008/09 2007/08 Number of Rooms Solus - Managed 19,933 17,856 - Joint Venture/ Associate 282 282 - Franchise & Management Contract 1,082 1,082 Total Solus 21,297 19,220 Joint Sites 18,799 16,631 Total UK 40,096 35,851 International 463 155 40,559 36,00
Slide 68: Standard Information Costa
Standard Information Costa FY 2008/09 FY 2007/08 Headline financials Sales £m 263.8 216.3 EBITDA from Operations £m 39.7 34.3 EBIT from Operations £m 22.7 20.8 Net Assets £m 83.5 72.6 Capital expenditure £m 30.5 33.8 Key operating measures Like-for-like sales % 2.0% 6.5% Operating margin % 8.6% 9.6%