Slide 1: FY22 Interim Results
FY22 Interim Results 26 October 2021
Slide 2: Contents
Contents Operating and business review Alison Brittain p3 Financial review Nicholas Cadbury p22 2
Slide 3: H1 highlights
H1 highlights • H1 recovery ahead of expectations: • Premier Inn - significant outperformance of the UK market • Potential to reach full recovery in UK LFL RevPAR run rate at some point in 2022 • Expansion continuing in Germany with positive trends post reopening • Challenging operating and inflatio
Slide 4: Strong recovery in UK and Germany
Strong recovery in UK and Germany UK: Very strong leisure-led recovery post 17 May reopening 12 April: 17 May: 19 July: Bars and restaurants Indoor hospitality Virtually all allowed to serve allowed, sporting events restrictions removed customers outdoors commence Premier Inn UK Occupancy % accommod
Slide 5: UK market outperformance
UK market outperformance Strong brand and direct distribution driving material outperformance of the M&E market… Total sales outperformance vs. the M&E hotel market PI outperformance1 vs M&E 7.2% 11.1% 14.6% 14.7% 16.9% 9.5% 12.3% 14.1% Mar 21 Apr 21 May 21 Jun 21 Jul 21 Aug 21 H1 Q3 to date 3 PI ma
Slide 6: Leveraging our commercial model
Leveraging our commercial model HIGH SUMMER DEMAND ADAPTABLE PRICING STRATEGY July – August occupancy Price outperformance in areas of high demand Q2 Premier Inn KPIs – Cornwall, Devon and Channel Islands Growth vs FY20 vs the market1 ARR +58.6% +14.6pp Occupancy +4.3% +4.9pp RevPAR +66.1% +23.1pp T
Slide 7: Sales recovery ahead of expectations
Sales recovery ahead of expectations H1 FY22 DEMAND TIMING UNCERTAINTIES Leisure bounce Office-workers Ahead of expectations Demand returning Leisure events International inbound Ahead of expectations Early signs of recovery Business tradespeople Tradeshows (Germany) Resilient Potential to reach ful
Slide 8: Current environment presents further opportunity for outperformance
Current environment presents further opportunity for outperformance MARKET WIDE CHALLENGES BETTER PLACED THAN COMPETITORS Investing in our teams to drive productivity: • Rapid occupancy build-up • 5% increase in minimum pay rates VERY HIGH OCCUPANCY • Increased number of guests (families) per room •
Slide 9: Returning to pre-COVID UK profit margins
Returning to pre-COVID UK profit margins CAPITALISE ON STRUCTURAL OPPORTUNITIES AND COMPETITIVE ADVANTAGE Customer behaviour Competitive opportunities Initiatives ✓ Increased domestic tourism ✓ Accelerated independent decline ✓ Advantaged commercial model ✓ Resilient tradespeople demand ✓ Reduction
Slide 10: Long-term value creation: UK
Long-term value creation: UK UK’s largest hotel chain…by a clear margin1 UK’s favourite hotel brand…by a clear margin 81k Number of rooms 45k 19k 16k Winner of YouGov best value hotel chain for the 10th year running Premier Inn Travelodge Holiday Inn Express Ibis Scale delivers efficiency and custom
Slide 11: Multi-year UK growth and optimisation opportunity
Multi-year UK growth and optimisation opportunity CLEAR ROUTE TO 110k ROOMS OPTIMISATION OPPORTUNITY Adding >3k rooms every year • 8% of UK rooms are in hotels with less than 60 rooms (19% of our hotel estate) • 110k room pipeline equates to 36% estate growth opportunity • Creating an opportunity to
Slide 12: Investing to win: leading customer proposition
Investing to win: leading customer proposition ENSURING THE ESTATE REMAINS WELL INVESTED PREMIER PLUS: BROADENING OUR APPEAL UK refurbishment spend above pre-COVID levels > 2k Premier Plus rooms by the end of the year £m 70 60 Premier Plus refurbishment spend 50 Driving higher price and occupancy1 4
Slide 13: Investing to win: our people
Investing to win: our people Winner of Top Employer Institute Top Employer UK for the 11th year running Industry leading training and development programmes Keeping mental health and wellbeing front of mind • Team members undertook one million online training sessions during lockdown • Supported the
Slide 14: Investing to win: marketing
Investing to win: marketing “REST EASY” – MULTI-CHANNEL CAMPAIGN DRIVING BRAND CONSIDERATION Google search interest 120 100 80 60 40 20 0 Jan 21 Feb 21 Mar 21 Apr 21 May 21 Jun 21 Jul 21 Aug 21 Premier Inn Comp 1 Comp 2 Comp 3 Comp 4 Comp 5 • +c.250% Premier Inn Google searches post campaign launch,
Slide 15: Investing to win: enhanced business offering
Investing to win: enhanced business offering Broadening addressable customer base ahead of full business demand recovery BUSINESS ACCOUNTS RELAUNCHED “BUSINESS BOOKER” PORTAL TRAVEL MANAGEMENT COMPANIES Broadening our reach with SMEs Enhanced user experience, look and feel Reaching new customers pre
Slide 16: Long-term value creation: Germany
Long-term value creation: Germany Building a national network Rapid expansion1 25000 24k 21k 19k 18k 20000 16k 16k 14k 14k 15000 • 24 hotels added since February 2020 10000 5k • 30 operational hotels 5000 • 43 pipeline hotels 0 Open Open & committed A platform to outperform and take market share Amb
Slide 17: A compelling proposition in a highly attractive market
A compelling proposition in a highly attractive market A HIGHLY ATTRACTIVE MARKET COMPELLING CUSTOMER PROPOSITION • Prime locations Market is 40% larger than the UK • Great quality • Great value Budget branded RevPAR had been growing at a faster rate than the UK pre-COVID • Appeals to leisure and bu
Slide 18: Building the Premier Inn brand in Germany
Building the Premier Inn brand in Germany FIRST STEPS IN NATIONAL BRAND BUILDING JOURNEY IMPROVING CUSTOMER SCORES 1 Launch of the first digital “Love at First Sight” campaign Average Average Housekeeping Service 88 90 +5.7% +5.4% Average Average Overall Hotel 88 94 +4.1% +3.5% Braunschweig Hamburg
Slide 19: A significant commitment to the German market
A significant commitment to the German market Capital invested and committed to date: >£900m1 Investing at least £250m2 and opening 2k-3k rooms every year Very confident in acquisition opportunities Expected returns 10-14%2 Disciplined capital investment to deliver good long-term returns 1: Exchange
Slide 20: Industry-leading sustainability and responsibility programme
Industry-leading sustainability and responsibility programme Being a Force for Good in all we do supports our vision of enabling people to live and work well ACHIEVEMENTS IN H1 FY22 Industry leading carbon CIPS awards winners emissions target set:: 8 commitments to drive greater Largest UK rollout i
Slide 21: Well positioned for long-term value creation
Well positioned for long-term value creation FOCUS ON OUR STRENGTHS TO ENHANCE CAPABILITY TO 1 GROW AND INNOVATE IN THE UK 2 GROW IN GERMANY 3 SUPPORT LONG-TERM GROWTH UK Germany UK + Germany ENHANCED STRUCTURAL OPPORTUNITIES BEST-IN-CLASS OPERATIONS Market supply contraction accelerating PI market
Slide 22: Financial Review
FINANCIAL REVIEW | Nicholas Cadbury – CFO 22 22 22
Slide 23: Financial highlights
Financial highlights COVID restrictions impacting H1, recovering ahead of expectations £m H1 FY22 H1 FY21 H1 FY20 Statutory revenue 661.6 250.8 1,084.0 • Statutory revenue was 39.0% behind H1 FY20, trading significantly ahead of the market in the UK, but impacted by Adjusted revenue 661.6 250.5 1,07
Slide 24: Financial highlights
Financial highlights Outperforming in UK, growing in Germany Premier Inn UK Premier Inn Germany H1 H1 H1 H1 H1 H1 £m FY22 FY21 FY20 £m FY22 FY21 FY20 Statutory revenue 650.6 245.0 1,074.3 Statutory revenue 11.0 5.5 3.7 Other income (excl. rental income) 65.3 85.5 6.6 Other income (excl. rental incom
Slide 25: Cashflow since the start of the COVID-19 crisis
Cashflow since the start of the COVID-19 crisis Strong H1 trading has improved cash outflow since March 2020 to c.£600m £m Benefit of c.£400m of Government support and UK business rates holiday H1 FY21: £444.2m inflow H2 FY21: £303.9m inflow H1 FY22: £(113.7)m outflow Operating Operating Operating O
Slide 26: Strong liquidity
Strong liquidity Provides flexibility to invest Net (debt) / cash movement Uses of cash £m • Capex FY22: c.£350m Net debt at start of year (46.5) Cash flow (113.7) • Capex FY23: c.£350-450m Debt repayment 220.4 • Acquisitions in Germany Net cash at end of H1 60.2 • Debt repayments in H2 of £25m and
Slide 27: Strong balance sheet: asset backing
Strong balance sheet: asset backing ASSET BACKED BALANCE SHEET OPERATIONAL AND FINANCIAL FLEXIBILITY • Property estate last valued in 2018: Freehold Leasehold • Individual sale and leaseback basis • Yield range: 4.5% - 5.0% UK Open estate 59% 41% Total estate 55% 45% (open and committed) • Rent cove
Slide 28: Cost base efficiency
Cost base efficiency Strong track record of material cost savings and offsetting inflationary pressures 3-year £100m efficiency programme FY17 £37m FY18 £70m FY19 £83m FY20 £45m • International procurement FY21 £40m1 + flexible labour model benefits • Site optimisation • Aligning hotel and restauran
Slide 29: FY22 guidance and current trading
FY22 guidance and current trading FY22 GUIDANCE FY22 guidance was set out in detail in our FY21 full year results in April. Sales sensitivities remain unchanged, and cost guidance is updated for the following cost and capacity changes: • UK total sales ahead of expectations, driven by: • additional
Slide 30: H1 highlights
H1 highlights • H1 recovery ahead of expectations: • Premier Inn - significant outperformance of the UK market • Potential to reach full recovery in UK LFL RevPAR run rate at some point in 2022 • Expansion continuing in Germany with positive trends post reopening • Challenging operating and inflatio
Slide 31: Appendices
APPENDICES I Additional slides p32 II Definitions p35 III Supplementary information p36 IV Cautionary statement p37 Whitbread ADR programme – WTDBY Whitbread has established a sponsored Level I American Depositary Receipt (ADR) programme for which Deutsche Bank perform the role of depositary bank. T
Slide 32: Appendix I | Broad customer reach
Appendix I | Broad customer reach Over-indexing in UK regions, Over-indexing in domestic Even split of leisure and Broad business mix is resilient that will recover faster than demand that will recover business customers London faster than international Regions vs London Domestic vs Inbound Leisure
Slide 33: Appendix I | Premier Inn is the strongest hotel brand in the UK
Appendix I | Premier Inn is the strongest hotel brand in the UK Standout customer brand scores in the market 1 2 35 Metric Variance 1st to 2nd Hilton 30 2020 2019 Satisfaction 39.5 1st 18.9 Marriott 2018 25 Impression 39.0 1st 11.9 Value 39.6 1st 14.9 Improvement YOY Quality score 20 in both metrics
Slide 34: Appendix I | Robust liquidity and a strong balance sheet
Appendix I | Robust liquidity and a strong balance sheet Balanced debt maturity profile 1, 2, 3 Private Placement Undrawn RCF £m Public Bond (uncovenanted) Green Bond (uncovenanted) 800 £950m until Dec 21 £850m until Sep 22 £725m thereafter 600 400 Repaid September 2021 Mature in FY22 200 0 2021 202
Slide 35: Appendix II | Definitions
Appendix II | Definitions Accommodation sales Premier Inn accommodation revenue excluding non-room income such as food and beverage Adjusted basic EPS Adjusted profit / loss attributable to the parent shareholders divided by the basic weighted average number of ordinary shares Adjusted EBITDAR Profi
Slide 36: Appendix III | Supplementary information
Appendix III | Supplementary information Further information is available in a supporting supplementary information pack (in Microsoft Excel format) from www.whitbread.co.uk/investors/results-reports-and-presentations. This information includes: A. Hotel and restaurant estate B. Financial summary, K
Slide 37: Appendix IV | Cautionary statement
Appendix IV | Cautionary statement Nothing contained in this presentation is intended to constitute an offer, invitation or inducement to engage in an investment activity for the purposes of the prohibition on financial promotions under the Financial Services and Markets Act 2000. In making this pre