Sir John Banham

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 187.0 173.8 7.6
• 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
• ROCE
  8.7 8.7

After amortisation of goodwill
5
Segmental analysis

• 
  m
  m
• 
  
  2001/2
  2000/1
  Sales EBITDA
  Profit Assets Sales
  EBITDA Profit Assets
• Hotels
• Marriott/Swallow 405 112 72 1,234 403 116 79 1,20
  0
• Travel Inn 177 75 60 482 158 70 56 424
• Restaurants
• Pub restaurants 576 100 71 769 543 96 68 779
• High St restaurants 498 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
  pl 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
New accounting issues for 2002/3FRS17

• 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 MarriottSeptember 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
Core MarriottRoom yield premium maintained
Rooms yield and premium, March 01 - February 02

Source PKF
23
Core MarriottProfit per room closing the gap
Source Whitbread estimates
24
MarriottValue drivers non room revenue

• Leisure 10
• Golf 8
• FB 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
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. Fridays 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