Brian Wallace Group Finance Director

1
Brian WallaceGroup Finance Director
2
Hilton Group plc - Summary of Performance
Year to 31st December 2000 m
Proforma year to 31st December 1999 m
Hilton International Betting Gaming Central
costs and income Operating profit Goodwill
amortisation Interest Profit before
tax Tax Profit after tax
268.0 114.9 (11.6) 371.3 (36.9) (94.6) 239
.8 (57.2) 182.6
242.5 139.2 (21.4) 360.3 (28.1) (76.8) 255.
4 (64.1) 191.3
EBITDA before exceptional items 478.4
456.8 Profit before tax, goodwill,FRS15
exceptional items 301.2 305.0
1999 results have been adjusted to show the
effect of FRS15 depreciation as if it had been
charged in 1999.
3
Hilton Group plc - Exceptional Items
PL effect
Net asset effect
m
m
Profit on sale of UK Casinos Loss on termination
of Egyptian Casinos Loss on sale of non-European
betting and gaming businesses Impairment of
Belgium fixed assets
6.9 (10.4) (14.3) (25.6) (43.4)
52.7 (10.4) (14.3) (25.6) 2.4
4
Hilton International - Underlying Performance
Year to 31st December 2000 m
Proforma year to 31st December 1999 m
Increase
Operating profit as reported 268.0 242.5 10.5 Ne
t effect of property changes (9.3) (24.3) Inclusi
on of overheads treated centrally in
1999 - (10.0) Effect of treating Stakis as
acquired on 1 January 1999 - 19.9 Adjusted
operating profit Full Year 258.7 228.1 13.4
5
Hilton International
2000
1999 Proforma
Turnover Profit Turnover Profit
Revpar m m m m Growth
UK 606.4 156.3 516.2 148.8 10.5 Europe 553.7 68
.3 485.8 48.3 11.4 Middle Eastand
Africa 216.6 14.3 192.8 14.0 2.2 Asia /
Australasia 518.6 13.6 485.9 11.6 5.9 Americas 24
7.3 25.4 193.7 34.1 6.3 LivingWell 40.9 4.5 27.4
2.9 - 2,183.5 282.4 1,901.8 259.7
7.9 Central non-operating Items (14.4) (17.
2) 268.0 242.5 10.5
At constant currencies and including full 12
months of Stakis results.
6
Hilton UK Revpar vs The London Market
2000 Revpar growth
25
20
15
10
5
0
-5
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Source AA PKF
7
Hilton UK Revpar vs The Provincial Market
2000 Revpar growth
18
16
14
12
10
8
6
4
2
0
-2
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Source AA, PKF TRI
8
Hilton UK Year on Year Movement
Year on Year Increase
Comparable sales Comparable gross
profit Comparable PBIT
9
Top Ten UK and International Hotel Growths
Top 10 UK Hotels
Top 10 International Hotels
Growth
Growth
22.8
39.3
35.1
11.2
17.7
8.0
11.9
3.0
Revpar Gwth
PBIT Gwth
Revpar Gwth
PBIT Gwth
First Half
Second Half
10
Comparable Like for Like Gross Operating Profit
by Area
47.8
47.0
46.9
46.3
39.2
37.9
37.5
34.5
33.5
32.1
31.0
30.3
UK
Americas
ContinentalEurope
Total
Asia/ Australasia
Middle East Africa
2000
1999
11
Betting Gaming Profit Comparison
Telephone Betting / eGaming
Retail Betting
Americas
Casinos
Vernons
Total
m
m
m
m
m
m
1999 reported profit High roller
activity Sale of Golden Gate Fields Stakis
Q1 2000 reported profit Movement
12.5 2.6 15.1 14.1 (1.0)
6.1 6.1 5.6 (0.5)
10.4 (2.9) 7.5 8.5 1.0
91.0 91.0 94.6 3.6
19.2 (12.2) 7.0 (7.9) (14.9)
139.2 (12.2) (2.9) 2.6 126.7 114.9 (1
1.8)
12
UK Retail Betting - Comparative Analysis
Variancem
2000m
1999m
Turnover 1,642.9 1,667.2 (24.3) Gross
profit (including AWPs) 310.5 300.1 10.4 Gross
profit - including AWPs 18.9 18.0 0.9 -
excluding AWPs 17.3 16.4 0.9 Operating
costs (226.1) (215.8) (10.3) Operating
profit 84.4 84.3 0.1
13
Gross Betting Margin Before Costs ()
Full Year
2000
First Half
Second Half
2000
1999
Horses 15.2 16.1 15.6 15.1 Greyhounds 20.5 19.2
19.8 19.3 Numbers 29.0 29.4 29.2 28.5 Other
Sports 12.6 10.2 11.3 11.6 Football 21.3 24.8
23.0 18.1 Total 16.9 17.6 17.3 16.4
14
Analysis of Telephone Betting/eGaming profit
2000m
1999m
Variancem
UK - Telephone Betting 2.1 3.3 (1.2) -
eGaming (8.0) - (8.0) International - Elite
Telebetting 1.2 4.9 (3.7) - Other
Telebetting (1.9) (1.2) (0.7) - High Roller
activity 0.7 12.2 (11.5) - Internet
Betting (2.0) - (2.0) (7.9) 19.2 (27.1)
15
Telebetting Analysis
UK Telebetting
Gibraltar Call Centre
Gibraltar Elite
Total
2000 m
1999 m
2000 m
1999 m
2000 m
1999 m
2000 m
1999 m
Turnover Gross profit Costs Net profit
95.2 8.6 (6.5) 2.1
 129.8 9.9 (6.6) 3.3
 75.0  4.3  (6.2)  (1.9) 
 4.1 0.4 (1.6) (1.2)
 72.6  2.8  (1.6)  1.2 
 85.4  5.9  (1.0)  4.9 
 242.8  15.7  (14.3)  1.4 
 219.3  16.2  (9.2)  7.0 
Note Excludes high roller activity in Gibraltar
16
Telebetting Analysis
UK Telebetting
Gibraltar Call Centre
Gibraltar Elite
Total
2000 m
1999 m
2000 m
1999 m
2000 m
1999 m
2000 m
1999 m
Turnover Gross profit Costs Net profit No. of
calls Cost per call
95.2 8.6 (6.5) 2.1 2.5m 2.60
 129.8 9.9 (6.6) 3.3 2.6m 2.50
 75.0  4.3  (6.2)  (1.9)  1.2m  5.10 
 4.1 0.4 (1.6) (1.2) 39k 41.00
 72.6  2.8  (1.6)  1.2  67k  23.90
 85.4  5.9  (1.0)  4.9  60k  16.80
 242.8  15.7  (14.3)  1.4  3.8m  3.80 
 219.3  16.2  (9.2)  7.0  2.7m  3.40 
Note Excludes high roller activity in Gibraltar
17
Telebetting Analysis
UK Telebetting
Gibraltar Call Centre
Gibraltar Elite
Total
2000 m
1999 m
2000 m
1999 m
2000 m
1999 m
2000 m
1999 m
Turnover Gross profit Costs Net profit No. of
calls Cost per call Full yeargross profit Half
year gross profit
95.2 8.6 (6.5) 2.1 2.5m 2.60 9.0 7.9
 129.8 9.9 (6.6) 3.3 2.6m 2.50 7.6 6.9
 75.0  4.3  (6.2)  (1.9)  1.2m  5.10  5.7 3.4
 4.1 0.4 (1.6) (1.2) 39k 41.00 9.8 -
 72.6  2.8  (1.6)  1.2  67k  23.90 3.9 3.6
 85.4  5.9  (1.0)  4.9  60k  16.80 6.9 6.8
 242.8  15.7  (14.3)  1.4  3.8m  3.80  6.5 5.4
 219.3  16.2  (9.2)  7.0  2.7m  3.40  7.4 6.9
Note Excludes high roller activity in Gibraltar
18
Cumulative Internet Registrations
120,000
100,000
80,000
60,000
40,000
20,000
0
Feb
Mar
April
May
June
July
Aug
Sept
Oct
Nov
Dec
Jan
19
Sportsbook Margin Progression
20
15
10
5
0
-5
July
Aug
Sept
Oct
Nov
Dec
Jan
20
Group Cash Flow
2000 m
1999 m
Inflow from operating activities 462.0 363.2 Inter
est paid (103.9) (60.2) Tax paid (48.9) (58.5) Div
idends paid (123.5) (177.0) Free cash
flow 185.7 67.5 Capital expenditure (476.9) (358.6
) Proceeds from asset sales 22.0 244.5 Acquisition
s, disposals 244.4 (366.7) (24.8) (413.3) Exchan
ge other movements (12.7) 26.0 Opening net
debt (1,336.8) (949.5) Closing net
debt (1,374.3) (1,336.8)
21
Analysis of Capital Expenditure
Hilton
m
m
  Acquisitions Sydney 70.8
Caledonian 45.8 Dusseldorf 30.0 146.6 Ot
her Capital United Kingdom 147.3 Overseas 99.
8 LivingWell 30.8 277.9 Betting
Gaming Refurbishment/relocation 19.5
BS2000 EPOS system 8.5 Other 24.4 52.4
476.9
22
David MichelsGroup Chief Executive
23
Hilton International

• Worldwide revpar increase 1999 vs 2000 7.9
  (constant currencies and comparable Stakis)
• UK revpar increase 10.5
• Like for like UK 1st half 2nd half
• GOP conversion 46.5 49.0
• PBIT (7.0) 14.3 2000 1999 2000 1999 m
  m m m 68.6 73.8 92.7 81.1

24
Objectives
As at Interim Results 2000

• More falls to the bottom line
• These businesses are as customer friendly as we
  can make them
• That our physical hotel estate lives up to
  Hiltons perceived reputation
• That our eGaming investment is sensibly directed
• That we expand the group
• To improve the long term return on capital of the
  group as a whole

25
Openings and Pipeline

• Hotels No. of rooms
• Openings 2000 12 3,713
• Medina, Malta, Caledonian, Buenos Aires, Algiers,
  Budapest WestEnd, Dalian, Dubai Jumeirah, Hua
  Hin, Mauritius, Seremban, Tobago
• Pipeline 41 11,237Opening
  2001 20 5,162
• Incl Copenhagen, Sofia, Rhodes, Melbourne
  Airport, Dubai, Jeddah, Trafalgar Square,
  Paddington, Auckland, Moscow, Bangalore, Amman
• Opening 2002/2003 21 6,075
• Incl Dubrovnik, Philippines, Beirut, Xiamen, Sao
  Paulo, Lagos, Kuala Lumpur, Tahiti, Inchon

26
Customer Satisfaction
1999
2000
71
9
20
Independent research carried out for Hilton
International, based on a sample of over 8,100
respondents
Completely or Very Satisfied
Fairly Satisfied
Dissatisfied
27
Hilton International
Capital Expenditure

• Maintenance/mandatory 48.6 43.0Profit
  generating 205.4 132.2 254.0 175.2
• New builds/development 23.9 67.3Acquisitions 146.
  6 7.2
• Total 424.5 249.7

2000 2001 Actual Forecast m m
28
Major Projects
Amsterdam Hilton - Profit History
4
3
2
1
0
1997
1998
1999
2000
Note 2000 numbers are on a Pre FRS 15 basis
29
Hilton Alliance
Hilton HHonorsTotal members 10.5m 7.7mActive
members 5.3m 2.8m Hilton Reservations
WorldwideTotal worldwide 9.2m 7.8mhilton.com
worldwide 376k
149kHRW Hilton International 1.6m 1.2m Conrad
Joint VentureFamily of brands - Hilton Garden
Inn, Doubletree, Embassy, Hampton, Homewood, Red
Lion
2000 1999
30
LivingWell
Current Total Membership 125,000UK
112,500International 12,500 UK Development
2000/2001Clubs opened in UK in 2000 Clubs to
Open in UK in 2001 Hotel Premier Nottingham Peterb
orough (open) Caledonian Burton on Trent (open)
InvernessPremier BarnsleySutton Coldfield
York Carlisle Ashford
31
LivingWell
International Development 2000 / 2001

• Health Club
• Malta (open)
• Melbourne Airport
• Mersin
• Adana
• Dresden
• Berlin
• Mainz

• Premier Health Club
• North Sydney (open)
• Castlehill, Sydney (open)
• Brisbane (open)
• Carindale, Brisbane
• Sydney Hilton

• Bucharest
• Prague
• Dresden
• Bangkok
• Colombo
• Adelaide

32
Hilton International

• Property
• UK - 1.9 billion
• Overseas - 0.9 billion

33
Sale of Businesses
UK Ladbroke Casinos - non coreSold for 236.7
million vs 2000 PBIT 14.9 million Overseas
Gaming - non coreSold - Fort Erie Argentina
Peru San Pablo Card Club Pennsylvania
(conditional contract) Colorado (auction
process at advanced stage) To be sold - 2 Cairo
casinos
34
UK Betting Industry Environment

• Government review of a new betting tax regime
• Gambling Review Body to submit report to Home
  Office during summer
• Horserace levy agreed for 2001/02. Home Office
  consulting on a replacement scheme
• SIS in discussions with the Racecourse
  Association (RCA) over renewal of betting shop
  picture rights

35
eGaming Performance

• EBITDA break even achieved
• Further investment planned
• By end 2001 sustainable break even will be
  achieved
• Move into profit during 2002
• Sportsbook registrations 105,000
• Casino players 6,000
• Average cost customer recruitment 2000
  42.00 2001 29.00

36
eGaming Platforms
Platform
Media
Timing
Internet
Bet.co.uk
Launched February 2000
Ladbrokes.co.uk
Launched February 2000
Ladbrokes.com
Launched February 2000
Ladbrokescasino.com
Launched November 2000
Vernons.co.uk
Launched February 2001
Mobile
WAP
Launched August 2000
GPRS
Summer 2001
UMTS
2003
Digital TV
Cable

Telewest
Launched February 2000

CWC
Launched March 2000

Ntl
Launch April/May 2001
Satellite

Open
In Discussion

Sky (WAPTV)
Awaiting platform rates
Terrestrial

On Digital
Launched
37
eGaming Partnerships
Partner Activity Teamtalk Exclusive sportsbook
and casino link South ChinaMorning
Post Sportsbook and casino link Soccernet Worlds
largest soccer site exclusive sportsbook
link Cricinfo Worlds largest single sports site
Sportsbook and casino link Autosport.com Europe
s second biggest motor racing site Sportsbook
link Totalsports.asia.com Dedicated sales team in
KL generating affiliate deals for Ladbrokes
sportsbook and casino in Far East Playboy Provid
e sportsbook. One of the top ten most searched
words on the worldwide web
38
eGaming Future Developments

• Activity Planned 2001
• Flash casino games March
• Cantonese Casino April
• Ntl interactive TV service April
• Playboy sportsbook April
• Progressive casino games (blackjack/roulette/slots
  ) May
• High roller casino September
• Numbers games July
• Sportsbook next generation July
• Poker Million web site September
• Video streamed casino December

39
eGaming - Digital TV
2000 2004 (Fcast)
Homes Connected Satellite Sky/Open 4.
7m 7.2m Cable Ntl 0.5m 2.8m Telewest 0.3m 1.5m Te
rrestrial On-Digital 1.0m 3.3m 6.5m 14.8m
NB 1 million digital terrestrial homes via
OnDigital but only circa 50,000 currently
subscribe to OnNet boxes which enable Web access
(i.e. delivers a return path)