Whitbread PLC · LSE:WTB
Whitbread — FY2005/6 Earnings Presentation
49 slides from Whitbread's earnings presentation, 2006
Slide 1: Whitbread PLC Annual results 2005/6
Whitbread Welcome with a smile Whitbread PLC Annual results 2005/6
Slide 2: Anthony Habgood, Chairman
Whitbread Welcome with a smile Anthony Habgood Chairman
Slide 3: Christopher Rogers, Finance Director
Whitbread Welcome with a smile Christopher Rogers Finance Director
Slide 4: Summary
Summary 2005/6 2005/6 2004/5 % change Profit before tax from £181.1m £160.1m 13.1% continuing operations EPS on profit from 46.9p 37.6p 24.7% continuing operations EPS of continuing operations 46.0p 42.3p 8.8% on a proforma basis Proposed final dividend 19.95p 18.35p 8.7% Interim dividend 7.35p 6.90
Slide 5: Summary - continuing operations
Summary - continuing operations 2005/6 £m Revenue Profit from operations Central costs Other Interest PBT from continuing operations 2005/6 1,584.0 263.3 (23.4) 4.0 (62.8) 181.1 2004/5 1,450.5 247.1 (24.2) 9.8 (72.6) 160.1 % change 9.2% 6.6% 3.3% (59.2)% 13.5% 13.1%
Slide 6: Summary - continued
Summary - continued 2005/6 £m 2005/6 PBT from continuing 181.1 operations Taxation (57.0) Net profit from continuing 124.1 operations Discontinued operations 26.0 (Marriott, Maredo and BSD) Exceptionals 114.3 Profit for the year 264.4 2004/5 160.1 (48.5) 111.6 67.4 (10.8) 168.2 % change 13.1% 11.2%
Slide 7: Revenue by business segment
Revenue by business segment £m 2005/6 2004/5 % change Budget hotels 407.8 319.4 27.7% Sports, health & fitness 224.6 218.5 2.8% Pub Restaurants 605.0 596.7 1.4% High Street Restaurants 232.4 216.5 7.3% Other 114.2 99.4 14.9% Total group sales 1,584.0 1,450.5 9.2% * Costa and T.G.1.Friday’s
Slide 8: Like-for-like sales
Like-for-like sales Like-for-like sales 2005/6 Like-for-like sales 2004/5 % New Old New Old Premier Travel Inn 7.0 7.0 6.4 6.4 David Lloyd Leisure (0.6) (0.6) 3.6 3.6 Pub Restaurants (1.8) (1.8) 153 1.3 High Street Restaurants* (0.3) (3.7) 4.2 1.6 Total 0.4 (0.6) Oe 2.5 * Costa and T.G.|.Friday’s on
Slide 9: Profit from operations
Profit from operations £m Budget hotels Sports, health & fitness Pub Restaurants High Street Restaurants Profits from operations * Costa and T.G.1.Friday’s 2005/6 139.8 41.3 64.9 17.3 263.3 2004/5 107.2 49.3 73.8 16.8 247.1 % change 30.4% (16.2)% (12.1)% 3.0% 6.6%
Slide 10: Summary - continuing operations
Summary - continuing operations 2005/6 £m Revenue Profit from operations Central costs Other Interest PBT from continuing operations 2005/6 1,584.0 263.3 (23.4) 4.0 (62.8) 181.1 2004/5 1,450.5 247.1 (24.2) 9.8 (72.6) 160.1 % change 9.2% 6.6% 3.3% (59.2)% 13.5% 13.1%
Slide 11: Summary - continued
Summary - continued 2005/6 £m 2005/6 PBT from continuing 181.1 operations Taxation (57.0) Net profit from continuing 124.1 operations Discontinued operations 26.0 (Marriott, Maredo and BSD) Exceptionals® 114.3 Profit for the year 264.4 * Includes profit on disposal of business 2004/5 160.1 (48.5) 11
Slide 12: Discontinued
Discontinued Marriott, Maredo and BSD £m 2005/6 2004/5 Revenue 108.2 462.4 Profit 29.3 79.4 Interest (0.7) (1.5) Tax (2.6) (10.5) Profit after tax 26.0 67.4 « Includes 7 properties not in joint venture (1 disposed during year: Chiswell Street) « JV formed in May - 2 months 100% owned, 10 months JV «
Slide 13: Exceptional items
Exceptional items £m Total net exceptional profit Comprising: Profit on disposal of businesses Exceptional costs (post-tax) Key cost items: Impairment continuing businesses Impairment Marriott Reorganisation costs Repayment of debenture 2005/6 114.3 208.1 (93.8) (35.2) (29.3) (10.8) (25.5)
Slide 14: Cash flow
Cash flow Group year-on-year by items £m 2005/6 2004/5 Cash generated from operations 335 440 Cash capital expenditure (230) (261) Disposal of fixed assets 19 65 Interest, tax and dividends paid (206) (189) Interest and dividends received 84 25 Other 15 2 Business cashflows 17 82 Additional pension
Slide 15: Capital expenditure
Capital expenditure £m 2005/6 2004/5 Premier Travel Inn 65 51 Pub Restaurants 54 AE High Street Restaurants 32 21 David Lloyd Leisure 43 59 Corporate 7 12 “201° 220° Marriott 29 48 Total 230 268
Slide 16: Cost control
Cost control « Key focus « 250 roles removed from staff functions benefiting central costs and brand overhead « Closing an office in Luton « Further opportunities as we become leaner and smarter
Slide 17: Other financial items
Other financial items « £400m returned to shareholders in May 2005 ¢ Further £400m to be paid in July 2006 ¢ Pension fund deficit £338m after triennial valuation; down from £346m in the prior year « £100m paid into pension fund over the year; next £50m paid August 2006 e £700m new 5-year bank facili
Slide 18: B share issue
B share issue e Choice of income or capital and timing « Share consolidation for earnings comparability ¢ Circular in May e EGMin June ¢ Return in July
Slide 19: Other financial items
Other financial items « £400m returned to shareholders in May 2005 ¢ Further £400m to be paid in July 2006 ¢ Pension fund deficit £338m after triennial valuation; down from £346m in the prior year « £100m paid into pension fund over the year; next £50m paid August 2006 e £700m new 5-year bank facili
Slide 20: Summary
Summary « Total sales of continuing Whitbread up 9.2% « Like-for-like sales up by 0.4% ¢ Profit before tax of continuing Whitbread up 13.1% to £181.1m « Proforma EPS growth 8.8% « Final dividend up 8.7% to 19.95p, giving a full year dividend of 27.30p, up 8.1%
Slide 21: Alan Parker, Chief Executive
Whitbread Welcome with a smile Alan Parker Chief Executive
Slide 22: Agenda for 2006
Agenda for 2006 « Drive through operational improvement « Invest in leading brands to achieve disciplined growth « Continue tight cost control « Focus on brands with good growth prospects e Pub Restaurants e Focus on high-returning joint sites e Disposal of solus sites « Review investments in T.G.1.
Slide 23: Premier Travel Inn Results 2005/6
Premier Travel Inn Results 2005/6 £m 2005/6 2004/5 % change Revenue 407.8 319.4 27.7% Profit 139.8 107.2 30.4% « Results include 52 weeks of Premier Lodge vs 32 weeks last year ¢ Underlying like-for-like sales growth of Travel Inn 7.0% ¢ Occupancy e Travel Inn 80.5% (vs 81.2% last year) e Premier Lo
Slide 24: Premier Lodge successful integration
Premier Travel Inn Premier Lodge successful integration 38 - £36.52 36 \\\u sill | £34.92 344 £33.28 | | ¥ | 32 - | £37.61 | £30.70 ay > —— | At acquisition 2004/5 year end 2005/6 year end Travel Inn & Premier Lodge
Slide 25: Premier Travel Inn: Another successful year
Premier Travel Inn Another successful year 160 ; 140 - 120 100 -; 2000/1 T T T T T 2001/2 2002/3 2003/4 2004/5 2005/6 | Profit =@= Rooms
Slide 26: Calendar of continuous improvement
Premier Travel Inn Calendar of continuous improvement 2000 2001 2002 2003 2004 2005 2006 Web bookings 100% Satisfaction Guarantee Business Account Card X sell Premier Lodge acquisition New bedroom design ‘Mini’ Premier Travel Inn launched * c.100 additional joint Pub Restaurant sites
Slide 27: Premier Travel Inn New bedroom
Premier Travel Inn New bedroom
Slide 28: Three key growth drivers
Premier Travel Inn Three key growth drivers « International ¢ Developing UK pipeline « Exploiting Pub Restaurant asset base
Slide 29: International
Premier Travel Inn International e 50/50 Joint Venture with Emirates e Identified 3 sites in Dubai ¢ Potential for 4,000 rooms Why the Gulf? ¢ Strong local partner (already partner with Costa) « First to market with budget hotel offer « Fast growth in travel and tourism « Strong inter-Gulf business
Slide 30: Developing UK pipeline
Premier Travel Inn Developing UK pipeline New room target of 45,000 rooms in UK by 2010 ¢ Conversion opportunities (eg Holiday Inn) « New builds with Pub Restaurants « Extensions to existing Premier Travel Inn sites
Slide 31: Exploiting Pub Restaurant asset base
Premier Travel Inn Exploiting Pub Restaurant asset base ¢ Currently 271 joint sites « Potentially c.100 new Premier Travel Inns on existing Whitbread sites « New re-engineered + 20-bedroom model e Same bedroom specification throughout brand
Slide 32: An outstanding combination
An outstanding combination A Whitbread Pub Restaurant and budget hotel Three reasons for superior industry returns « Added value to Pub Restaurants « Competitive advantage to Premier Travel Inn e Cost synergies to both
Slide 33: An outstanding combination
An outstanding combination Joint site model achieves higher sales, better margins and better returns on capital EBIT margin — 858 162 19% 6.5% Joint sites (Pub Rest 22% only) Joint sites S eenian 553 31% 12.9% Travel Inn)
Slide 34: Pub Restaurants Results 2005/6
Pub Restaurants Results 2005/6 £m 2005/6 2004/5 % change Revenue 605.0 596.7 1.4% Profit 64.9 73.8 (12.1)% ¢ (1.8)% like-for-like sales decline driven by covers decline ¢ Significant year-on-year cost growth; utilities, rates and NAW
Slide 35: Opportunity for sustainable volume growth
Pub Restaurants Opportunity for sustainable volume growth Focus on key areas « Food e Continuous improvement in quality and related value for money e Environment e Continued roll out of revised format Beefeater and trials of new concept Brewers Fayre e Service e Successful Science of Service rolled
Slide 36: Beefeater: New menus drive covers volume
Beefeater New menus drive covers volume Adult restaurant covers 10% - === Moving Annual Total covers vs March 2003 === Moving Quarterly Total vs prior year
Slide 37: Pub Restaurants New concept Brewers Fayre
Pub Restaurants New concept Brewers Fayre
Slide 38: Brewers Fayre year-on-year performance
Pub Restaurants New concept Brewers Fayre Year-on-year performance 60 - 50 - 40 + 30 - 20 - 10 0 11-15 16 - 20 21-25 Sales @ Covers
Slide 39: David Lloyd Leisure Results 2005/6
David Lloyd Leisure Results 2005/6 £m 2005/6 2004/5 % change Revenue 224.6 218.5 2.8% Profit 41.3 49.3 (16.2)% e Like-for-like sales at (0.6)% « Like-for-like membership at UK clubs closed at 302,679; higher than opening position and highest level in the year ¢ Total membership now at a record of 36
Slide 40: Building membership
David Lloyd Leisure Building membership « New sales training and incentive programme « Increased local sales and marketing activity e Improved new member welcome programme « Strong new club performance ahead of target e Kings Hill, Southend added 8,800 new members to estate « Non-UK club membership
Slide 41: Retention - improving the member experience
David Lloyd Leisure Retention - improving the member experience « New brand standards and mystery audit ¢ Enhanced member products and facilities e Fast track tennis e Personal training e Weight management programme e Food and beverage offer « 4% increase in membership satisfaction since September 2
Slide 42: Early days but encouraging signs
David Lloyd Leisure Early days but encouraging signs Members Current like-for-like UK clubs 323,500 5 membership 318,500 - 313,500 - 308,500 - 303,500 - 298,500 + 293,500 Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar 2004 2005 2006
Slide 43: Costa Results 2005/6
Costa Results 2005/6 £m 2005/6 2004/5 % change Revenue 143.0 126.1 13.4% Profit 13.3 10.6 25.5% « Like-for-like System sales in UK Retail business growth by 8.9% « UK’s most profitable coffee shop chain - profits up by 25.5% ¢ 146 new stores opened - 94 UK, 52 international « Total stores up 29% Sys
Slide 44: Outstanding sales and profit growth
Costa Outstanding sales and profit growth 2001/2 2002/3 2003/4 2004/5 2005/6 | Profit == Sales
Slide 45: Number one in the coffee shop market
Costa Number one in the coffee shop market General Quality Recommend Satisfaction impressions Costa Mi Caffé Nero @ Starbucks @ Coffee Republic
Slide 46: Fastest growing UK coffee shop brand
Costa Fastest growing UK coffee shop brand 2002/3 2003/4 2004/5 2005/6 2006/7 estimated Retail equity @ Franchise UK @ Franchise overseas
Slide 47: Ambitious growth
Costa Ambitious growth e Potential to double brand « Rapid development of franchise operation overseas e 2005/6 entered India, Pakistan, Cyprus e 2006/7 plans include Turkey, Eastern Europe, China « Growth through partnership - eg Virgin Atlantic
Slide 48: Conclusion - continuing Whitbread's evolution
Conclusion - continuing Whitbread’s evolution « Continued success story e Premier Travel Inn and Costa e Turnaround e David Lloyd Leisure e Pub Restaurants (joint sites) e Exit standalone Pub Restaurants e Review franchised restaurant brands « Reshaping Whitbread
Slide 49: Whitbread PLC Annual results 2005/6
Whitbread Welcome with a smile Whitbread PLC Annual results 2005/6