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premier travel inn the acquisition of Premier Lodge and 19 pub restaurants

Whitbread PLC. premier travel inn the acquisition of Premier Lodge and 19 pub restaurants . July 2004. Alan Parker. chief executive, Whitbread PLC. Premier Lodge the transaction. £536.2m acquisition £505m acquisition of 132 hotels + 9 development sites

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premier travel inn the acquisition of Premier Lodge and 19 pub restaurants

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  1. Whitbread PLC premier travel inn the acquisition of Premier Lodge and 19 pub restaurants July 2004

  2. Alan Parker chief executive, Whitbread PLC

  3. Premier Lodgethe transaction • £536.2m acquisition • £505m acquisition of 132 hotels + 9 development sites • £31.2m acquisition of 19 pub restaurants • Earnings enhancing in first full year (2005/6) • To generate 10%+ return on investment in second full year (2006/7)

  4. premier travel inn • Clear leader in growth sector • Platform for strong sales growth • increase occupancy in acquired hotels • reduce discounts and improve overall sales mix • Cost synergies

  5. premier travel inn • The UK’s biggest hotel brand • 461 locations* across the UK • 29,141 bedrooms* * Includes hotels committed for development but not yet built

  6. Number of bedrooms 29,141 30,000 25,000 20,000 14,213 15,000 9,304 10,000 5,503 5,000 0 Premier Travel Travelodge Express by Ibis Inn Holiday Inn Travel Inn Premier Lodge Pipeline premier travel inn Source: Whitbread analysis of published company data

  7. premier travel innfast integration • Detailed integration plans in place: • People • Systems • Properties • Supply chain • New brand launch • Completed by March 2005

  8. Guests (millions) 6 17% CAGR 5 4 3 2 1 0 1999 2000 2001 2002 2003 Business Leisure a growth sector use of branded budget hotels

  9. 14% 12% 12% 10% 8% 6% 6% 4% 2% 0% Total accommodation Total hotels market an underdeveloped sectorbranded budget hotels as a percentage of total rooms available (UK) Source: Whitbread analysis of data from BHA/VisitBritain/University of Huddersfield

  10. premier travel innthe competitive edge • Strong product consistency • Nationwide coverage • World class reservation system • Transparent pricing • 100% Satisfaction Guarantee • Top quality pub restaurants

  11. David Richardson finance director, Whitbread PLC

  12. the pipeline Premier Lodgehigh quality assets Source: Vendor information

  13. Premier Lodgehigh quality assets • 48% of Premier Lodge rooms opened within last four years • 88% of lodges built or refurbished completely within last three years • 19 pub restaurants re-branded to Brewers Fayre by March 2005 Source: Vendor information

  14. the acquisitionassets Source: Vendor information * inc. long leases at peppercorn

  15. incremental capital employed

  16. incremental profit • Existing business • Underlying growth • Recent and new openings • Revenue enhancement • Cost synergies

  17. incremental profitexisting business Source: Vendor information

  18. incremental profitfrom recent and new openings * Based on 2003 profit contribution per room

  19. incremental profitrevenue enhancement • c.£8m additional PBIT through greater occupancy and sales synergies: • reservations • cross-sell • estate density • heightened consumer awareness Benefits accruing to both Premier Lodge and Travel Inn estates

  20. incremental profitcost synergies

  21. one-off costs

  22. a group perspective • Gearing (2003/4 pro forma) – 65%(38% pre-acquisition) • Interest cover (2003/4 pro forma) - 3.7 x(5.6 x pre-acquisition) • EPS enhancing in first full year (2005/6) • Return on investment to exceed 10% in second full year (2006/7)

  23. appendix

  24. key ratios

  25. key ratios Source: Whitbread PLC published accounts/vendor information

  26. premier travel innhotels and bedrooms * Spirit continues to operate an additional seven hotels (229 bedrooms) under a franchise agreement with Whitbread

  27. 30,000 25,000 20,000 15,000 10,000 5,000 0 1996/7 1997/8 1998/9 2000/1 2001/2 2002/3 2003/4 2004/5E 1999/00 Whitbread budget hotelsroom growth 1997-2005

  28. premier travel inn management biographies

  29. Career highlights • joined Travel Inn as managing director in 2003 • 2001-3: managing director, Costa Also • marketing & strategic planning director, Whitbread Restaurants • sales & marketing director, Whitbread Inns • managing director, Aramark Food Services Plc Age50 Mike Tye managing director, premier travel inn

  30. Career highlights • joined 2002 as finance director, Travel Inn Also • planning director, Pizza Hut • strategic finance project manager, Whitbread • PwC Management Consulting • several senior finance positions with Reckitt & Coleman Age37 Neil Cooper finance director, premier travel inn

  31. Career highlights • joined Travel Inn as sales and marketing director in April 2001 Also • joined Unilever in 1987 as a systems engineer before moving into marketing • gained widespread experience working across a number of food brands in different European markets • in August 98 promoted to marketing controller for margarine and spreads Age39 Gill Baker sales and marketing director, premier travel inn

  32. Career highlights • operations director - Managed Travel Inn • previously regional operations director for MTI’s North Also • strategic planning & business analysis manager (leisure division), The Rank Group • regional manager London & South, Odeon Cinemas Ltd • regional director, London & South, Odeon Cinemas Ltd Age33 Paul Flaum operations director, (managed) premier travel inn

  33. Career highlights • operations director for Travel Inn • 2 years operations director Brewers Fayre/Brewsters Also • 6 years with Hilton Hotels • 8 years with Forte Hotels • 13 years with Thistle Hotels – trainee to general manager • general manager White House Hotel, Herm, Channel Islands Age51 Darroch Crowford operations director, premier travel inn

  34. Career highlights • joined June 2003 as property director Also • head of acquisitions then head of development, Kingfisher • head of property, BAA • various senior positions in other leisure companies such as Rank/Luminar • developed property side of the BigW chain, Woolworths Age40 Deborah Parker property director, premier travel inn

  35. Career highlights • joined 2003 as HR Director – Travel Inn • HR director – Endeva Also • HR director Thorn Managed Services • head of HR – Thorn UK • compensation & benefits mgr, Thorn UK • Safeway Stores plc • Asda stores Age34 Tim Painter human resources director, premier travel inn

  36. Career highlights • joined in April 1998 as IT Director • previously business systems manager, finance services division, Whitbread Also • project accountant, services division, Whitbread • senior business consultant, Whitbread Age40 Susan Thomas systems director, premier travel inn

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