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Sir John Banham

Sir John Banham. Chairman. David Richardson. Finance Director. Year of transformation. Whitbread (continuing businesses). £m £m %

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Sir John Banham

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  1. Sir John Banham Chairman

  2. David Richardson Finance Director

  3. Year of transformation

  4. Whitbread (continuing businesses) £m £m % 2001/2 2000/1 Growth Sales including joint ventures 1,822 1,709 6.6 Operating profit before exceptionals* 249.5 235.6 5.9 Estimated interest (62.5) (61.8) PBT before exceptionals* 187.0 173.87.6 Estimated taxation (55.6) (55.3) PAT before exceptionals 131.4 118.5 10.9 Net assets employed (2000/1 estimated) 2,864 2,702 ROCE8.7% 8.7% * After amortisation of goodwill

  5. Segmental analysis £m £m 2001/2 2000/1Sales EBITDA Profit Assets Sales EBITDA Profit Assets Hotels Marriott/Swallow405 112 72 1,234 403 116 79 1,200 Travel Inn177 75 60 482 158 70 56 424 Restaurants Pub restaurants576 100 71 769 543 96 68 779 High St restaurants498 34 17 131 467 27 10 162 Sports, health & fitness David Lloyd Leisure 166 54 34 453 139 46 28 426 Total divisions 1,822 375 254 3,070 1,709 354 241 2,991 Britvic 16 16 56 13 13 48 Central costs (17) (21) (262) (13) (18) (336) Whitbread (continuing businesses) 374 249 2,864 354 236 2,702

  6. Segmental analysis • Travel Inn • Restaurants (excluding Travel Inn) • Pub restaurants • High Street restaurants • Pelican within High Street

  7. Year-on-year growth % % % % Total Like-for-like Profit Half Year sales growth sales growth growth profit growth Hotels Marriott 0.4 (0.1) (8.9) 5.7 Travel Inn 12.1 3.6 6.7 9.4 Restaurants Pub restaurants 6.1 5.6 5.5 10.0 High Street restaurants 6.7 3.3 64.1 19.2 Sports, health & fitness David Lloyd Leisure 19.4 14.6 22.4 24.0 Whitbread (continuing businesses) 5.9 9.4

  8. Operating margins/returns % Margins % ROCE 2001/2 2000/1 2001/2 2000/1 Hotels Marriott 17.7 19.5 5.8 6.6 Travel Inn 34.0 35.7 12.5 13.3 Restaurants Pub restaurants 12.4 12.5 9.3 8.7 High Street restaurants 3.4 2.2 12.9 6.4 Sports, health & fitness David Lloyd Leisure 20.9 20.4 7.6 6.6 Whitbread (continuing businesses) - - 8.7 8.7

  9. Transformation of the group £m £m Surplus over Exceptional book value p&l account Pubs and Bars Surplus over book value 477 0 Costs (25) (25) Net impact Pubs and Bars 452 (25) Pelican Write down (26) (26) Goodwill – (147) previously written off to reserves Reorganisation (2) (2) Net impact Pelican (28) (175) Other including taxation (2) (2) Surplus over book value/exceptional items £422m £(202)m

  10. Analysis of Whitbread cashflow £m £m £m Total Whitbread Former/post (continuing businesses) Whitbread Cashflow from operations 352 336 16 Dividends received 3 3 - Interest costs etc (72) (67) (5) Taxation (84) (37) (47) Capital expenditure (net) (224) (212) (12) Acquisitions and disposals 462 - 462 Dividends (128) (49) (79) Net cash inflow/outflow 309 (26) 335

  11. Strength of balance sheet Net assets £2,865m of which freehold property plus long leasehold £2,236m Net borrowings £976m Capital and reserves £1,889m Gearing 52% Interest cover based on proforma 4 times

  12. Dividend Whitbread (continuing businesses) PAT £131.4m Less minorities £(0.2)m Profit attributable £131.2m To give a 2.5x cover x 40% Dividend payable £52.5 No. of shares in issue at year end 295.4m Total dividend per share 17.8p Interim dividend per share 5.05p Final dividend per share 12.75p

  13. Things to watch for in 2001/2 • Accounting treatment of Pubs and Bars disposal • 10 weeks of Pubs and Bars profit • As a demerger (no profit on disposal) • £25m of transaction/seperation costs as non-operating exceptional • New capital structure • Share consolidation • c.£445m of Pubs and Bars cash for Whitbread • Deferred tax (FRS19) from interims • Future capital expenditure

  14. Capital expenditure £m £m 2002/3 2001/2 future estimates actuals Marriott 40 - 50 71 Travel Inn 65 - 75 71 Restaurants 50 - 60 71 David Lloyd Leisure 65 - 75 57 Other 10 3 Whitbread (continuing businesses) 230 - 270 273 Pubs and Bars - 14 Total group 230 - 270 287

  15. Newaccountingissuesfor2002/3FRS17 • Board plans to adopt for 2002/3 • Full notes in published accounts • Fund shortfall of £84m 7% of fund • Pension obligation in company books of £59m after deferred tax • Profit and loss charge in 2002/3, on FRS17 similar to 2001/2 on a SSAP 24 basis • Fund shortfall expected to eliminate itself in the mid-term as equity returns revert to long-term trend

  16. Summary • Year of transformation • Whitbread – performing well • Still plenty of opportunity!

  17. David Thomas Chief Executive

  18. Highlights • Like-for-like sales • Market out-performance • Brand strength • Progress on value drivers • £1.1bn returned to shareholders

  19. Hotels Total sales +3.7% PBIT -2.4% ROCE -0.6%

  20. MarriottKey results Total sales +0.4% Like-for-like sales -0.1% PBIT -8.9% ROCE -0.8%

  21. Core Marriott*September 11 effect First half Second half This year Last year This year Last year Occupancy 75.4% 77.0% 69.0% 73.0% ARR £83.34 £80.72 £80.20 £85.43 Yield £62.83 £62.24 £55.32 £62.33 * Branded for 2+ years

  22. 28% Core Marriott Average top 3 21% 20% Core MarriottRoom yield premium maintained Rooms yield and premium, March 01 - February 02 £ Source: PKF

  23. £k 10.6 Target Core Marriott Average top 3 Core MarriottProfit per room – closing the gap Source: Whitbread estimates

  24. MarriottValue drivers – non room revenue • Leisure +10% • Golf +8% • F&B +2% • Rooms -2%

  25. Marriott Value drivers – operational effectiveness • Core Marriott operating margin up 1.3% to 18.5% • Central overhead down 12% year-over-year • £10m cost reduction programme implemented

  26. Swallow Significant revenue progress Yield premium Pre acquisition Post conversion Tranche 1 -1% 10% Tranche 2 -7% 4% (6 months) • Like-for-like sales 2.4% (5.7% second half) • Full benefits for year 2003/4

  27. Travel Inn Key results Total sales +12.1% Like-for-like sales +3.6% PBIT +6.7% ROCE -0.8%

  28. Travel Inn Like-for-like ROCE grows year-on-year % 2000/1 2001/2

  29. Travel Inn Market leadership • Like-for-like occupancy 82.6% (core occupancy flat year-on-year) • Rooms growth 14,186  15,924

  30. Travel Inn Brand strength • Unprompted awareness up to 29% (from 18%) • Internet bookings up to 15% • 100% guarantee increased guest loyalty improved staff retention

  31. Restaurants Key results • Total sales +6.4% • Like-for-like sales +4.6% • PBIT +13.2% • ROCE +1.5%

  32. Beefeater Brewers Fayre/ Brewsters High Street RestaurantsProfit per sector

  33. Brewers Fayre/Brewsters Strong all round performance • Like-for-like sales +5.6% • Operating margin growth 14.8% 15.0% • Operating profit +9.6% • ROCE +0.9%

  34. Beefeater Positive like-for-like performance Segmentation programme impacts profit Comparable Beefeater • Sales +5.4% • Operating profit +12.6% Total Beefeater • Sales +5.2% • Operating profit -3.4%

  35. High Street Key results • Total sales +6.7% • Like-for-like sales +3.3% (excluding Pelican 5.1%) • PBIT +64.1% • ROCE 6.4% 12.9%

  36. High Street Improving returns Like-for-like sales Pizza Hut +6.0% Costa +5.7% T.G.I. Friday’s +4.4%

  37. High Street Improving returns • Operating margins up from 2.2% to 3.4% • Estate churn 94 sites acquired 69 sites sold

  38. Sports, health and fitness Key results • Total sales +19.4% • Like-for-like sales +14.6% (mature clubs 9.3%) • PBIT +22.4% • ROCE +1.0%

  39. £ David Lloyd clubs Market outperformance Average annual sales per member Source: Whitbread estimates

  40. David Lloyd clubs Member KPIs • Growth in members 18.0% • Member retention 73% • Member satisfaction 74.7%

  41. David Lloyd clubs Improving returns • Developing clubs • Contribution up £7.7m year-on-year • Reducing time to maturity • Average pre opening memberships – 1,397 • Improving mature club ROCE • 15.4%  16.2% (pre divisional overhead)

  42. David Lloyd clubs Improving returns • Utilisation • Yield management • Build costs

  43. David Lloyd clubs Pipeline secures future growth Epsom Brussels Bromsgrove Oxford Fulham Lisburn Kingston Southend Swindon Farnham

  44. Current tradingLike-for-like sales – 7 weeks Marriott -2% Travel Inn +6.4% Brewers Fayre +5.8% Beefeater +5.2% David Lloyd Leisure* +7.2% * 5 weeks only

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