Slide 1: Interim results 2016/17
W H | T B R EA 'D) Interim results 2016/17
Slide 2: Disclaimer
Disclaimer ‘This presentation (the Presentation”) isprovidedon astrity privateand confident besisf cr inforrnation purpogescny By attending or rearing this Presentation y cuw ibe deernedttohawe agreedtothecbigatinsendresrictinnsset aut below. ‘Withoutthe expresspricrw ritten consent cf the Company,
Slide 3: Richard Baker, Chairman
WHITBREAD Richard Baker Chairman me —C“CtisSSCSCSCSCsi‘isY
Slide 4: Alison Brittain, Chief Executive
WHITBREAD Alison Brittain Chief Executive eee
Slide 5: Agenda
Agenda WHITBREAD Introduction Financials Strategic update Summary & Capital Market Day OWS
Slide 6: Delivering long term shareholder value
Delivering long term shareholder value WHITBREAD Build capability to support long term growth Grow and innovate Focus on our strengths in core UK to grow internationally [——— 85,000 c.£2.5bn 2020 growth @) Premier inn . COSTA rooms system sales Long term growth in earnings and dividends combined wit
Slide 7: Group highlights — a good first half
Group highlights — a good first half WHITBREAD Total Like for Profit Earnings Half year Returnon Leverage revenue likesales before tax” pershare” dividend capital £1.56bn £307.0m 133.88p 29.90p * Underlying profit before tax for 26 weeks to 1 September 2016 7
Slide 8: Nicholas Cadbury, Group Finance Director
WHITBREAD Nicholas Cadbury Group Finance Director C—C“C;isSCSC‘(SSCiS
Slide 9: Underlying profit before tax up 5.4%
Underlying profit before tax up 5.4% WHITBREAD £m H1 2015/16 Revenue 1,439.8 Profit from operations 316.7 Central costs (15.1) Underlying operating profit 301.6 Net finance cost (10.3) Underlying profit before tax 291.3 Basic underlying earnings per share 127.30p H1 2016/17 1,555.9 336.1 (16.4) 319.
Slide 10: Good revenue growth
Good revenue growth WHITBREAD Revenue (£m) H1 2016/17 Growth UK like for like Premier Inn 699.0 8.9% 2.4% Restaurants 289.1 1.5% 0.3% Total Premier Inn and Restaurants 988.1 6.6% 1.8% Costa - UK 500.2 10.3% 2.3% Costa - International 69.5 13.7%" Total Costa 569.7 10.7% Inter-segment (1.9) Group 1,55
Slide 11: Premier Inn — driving good total sales growth
Premier Inn — driving good total sales growth WHITBREAD % Regions London Total Underlying revpar (like for like) c.2.8 c.-3.6 c.1.4 Revpar (like for like) dilution from extensions c.-1.7 c.-0.7 c.-1.6 Reported revpar (like for like) 11 -4.3 -0.2 Impact from extensions 32 1.1 29 Food & Beverage” -0.5
Slide 12: Operating profit
Operating profit WHITBREAD Profit (£m) H1 2015/16 H1 2016/17 Change Premier Inn and Restaurants - UK, Ireland and Germany 252.4 274.7 8.8% Premier Inn International (3.0) (3.2) (6.7)% Total Premier Inn and Restaurants 249.4 271.5 8.9% Costa - UK 65.7 63.4 (3.5)% Costa - International 1.6 1:2. (25.0)
Slide 13: Margin progression — Premier Inn and Restaurants
Margin progression — Premier Inn and Restaurants WHITBREAD % 2.6 a 1.0 | 1.4 ea oF H1 2015/16 Like for like Efficiency and Labour and NLW Rent and Rates H1 2016/17 Investment H1 2016/17 inflation underlying before investment * H1 benefitted from — The cost programme which began in second half of las
Slide 14: Margin progression — Costa
Margin progression — Costa WHITBREAD % 1.2 16 EEE 0s H1 2015/16 Like for like and new Price Labour and NLW Inflation other stores * Previously indicated margin dilution 1.3% pts * Additional margin dilution 0.5% pts from — Strong margin performance in H1 last year — One-off implementation cost of ne
Slide 15: Profit after tax and exceptionals
Profit after tax and exceptionals WHITBREAD £m H1 2015/16 H1 2016/17 Change Underlying profit before tax 291.3 307.0 5.4% Pension finance cost - IAS 19 (9.1) (5.0) 45.1% Amortisation of acquired intangible (2.1) (1.2) 42.9% Profit before tax, pre exceptionals 280.1 300.8 7.4% Taxation* ETR 21.2% (FY
Slide 16: Strong funds from operations support capital investment
Strong funds from operations support capital WHITBREAD investment £m H1 2015/16 H1 2016/17 EBITDA*® 388 422 Working capital and share based payments (14) 9 Cash generated from operations 374 431 Product improvement and maintenance capital (86) (117) Operating cash flow after maintenance capital 288
Slide 17: A strong balance sheet
A strong balance sheet WHITBREAD 3,403 £m Maintained leverage ratios H1 2016/17* Net Debt Fen sion? Adjusted net debt: EBITDAR 3.3% ension Net debt: EBITDA 1.3x Lease commitments Net debt £988m (Rent x 8) Total debt funding facilities £1,700m Adjusted debt EBITDAR * Good headroom on leverage metrics
Slide 18: Capital expenditure driving future growth
Capital expenditure driving future growth WHITBREAD Cash capital (£m) H1 Premier Inn and Restaurants 269 Expansion capital - growing pipeline and room openings 177 + Acquisition of UK freehold properties - £24m + Freehold and leasehold construction and extension rooms - £124m + Germany and Premier I
Slide 19: Delivering good returns
Delivering good returns WHITBREAD Premier Inn and Restaurants Costa Group Adjusted 49.9% Sige 14.4% 14.8%) 48.2% 41.8% i : 15.3% 15.1% 12.9% 13.0% Reported returns H1 2015/16 FY 2015/16 H1 2016/17 H1 2015/16 FY 2015/16 H12016/17 H1 2015/16. FY 2015/16 H12016/17 * Adjusted returns amended to exclude
Slide 20: Interest, taxation and pension
Interest, taxation and pension WHITBREAD * Underlying interest charge of £12.7m (2015/16 £10.3m) £m H1 2015/16 H1 2016/17 Interest on borrowings (14.3) (18.2) Interest capitalised 4.0 5:5 Underlying net finance costs (10.3) (12.7) Effective interest rate 4.8% 3.7% * Effective tax rate in H1 of 21.2%
Slide 21: Financial considerations for the second half
Financial considerations for the second half WHITBREAD Premier Inn and Restaurants Costa * Revpar (like for like) dilution from extensions * Like for like sales growth H1 c.(1.6)%; FY c.(1.8)% assumption of 2-3% * Impact on like for like sales from extensions * 230-250 new stores for the full year,
Slide 22: Financial considerations for the second half
Financial considerations for the second half WHITBREAD * Full year capital spend of £650m-£700m * Good progress on sale and leaseback transactions — £100-£150m proceeds expected in year — Kings Cross hotel sold in June for £84m at c.4% yield, £46m proceeds received in June * Depreciation and rent ar
Slide 23: Current trading and outlook
Current trading and outlook WHITBREAD * Current trading in the early weeks of H2 — Premier Inn’s trading momentum has been similar to the first half — Costa continues to make good progress * Despite the economic uncertainty, at this early stage in the second half we expect to deliver in line with ex
Slide 24: Alison Brittain, Chief Executive
WHITBREAD Alison Brittain Chief Executive —C—“C;isCSCSCSCSC‘(‘iY
Slide 25: Strategy to deliver long-term shareholder value
Strategy to deliver long-term shareholder value 1) @) Premier Inn 24 J ————
Slide 26: Grow and innovate in the UK — Premier Inn and Restaurants
row and innovate in the UK and Restaurants GROW AND INNOVATE IN OUR CORE UK BUSINESSES Premier Inn * Total sales’ up +6.6%, profit before interest and tax up +8.9% to £271.5m * Rooms available +9.3% * Room openings - 1,171 H1; c.3,700 FY * Extensions working well, delivering good returns * Occupancy
Slide 27: London — high occupancy with rooms available up 12.1%
GROW AND INNOVATE IN OUR CORE UK BUSINESSES London — high occupancy with rooms @) Premier inn available up 12.1% 9 new hotels opened in last 12 months Strong demand with occupancy high at 86.8% New hotels performing well — Central London maturity < 1 year 11,500 rooms open, pipeline c.6,000 — 2020 e
Slide 28: hub — new hotels performing well
hub — new hotels performing well — 5 hub hotels now open (722 rooms) — London: Covent Garden, Brick Lane, Tower Bridge. Westminster (opened 24 October) — London ARR £86, occupancy 84% — Edinburgh: Royal Mile ARR £62, occupancy 78% * TripAdvisor score’ 4.5 across all sites 89% excellent or very good
Slide 29: Regions — good sales growth of 9.7%
O Regions — good sales growth of 9.7% @) Premier inn * 33 new hotels opened in the last 12 months * New hotels performing well — maturity 3-4 years and profitable in the first year * Hotels not extended grew revpar by c.3% * Extensions driving incremental like for like sales and good returns * Pipel
Slide 30: Offering customers a greater choice of locations
Offering customers a greater choice of locations ®)Premierinn Number of UK hotels H1 2013/14 to H1 2016/17: Winning market share * Total sales growth of c.40% — Premier Inn +86 hotels — Competitors +44 hotels * Rooms available increase c.25% * Occupancy growth of 2.3% pts to 82.6% * Returns’ growth
Slide 31: Premier Inn — drivers of success
Premier Inn — drivers of success @) Premier inn 87% direct booking to Customers have greater premierinn.com Digital Network choice of location direct strength distribution Premier Inn “ and : High occupancy Rectiurants Continue to rate 83% Patnenron grow UK rooms capital 14.8%" Dynamic pricing — Nal
Slide 32: Continuing to invest to maintain leading position
Continuing to invest to maintain leading position ©) Premierinn TV Radio Social Programmatic eCRM -SCAFFOLDERS* Bh ) ox
Slide 33: Premier Inn advertising
** AS Premier Inn Premier you Book direct at premierinn.com
Slide 34: Good progress in rebranding and rejuvenating our restaurants
Good progress in rebranding and » @ Beefeater; Way rejuvenating our restaurants B p Joint site restaurants increase Premier Inn revpar and returns * Good progress rejuvenating our brands in H1 — 113 Beefeaters under the new “Orange Cow” brand proposition — 7 Taybarns converted to Brewers Fayre H2 —
Slide 35: Costa
COSTA
Slide 36: Grow and innovate in our core UK businesses — Costa
GROW AND INNOVATE IN OUR CORE UK BUSINESSES System sales up 11.9% to £845.1m — UKsales up 9.5% to £655.6m — International sales up 12.1%* to £189.5m UK equity like for like sales up 2.3% New roastery opening 2017 — To underpin growth for next 20 years New Costa Express machines 754 H1; Gl 250:FY 124
Slide 37: We are building our innovation pipeline in food and beverage
We are building our innovation pipeline in COSTA food and beverage Demonstrating our coffee leadership with Creating a food range to complement our new hero beverage products handcrafted coffee H1: created ‘it’s all good’ range — offering customers real choice, trialled fresher food range in 13 stor
Slide 38: We have four tailored formats in development
GROW AND INNOVATE IN OUR CORE UK BUSINESSES We have four tailored formats in development COSTA Coffee with food Faster coffee Relaxed coffee COFFEE LOVERS COME ON IN AND EXPLORE atlE% : * H1: launched finer coffee * H1: Tested new food-led offer concept at Shelton Street with improved store layout *
Slide 39: Costa finer coffee shop
Costa Coffee shop ee | . ' RAB ARAB A Launched second finer coffee store in Wandsworth in October 2016 New finer coffee range — Single origin blend — Cold brew Extended food range New store design concept Longer opening hours — Evening hours — Small platters — Beer and wine
Slide 40: Channel development — driving new growth opportunities
Channel development — driving new growth COSTA opportunities * Our network plan shows plenty of white space in the UK * Future growth opportunities showing strong performanc — Drive Thru, Travel, Retail Parks — strong fundamentals * Strong UK store return on Capital >40% New store openings by channe
Slide 41: Continuing to invest to maintain leading position
GROW AND INNOVATE IN OUR CORE UK BUSINESSES Continuing to invest to maintain leading position COQTA BILLBOARD i i Brand adverts Showcasing POS, menu Flat White using our our brand board and wall giveaway, Baristas truths art package Masterclass rs Get ready for that feeling
Slide 42: Slide 42
Slide 43: Focus on our strengths to grow internationally
Slide 44: Premier Inn International
3 Premier Inn International :)) Premier Inn Withdrawing from India and South East Asia — Expected completion 2018 ¢ Maintaining presence in Middle East ¢ Expanding in Germany — Committed pipeline of 3 hotels opening in 2018/19: Munich, Leipzig and Hamburg — First hotel in Frankfurt opened February 2
Slide 45: Focus on our strengths to grow internationally
FOCUS ON OUR STRENGTHS TO GROW INTERNATIONALLY Guest feedback Booking direct Achieves consistently Encouraging guests to book direct high eto elutes 68% of bookings are direct to online to the on TripAdvisor hotel, of which: oo TOOOCR * 27% through premierinn.de + 41% through premierinn.com ee Premi
Slide 46: Costa
COSTA
Slide 47: EMEI — investing to grow the brand
FOCUS ON OUR STRENGTHS TO GROW INTERNATIONALLY EMEI — investing to grow the brand * Poland — good performance — High single digit like for like sales growth — Ontrack to reach profitability in 2017 — 228 Costa Express machines performing well ¢ Franchise — strong growth — Profitable and growing — 71
Slide 48: China and Asia — a great long-term opportunity
China and Asia — a great long-term opportunity CO §TA Trading in a tough market * Focusing growth on core cities — Closing loss-making stores Enhancing brand presence — Newstore formats — Finer coffee and improved food — Greater digital capability * Singapore — 9 equity stores developing a localised
Slide 49: 6,000th Costa Express machine
* 6,000th Costa Express machine installed in September * 155 new international machines (c.120 Canada) * Launch of trials in Germany and the Netherlands — 647 machines in 9 international countries ¢ c.1,250 new machines in 2016/17 — 754 added in H1
Slide 50: 3 Whitbread
3) WHITBREAD CC
Slide 51: Build capability and infrastructure to support long term growth
BUILD CAPABILITY AND INFRASTRUCTURE TO SUPPORT LONG TERM GROWTH Invest to build Whitbread’s capability and WHITBREAD infrastructure Winning teams * Executive level restructure to support the business strategy — More effective Premier Inn and Restaurants management layers — Property represented on Ex
Slide 52: Sustaining margins over time
Sustaining margins over time WHITBREAD Cost inflation from Mitigating actions Maintaining value for mone * NLW plus wage inflation * Organic growth hilst optimisi . : (economies of scale and overhead whilst opumising price ° F&B efficiency) * Coffee FX and * Efficiency programmes gy commodity prices
Slide 53: Driving our digital capability
GROW AND INNC Driving our digital capability * Insourced digital capability to improve agility and retain intellectual property * Improved Premier Inn web traffic (+13%* and up 5.1% year on year) * Improved Premier Inn web conversion (up 10%)* * Launch new mobile application * Improved online bookin
Slide 54: Dynamic pricing
Dynamic pricing ® Premier inn _ * Automated Trading Engine rolled out in June 2016 * Developed based on unique IP * Improving pricing proposition by eradicating pricing failures e.g. price surges * Growing occupancy in new hotels quickly ¢ Full benefit expected 12-18 months * Forecasting ability imp
Slide 55: Driving our digital capabilities — Costa
GROW AND INNOVATE IN OUR CORE UK BUSINESSES. Driving our digital capabilities COSTA Costa Coffee Club Mobile payment + 5.1m active members* COSTA Costa were launch partners for Android Trial Costa Collect October 2016 + Now over 400,000 Pay (May) and Apple Pay (June) in 10 stores = active App member
Slide 56: Half year highlights good together
} Half year highlights good together Teams and community Customer well being Energy and environment Winner of the prestigious Costa £7m raised for target to i GOSH for reduce added Ae ele eal Premier Inn sugar in drinks at the Clinical Building by 25% by 2020 BITC Responsible apices Business Awards
Slide 57: Delivering long term shareholder value
Delivering long term shareholder value WHITBREAD Build capability to support long term growth Grow and innovate Focus on our strengths in core UK to grow internationally [——— 85,000 c.£2.5bn 2020 growth @) Premier inn . COSTA rooms system sales Long term growth in earnings and dividends combined wit
Slide 58: Q&As
Slide 59: Capital Market Day agenda
Capital Market Day agenda 11.00 Arrival: tea/coffee 11.30 Welcome 12.00 @ Premier Inn 13.45 Lunch 14.45 COETA 16.30 Property strategy 17.00 Drinks and canapés
Slide 60: Appendix
Appendix
Slide 61: Standard information
Standard information WHITBREAD General Average 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 Premier In
Slide 62: Standard information — Premier Inn and Restaurants
WHITBREAD Standard information Premier Inn and Restaurants TOTAL - Hotels & Restaurants Sales Premier ln Sales - Restaurants Sales - Total Revenue re are EBITDA {rom Operations Underlying operating profit Segmental Net Assets Retusn on Capital Cash - Capital Expenditure - Total” Cash - Business comb
Slide 63: Standard information — rooms and hotels
WHITBREAD Standard information Premier Inn and Restaurants continued Number of Rooms Solus = + Managed 37,786 34,165 37,100 Associate 282 282 282 - Franchise & Management Contract 194 194 194 Total Salus 38.262 | 34,647 37,576 Joint Sites 27,508 25,316 27.023 Total UK & Ireland 65,770 59,957 64,599
Slide 64: Standard information — Costa
WHITBREAD Standard information Costa System Sates - Total tm Sales - Total ém 569.7 5146 4,403.2 EBITDA from Operations tm 9.7 98.2 215.6 Underlying operating profit én Ab 673 193.5 Segmental Net Assets tm 3614 306.2 307.6 Cash - Capital Expenditure - Total ' én 0.3 402 102.5 Cash - Business combina
Slide 65: Diverse and flexible funding
Diverse and flexible funding WHITBREAD ™ Committed bank * Funds from operations (EBITDA £422m) Pat * Uncommitted money markets lines: £120m ee Committed bank facility: £950m, 2021 — Option to extend +1 year ™Uncommitted MM US private placements (USSPP): £258m"* Committed funding maturity (Em) 2017-2
Slide 66: Kings Cross sale and leaseback
Kings Cross sale and leaseback WHITBREAD * Sale and leaseback with Legal and General completed on sale of 389 room Hub by Premier Inn hotel in Kings Cross (due to open in 2017) in exchange for a 25 year lease agreement * Legal and General will pay £84.5m in cash for the property with an initial paym
Slide 67: Exceptional items
Exceptional items WHITBREAD £m H1 2015/16 H1 2016/17 Premier Inn international exit costs - (35.0) Restructuring costs - (10.7) Interest on exceptional tax and the unwinding of discount rate on (0.3) (0.4) provisions : Intangible assets accelerated amortisation (10.1) _ - on IT software for which th
Slide 68: Current estate and pipeline
Current estate and pipeline WHITBREAD Premier Inn Estate at H1 2016/17 2016/17 Week 26 pipeline c. 65,700 rooms c. 14,000 rooms a 54,200 a 8,000 => 33 6,000 11,500 London Regions London Regions * 63% of current estate is freehold (Region 67%, London 47%) * Post completion of the c. 14,000 room pipel
Slide 69: Structural growth opportunities remain strong
Structural growth opportunities remain strong = @)Premierinn Total UK hotel market 684,000 676,000 688,000 700,000 721,000 += 740,000 New model assumptions rooms * Supply — Branded budget c.+6% p.a. including Premier Inn — Independents c.-1% p.a. Budget branded 18% 22% 24% Other branded Independents
Slide 70: Strength and breadth — HY 2016/17
Strength and breadth — HY 2016/17 COSTA UK Retail Equity stores Individual franchise Costa Enterprises Costa Express Corporate Partnerships Costa EME! Europe, Middle East and India Costa Asia China and South East Asia * At constant FX system sales, reported grew 21 f ‘y f System sales System sales S