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Successful brand management in the leisure industry

Successful brand management in the leisure industry. John Banham, chairman. Highlights. Strong trading performance Improving returns Winning brands Organic growth Healthy outlook. Successful brand management in the leisure industry. David Richardson, finance director. Keynotes.

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Successful brand management in the leisure industry

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  1. Successful brand management in the leisure industry

  2. John Banham, chairman

  3. Highlights • Strong trading performance • Improving returns • Winning brands • Organic growth • Healthy outlook

  4. Successful brand management in the leisure industry

  5. David Richardson, finance director

  6. Keynotes • Double digit profit growth • Strong cash management • Better returns

  7. Profit and loss account BEFORE EXCEPTIONAL ITEMS £m2003/4 2002/3 Divisional sales 923 910 +1.4% (less Pelican) - (23) Sales continuing businesses 923 887 +4.1% Operating profit (before amortisation) 165 155 +6.4% Interest (26) (30) PBTA 139 125 +10.7% Goodwill amortisation (4) (4) PBT (as reported) 135 121 +11.0%

  8. Dividends 2003/4 2002/3 Interim dividend per share 6.15p 5.57p +10.4% Interim adjusted basic EPS 31.99 28.91 +10.6%

  9. Divisional results %Total Like-for-like Profit Year-on-year growth sales sales Marriott/Swallow(1.2) (1.3) (12.0) Travel Inn +9.9 +3.5 +7.9 Pub restaurants +1.7 +3.3 +13.9 High Street restaurants +6.1 +2.7 +31.1 David Lloyd Leisure +12.7 +6.6 +11.7

  10. Divisional results (continued) %Margins MAT ROCE 2003/4 2002/3 2003/4 2002/3 Marriott (pre-amortisation)18.7 20.7 6.5 5.9 Travel Inn 33.5 34.2 12.8 12.8 Pub restaurants 17.4 15.5 11.0 9.3 High Street restaurants 3.9 3.1 19.4 16.7 David Lloyd Leisure 23.5 23.3 9.2 8.1

  11. Cash flow £m2003/4 2002/3 Cash flow operations 182 160 +13% Dividends from JVs and associates 4 6 Interest (27) (27) Tax (15) (23) Capex (net) (66) (67) Dividends paid (42) (38) Net cash inflow 36 11

  12. Exceptionals £m2003/4 2002/3 Property/business disposals: Beefeater (4) - Swallow (6) - Other 1 5 Curzons - (8) Financing costs (3) - Tax 23 - Exceptionals after tax 11 (3)

  13. Financial disciplines • Disclosure of key numbers • Focus on returns • Getting more from the assets • Higher returning assets

  14. £mFull years Half years 2000/1 2001/2 2002/3 2002/3 2003/4 Sales467 398 418 196 208 Profit 10 17 21 6 8 Assets 162 112 112 118 118 MAT ROCE 6.4 15.2 19.1 16.7 19.4 High Street restaurants - progress

  15. Things to watch for • Full year, not first half x 2 • Beefeater and Swallow disposals • New ERP system • Year end 4th March 2004

  16. £mActual Estimate half year full year Full year capex capex 2002 Marriott 24 35-40 27 Travel Inn 18 45-55 65 Pub restaurants 34 55-60 High Street restaurants 8 15-20 David Lloyd Leisure 15 40-45 54 Other 9 20-25 10 108 225-245 218 62 Capital expenditure

  17. Summary • Profit growth • Strong cash flow • Improving returns

  18. David Thomas, chief executive

  19. 200% 150% Whitbread 100% 50% 0% -50% -100% Total shareholder return – October 2000* to August 2003 Source: Datastream * Announcement of restructuring

  20. Highlights • Strong trading performance • Improving returns • Winning brands • Organic growth • Healthy outlook

  21. Marriott - relative outperformance Sales £194m (1.2%) Like-for-like sales (1.3%) Operating profit £32.2m (12%) MAT ROCE 6.5% Occupancy 72%

  22. £k 4.0 3.8 3.6 3.4 3.2 3.0 2.8 2.6 2.4 2.2 2.0 2002 2003 Marriott H1 Peer group, 6 months (M&C. De Vere, Hilton) Marriott-profit per room 6 MONTHS

  23. Travel Inn Sales £114m +9.9% Like-for-like sales +3.5% Operating profit £38.3m +7.9% MAT ROCE 12.8% Occupancy 82.5%

  24. £k per month 1,400 1,200 1,000 800 600 400 200 0 H1 2002/3 H2 2002/3 H1 2003/4 Travel Inn - on-line inventory cross-sell

  25. Travel Inn

  26. Rooms 25,000 20,000 15,000 10,000 5,000 * * * 1996/7 1997/8 1998/9 1999/2000 2000/1 2001/2 2002/3 2003/4 2004/5 2007/8 Travel Inn - sustained rooms growth *projected

  27. Pub restaurants Sales £307m +1.7% Like-for-like sales +3.3% Operating profit £53.4m +13.9% MAT ROCE 11.0%

  28. Pub restaurants - operating margin % H1 2003/4 H1 2002/3 Beefeater 13.4 10.3 Brewers Fayre19.7 18.8 Total pub restaurants 17.4 15.5

  29. £k 90 85 80 75 70 65 60 55 50 H1 2001/2 H1 2002/3 H1 2003/4 Pub restaurants - profit per outlet

  30. enjoy!Whitbread

  31. Beefeater - the next generation • Six trial sites operating since February • 30% sales uplift • 8 more sites in 2003/4 • Roll-out complete by 2006/7 • Target ROCE: 12% +

  32. High Street restaurants Sales £207.5m +6.1% Like-for-like sales +2.7% Operating profit £8.0m +31.1% MAT ROCE 19.4%

  33. High Street restaurants - UK growth agenda Outlets 2003/4 2008 Pizza Hut* 537 800 Costa 264 500 *Owned and franchised

  34. David Lloyd Leisure Sales £99.6m +12.7% Like-for-like sales +6.6% Operating profit £23.0m +11.7% MAT ROCE 9.2% Member retention 75% (MAT)

  35. David Lloyd Leisure - UK club pipeline • Oxford (opening February 2004) • Worthing • Exeter* • Southend-on-Sea* • Farnham* • Aberdeen* • Bristol* • Norwich* *subject to planning approval

  36. Trading update LIKE-FOR-LIKE SALES GROWTH (%)

  37. The opportunity - PBITgrowth potential • Management action • Brand distribution NB Figures identify areas of potential. They are not forecasts and exclude impact of inflation.They are incremental to 2002/3 operating profit.

  38. PBITgrowthpotential - management action* Marriott profit per room £28m • improved sales • Swallow to Marriott conversions • market uplift *By 2007/8

  39. PBITgrowthpotential - management action* Marriott profit per room £28m • improved sales • Swallow to Marriott conversions • market uplift Beefeater ROCE growth £14m • sales per outlet • operating margins *By 2007/8

  40. PBITgrowthpotential - management action* High Street brands £20m • operating margins • brand leverage *By 2007/8

  41. PBITgrowthpotential - management action* High Street brands £20m • operating margins • brand leverage David Lloyd Leisure clubs to maturity £15m • 19 developing clubs *By 2007/8

  42. PBITgrowthpotential - brand distribution* PBIT Capex £34m £290m £30m £210m £20m £200m Travel Inn to 25,000 rooms Brewers Fayre to 550 units David Lloyd Leisure to 75 clubs *By 2007/8

  43. The outlook • Growth markets • Leading brands • Performance management • Organic growth • Improving returns

  44. Successful brand management in the leisure industry

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