fy19 full year results april 2019 - whitbread

FY19 FULL YEAR RESULTS | APRIL 2019

FY19 Full Year ResultsApril 2019


Contents

Full year highlights Alison Brittain p3

Financial performance Nicholas Cadbury p5

IFRS 16 Nicholas Cadbury p13

Return of proceeds Nicholas Cadbury p16

Strategic update Alison Brittain p19

Appendices p34

2


Full year highlights | Significant strategic progress

Sale of Costa to The Coca-Cola Company for £3.9 billion completed with return of proceeds well underway1

Strong UK market share with current UK network of 76,000 rooms & committed pipeline of 13,000 rooms2

30% of total Premier Inn room pipeline now in Germany with c.7,000 rooms in committed network3

Strong progress made on the efficiency programme achieving £60 million with a further target of £220 million over next 3 years4

3


Cumulative efficiency savings over last 3 years

Strong discretionary cash conversion

Sale of Costa to The Coca Cola Company

Underlying basic EPS continuing operations

1.3% to 193.2p

£190m 4,008 new rooms opened in FY19

Strong ROCE from continuing operations*

Solid revenuegrowth*

Consistent profit from operations*

2% to £2bn

76,171 rooms

£499m

12.2%

Hamburg hotel opened Feb 2019

Direct bookings

Frankfurt reached mature occupancy

Frankfurt still #1 on TripAdvisor

68%

c.7,000 pipeline rooms

4.5 avg.

score

100%83% to£498m

£3.9bn

UK & Ireland Germany

Full year highlights | Resilient financial performance

*Includes International


FINANCIAL PERFORMANCE | Nicholas Cadbury – CFO

55 FY19 FULL YEAR RESULTS | APRIL 20195


FY18 FY19 𝚫

Revenue £2,007m £2,049m 2.1%

Underlying PBT £432m £438m 1.2%

Non-underlying items £(6)m £(178)m n.m

PBT £426m £260m (39.1)%

Underlying basic EPS from continuing ops. 190.7p 193.2p 1.3%

Profit from discontinued operations £93m £3,520m n.m.

Discretionary FCF* £585m £498m (14.7)%

Capital expenditure* £555m £557m £2m

Total continuing ROCE 12.5% 12.2% (30)bps

Lease-adjusted net debt to FFO* 3.3x (0.4)x (3.7)x

Full year dividend* 101.15p 99.65p (1.5)%

Financial highlights | Resilient financial performance

• Revenue growth delivered from new capacity addition

• Disciplined cost management

• Non-underlying items of £178 million primarily relate to separation of Costa at £108 million

• Profit from discontinued business from sale of Costa

• Good discretionary free cash flow conversion of 83%

• Strong ROCE, decreased due to timing of new capacity additions, investment in Germany & weaker UK market

6

*Includes discontinued operations


Operating performance | Resilient revenue & profit growth

• Revenue growth of 2.0% driven by capacity growth of 5.3% • Accommodation sales growth of 3.5%

- Regions +2.5%

- London +7.2%

• Weaker sales environment in H2 with accommodation sales growth of 1.9%- Regions +0.5%

- London +7.3%

• Interest benefit from Costa proceeds

7

FY18 FY19 𝚫

Revenue £2,007m £2,047m 2.0%

- UK & Ireland £2,000m £2,042m 2.1%

- Germany £4m £5m n.m.

- Middle East £3m £0m n.m.

Profit from operations £498m £499m 0.2%

- UK & Ireland £503m £508m 0.8%

- Germany £(5)m £(8)m n.m.

- Middle East £0m £(1)m n.m.

Unallocated central costs £(35)m £(33)m 5.4%

Interest £(31)m £(28)m 7.5%

Underlying PBT £432m £438m 1.2%

ROCE* 13.4% 12.7% (70)bps

Other metrics

UK total accommodation sales growth 7.1% 3.5%

UK F&B sales growth 2.5% (0.3)%

UK LFL accommodation sales growth 2.2% (0.6)%*Before interest & unallocated central costs


Margins & ROCE | Attractive & sustainable economic model

• Strong operating margins held at >24% despite weakening market environment and ongoing structural cost increases

• Cost efficiencies programme momentum continued

8

20.2

22.2

23.8

25.5

26.8

13.5% 12.9% 13.0% 13.4% 12.7%

0

0. 05

0. 1

0. 15

0. 2

0. 25

0. 3

0. 35

0. 4

0. 45

0. 5

9

1 1

13

15

17

19

21

23

25

27

29

FY15 FY16 FY17 FY18 FY19Room nights available (million p.a.) Return on capital

• Consistent Operating ROCE* despite room capacity growth of 32% since FY15 maintaining good premium to cost of capital

• Hotels under construction & not yet fully mature dilutes ROCE by c.120bps

Efficiency programme offsetting inflation Consistently strong ROCE* on a growing base

24.8%24.4%

3.2%

(0.1)%(1.1)%

(1.0)%

(0.6)%

(0.8)%

FY18 LFL + netnew

capacity

Labour +NLW

Inf lation Rent + rates Efficiency UK +internationalinvestment

FY19

*ROCE before unallocated central costs


Cash generation | Strong & consistent to fund investments

• Discretionary FCF used to fund:- Continuing business growth CapEx –

£311 million

- Pensions – £194 million (including £107 million towards the agreed settlement)

- Dividends – £187 million

£599m

£498m

£226m

£(10)m

£(1)m

£(192)m

£(34)m

£(90)m

EBIT

Depreciation &amortisation

Other non-cashitems

Working capital

MaintenanceCapEx

Interest

Tax

DiscretionaryFCF

9

431 504 569 592 622 5990

10 0

2 00

3 00

4 00

5 00

6 00

7 00

FY14 FY15 FY16 FY17 FY18 FY19WTB EBIT (£m) Discretionary FCF conversion (%)

93%87% 80%

90%94%

83%

Diverse & flexible funding options(continuing & discontinued

operations)


Investment | Compelling opportunities to re-invest capital

• Premier Inn’s maintenance capital upholds the estate’s consistent quality

• Significant investment in new UK capacity delivering strong ROCE

• Initial Germany ROCE < WACC to build scale

• Longer term Germany ROCE close to UK ROCE

FY18 FY19 Last 2 years

Maturity duration

Mature site-level

ROCE

Maintenance & product improvement

£118m £151m £269m - -

New hotels & extensions

- UK £227m £226m £453m 1-4 yrs 12 – 14%

- International £65m £85m £150m 3-5 yrs 10 – 14%

Continuing operations £410m £462m £872m - -

Discontinued Operations £145m £95m £240m - -

Total £555m £557m £1,112m - -

10


Capital discipline | Appropriate leverage ensures investment agility

11

Maintaining an appropriate leverage position

• Whitbread’s scale & diversity of operations enables low-cost funding from diverse sources

• Balanced maturity profile ensures stability

• Freehold to leasehold mix 62% : 38%

Diverse & flexible funding options

Lease debt

£2,[email protected]%

Bond£[email protected]%

RCF(unutilised)

~£[email protected]%

USPP£359m

@2.6-5.2%

Balanced debt maturity profile

Flexible source of

funds

£75m £84m200

450

£950m

2020 2021 2022 2025 2027

USPP Bond RCF (unutilised)• Careful management of debt levels provides good access to funds to support growth

• Investment grade metric maintained which supports the ability to secure good yields on leasehold sites

• FY19 net cash after pension contributions (£194 million), share buybacks (£170 million) and Costa proceeds (net £3.8 billion)

(Continuing + discontinued ops) FY17 FY18 FY19

Funds from operations (FFO) £883m £921m £902m

Adjusted net debt / (cash) £900m £843m £(2,573)m

Lease debt (8x rent) £2,058m £2,227m £2,193m

Lease-adjusted net debt / (cash) £2,958m £3,070m £(380)m

Lease-adjusted net debt : FFO 3.4x 3.3x (0.4)x


FY20 outlook | Investing to access structural growth opportunity

• UK economic & political environment, leading to weak hotel demand, especially in the regions

• March 2020 Midscale & Economy market declining- Regions (c.80% of PI sales) = (1.5)% total accommodation sales / (4.4)% RevPAR

• Good progress with the efficiency programme expected to deliver savings of £40-50 million, but £20-£30 million lower than higher cost increases of c.£70 million in the UK

• Operational dis-synergies following the sale of Costa of c.£10 million

• Germany losses of c.£12 million in FY20

Operating performance

12

• Continue to invest in growth with 4,000-5,000 new rooms to open in the UK & Germany

• Investing £200-300 million capital in UK growth at a good ROCE

• c.£700 million capital committed so far in Germany, with an investment ambition of £200-300 million a year going forward

• Investing c.£150 million per annum in maintenance and improvement

Investment


IFRS 16 | Nicholas Cadbury – CFO



IFRS 16 | Non-cash financial reporting changes in FY20

14

• New accounting standard for financial reporting of lease agreements

• To be adopted for periods beginning on or after 1 January 2019

• Whitbread adopting for FY20 – including interim reporting

• Whitbread’s leases fall into two main areas

- short, low-value leases (mainly cars)

- long, high value leases (c.350 hotels)

What’s not changing?• Revenue, non-rent costs, EBITDAR &

cashflow

• Unit economics & cash flow

• Approach to capital allocation• No detrimental impact on debt metrics &

covenant calculations expected

What’s changing?• Recognition of significant lease liability &

‘right of use’ asset on the balance sheet

• Rental charge in income statement replaced with non-cash depreciation & interest

• Impacts some key performance indicators

Background to IFRS 16


IFRS 16 | Significant changes to statutory financial reporting

15

Statutory reporting impact

• Indicative view of impact to statements based on leases as at the end of FY19

• Material impact to statutory reporting due to large volume of long-term property leases

• Lease liability and associated “right of use” asset recognised on the balance sheet using discounted cash flows

• Rental charge replaced with depreciation & interest

• Depreciation + interest not equal to cash rent in any year, detrimental impact on early years (further detail in Appendix II)

• EBITDAR & cash flow not impacted by IFRS 16

• EBITDAR and cash flow provides a more meaningful & predictable view of continuing operational performance

Indicative FY19 impactPre-

IFRS 16

Add lease liability

(+/- 100)

Add right -of-use asset

(+/- 100)Post-

IFRS 16𝚫

(+/- 100)

Total assets £7,904m - £2,100m £10,004m £2,100m

Total liabilities £(1,702)m £(2,500)m - £(4,202)m £(2,500)m

Net assets £6,202m £(2,500)m £2,100m £5,802m £(400)m

Indicative FY19 impactPre-

IFRS 16Remove

rent

Add dep. & interest

(+/- 10)Post-

IFRS 16𝚫

(+/- 10)

EBITDAR £795m - - £795m -

Rent & depreciation £(329)m £169m £(90)m £(250)m £79m

Underlying EBIT £466m £169m £(90)m £545m £79m

Net finance costs £(28)m - £(110)m £(138)m £(110)m

Profit before tax £438m £169m £(200)m £407m £(31)m

Balance sheet impact

Income statement impact


RETURN OF PROCEEDS | Nicholas Cadbury - CFO



Return of proceeds | At least £2.5 billion to be returned

17

At least £2.5 billion to be returned to shareholdersUse of £3.9 billion Costa sale proceeds

£3,900m

>£2,500m

£100m

£380m

£300m

c.£500m

Total proceeds

Separation &transactioncosts, tax

Pensioncontribution

CommittedGerman

acquisition

De-leveraging

Return toshareholders

Share buyback programme underway

1

Tender offer to launch post FY19 results

2

Review any surplus after tender offer

3

• Initial programme <£500 million

• £383 million repurchased so far

• Initial programme ends 10 May

• Any tender offer under-subscription to be reviewed

• Further buybacks & special dividends to be considered

• Tender offer commencing in June

• Subject to shareholder approval & other more value-creating alternatives


Return of proceeds | Buyback programme & tender offer

18

Costa Sale Completion3 January

Capital Markets Day13 February

Full-Year Results30 April

AGM & GM19 June

On-market buy-back Programme (up to £500m)

Review & return any further surplus capital

Buybacks started

17 January

Jan’19 Feb’19 Mar’19 Apr’19 May’19 Jun’19 Jul’19 Aug’19 Sep’19 Oct’19

• Commenced on 17 January and ending on 10 May

• Balancing efficient repurchases & volume

• As at 26 April total £383 million repurchased (7.8 million shares / 4% shares outstanding) Buy

back

pro

gram

me

• Pursuing a variable price tender offer

• Pricing based on VWAP of shares at closing of the offer period with price cap

• Inherent trade-offs:- exiting v continuing shareholders- price efficiency v subscription level

• Objective to set the right balance to maximise long-term value

Tend

er o

ffer

Tender offer circular

Tender offer

Tender offer completion


STRATEGIC UPDATE | Alison Brittain – CEO



Our mission | The world’s best budget hotel business

20

World’s strongest hotel brand

Best-in-class operations

~80%occupancy

UK’s favourite hotel

Strong financial performance

97% rooms booked directlyStrong return on capital

7% 10-year Sales CAGR

7% 10-year EBIT CAGR

83% cash conversion


Structural growth opportunity | Winning share in fragmented markets

21

59%52%

46% 43%

23%

24%

25%26%

12%15%

18% 19%

6% 9% 11% 12%

2010 2016 2020 Beyond 2020

Budget branded

Other branded

Independents

684k rooms 700k rooms 740k rooms >750k rooms

Actual Estimate

752 755 746 738 729 725 716 712

52 55 58 62 67 71 76 80

136 142 145 150 154 158 162 172

0

10 0

2 00

3 00

4 00

5 00

6 00

7 00

8 00

9 00

10 0 0

2010 2011 2012 2013 2014 2015 2016 2017

Independents Branded budget Branded non-budget

UK – winning share from under-invested independents

Germany – stand-out growth opportunity in Europe with 74% independent market share

Germany hotel demand (million room nights p.a.)


Our model | Rewards flexibility & through-cycle focus

• We have delivered long-term growth at good ROCE

• We performed well in the last recession

• Our structural growth opportunities & investment model provide long-term sustainable potential

• Continuing to invest to support our long-term ambition

158 187 205 209 234 255 247 283 296 313 348 401 447 468 498 499

820920

1,013 977 9741,062 1,096

1,1731,239

1,360

1,494

1,659

1,8221,908

2,007 2,047

12.4%

10.0%10.6%

11.7% 11.6% 11.5%10.9%

12.3% 12.4% 12.4%

13.3% 13.5%12.9% 13.0%

13.4%12.7%

0

0 .0 2

0 .0 4

0 .0 6

0 .0 8

0 .1

0 .12

0 .14

0 .16

0 .18

0 .2

0

5 00

10 0 0

15 0 0

2 00 0

FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19

EBIT (£m) Revenue (£m) Operational ROCE*

Premier Inn delivers long-term sustainable performance

*ROCE before unallocated central costs


Our model | Vertically integrated to deliver quality & value-for-money

Hotel industry value chainProperty

developmentProperty

ownership Brand Hotel operation

Inventory distribution

Premier Inn’s unique, vertically integrated modelDelivering quality & value-for-money for customers whilst creating value for shareholders

97% direct bookingLow-cost customer

acquisition & retention

End-to-end operationConsistent

execution of high

standards at low cost

Balanced freehold / leasehold

Large network, long tenure,

refurb control, estate mgt.

Our own brand

Consistent customer offering

Control & fund developmentOptimal hotel

location, design & layout

• Vertical integration enables consistent priorities in all value-creating activities

• Supports end-to-end focus on quality, service & value-for-money

• Provides domestic scale to ensure customer proposition delivered at a low cost

• Clear structural advantage over sub-scale competitor set


Our purpose | Delivering guests the best value-for-money

24

Inte

grat

ed

trad

ing

In-h

ouse

F&B

mod

elEv

eryd

ay

effic

ienc

yScale

advantageProperty flexibility

Operational control

• Leading value-for-money

• 97% direct booking

• Low-cost customer acquisition & retention

• Hot food in all hotels

• National breakfast offer

• Dinner flexed to local area

• Efficient operating structures

• Standardised model & rooms

• Ongoing opportunity to drive efficiency further

• Strongest hotel brand

• Largest UK network

• Economies of scale

• Superior network access

• Low-cost access to capital

• Best sites at local level

• All hotels operated by us

• High quality experience

• Consistent execution throughout the network


Solar panels

A force for good | Integrated throughout our operating model

OpportunityBeing a place where everyone

can reach their potential

CommunityMaking meaningful contributions

to the communities we serve

ResponsibilityTreating people and the planet

with respect

25

• WISE programme continues to grow and support apprenticeships and work experience placements

• Creating over 1,000 new jobs nationwide, supporting broad career progression

• Whitbread’s hotels are all powered by 100% renewable energy

• >20% of hotels have electricity generating solar panels

• Largest hospitality company in Europe to set a science-based carbon reduction target of 50% by 2025

• >£14m raised for the Premier Inn Clinical Building at Great Ormond Street Hospital (opened January 2018) + Sight & Sound Centre

• Progress towards Public Health England’s sugar reduction target of 20% by 2020


UK network strength | Sustainable growth at attractive ROCE

• Investing in new capacity delivers strong ROCE & good maturity

• Number of rooms increased 39% since FY14

• 1-4 year maturity duration depending on location

Strong unit economics combined with significant capacity growth (100 bed non-London hotel)

Detailed catchment

analysis

Balanced pipeline of

new capacity

Increasing proportion of the pipeline in

London

• >89,000 room committed network

• Postcode-level analysis

• Detailed mapping of existing supply & changes over time

• Optimisation of location and size

New catchments

43%

Low capacity

catchments30%

High capacity &

high demand

catchments27%

London37%

Regions63%

Updated line-of-sight to >110,000 UK rooms

12-14% mature site-level

ROCE

£m

Revenue 2.5

Rent (if leasehold) (0.6)

Other costs (1.2)

Freehold hotel profit 1.3

Leasehold hotel profit 0.7

Capital cost 9.3


Integrated trading | Driving higher quality net RevPAR

Acquisition channelGross

RevPAR impact

Customer acquisition

costs

Net RevPAR impact

% of bookings

Direct:PI.com Low

97%

Direct:App Low

Direct:Business booker Low

Direct:Non-Digital Low

Indirect:No commission channels (e.g. GDS)

Low

Indirect:Commission-based OTA

Highest

Delivering higher quality revenue• Domestic, short-stay guests have high travel

frequency

• Booking directly results in superior profitability through sustainably lower acquisition costs

• Vertically-integrated business model critical to maintaining high proportion of direct bookings

• Requires continued investment in customer proposition & digital capabilities

Rationally supplementing direct bookings• Finding customers in specific locations or inbound

tourists who are value conscious & new to Premier Inn

• OTAs remain least preferred route due to direct cost & transaction not through our website

• Balanced trading priorities between lifetime value of customer against acquisition cost

- =

27


Everyday efficiency | Delivering on extended ambition

28

Focused separation of CostaStrong delivery so far & ambition remains

£150m

£145m

£120m

£45m

£100m

Initial 5-yeartarget

FY17-19achievement

New 3-yeartarget

• Direct supply & supplier consolidation

• Product & service specification

• Supply chain

• Team productivity

• Significant work already delivered since Transaction announced- shared service teams re-aligned- 80% of supplier contracts

separated - IT separation scoping & started

• Scale of IT separation requires large part of ongoing Whitbread team

• IT separation work is significant but within our control to mitigate trading disruption or delays

• Ongoing cost recovery through TSA

Key focus areas

New focus areas

• Above-site overheads

• Controllable site costs

• Fixed costs (rent, D&A, rates)

• Site labour costs

Whitbread Costa

OpEx CapEx


Innovation | New formats have potential to increase UK runway

29

• Smaller, high-spec room design in city centre locations

• Enables Premier Inn to secure good ROC in high land value areas

• Price and value for money position maintained

• Innovative new format enabling further UK growth

• Simple rooms offered for customers seeking extra value

• Clear customer, product & price differential to core Premier Inn position

1,900 rooms in London & Edinburgh

1st hotel opened in Cardiff Feb’19

Pipeline and target cities

Oxford GlasgowBath Manchester

Committed(1,047 rooms) Target cities

London

2nd trial site

Southampton


Germany | Building a pipeline to replicate the UK’s success

30

Long-term opportunity to replicate UK successBuilding the German pipeline

OrganicTo be

acquired Total

Open and trading

2 hotels(390 rooms)

13 hotels(2,120 rooms)


Committed pipeline


6 hotels(990 rooms)


Total 19 hotels(3,990 rooms)



• Focus on Tier 1 cities

• Freehold & leasehold organic pipeline development

• Acquisitions to supplement or transform organic pipeline

Site selection • Use of freehold, leasehold and acquisition enables superior site access

Market-leading distribution

• Frankfurt and Hamburg hotels currently 100% direct

• Selective use of OTAs during expansionGreat value for

money• Premium economy proposition at stand-out

value

Unit economics vs Premier Inn UK (100 bed hotel)

Revenue £2.5m Higher

Rent (if leasehold) £(0.6)m Higher

Other costs £(1.2)m Similar

Freehold hotel profit £1.3m Higher

Leasehold hotel profit £0.6m Higher

Capital cost £9.3m Higher

Maturity 1-4yrs 3-5yrs

10-14% mature site-level ROCE


Ove

rsig

ht fr

om t

he U

K

M&AGrow market share through new site acquisitions & M&A

opportunities

Property Efficiently build & refurb hotels

OperationsDevelop high quality

operations & local sales team to drive consistency and customer retention

HR Hiring, developing & retaining the best people

Finance Disciplined capital allocation & strong cost control

LegalDriving compliance and

support to maximise speed of growth

Support from the existing UK infrastructure to take advantage of systems, knowledge and expertise

31

Germany | A new team to support a transformational year ahead

Local team structure to build a successful brand At least 20 hotels by the end of 2020

Acquired as part of Foremost Hospitality transaction

Organic expansion

Berlin x1 Hamburg x2Cologne x1 Heidelberg x1Dresden x1 Mannheim x1

Dusseldorf x1 Munich x1Essen x1 Nuremburg x1

Frankfurt x1Freiberg x1 (+6 more in FY21-23)

13 hotels >2,100 rooms

Essen x1 Munich x2Leipzig x1 Stuttgart x1

Hamburg x2

7 hotels >1,400 rooms

>20 hotels c.4,000 rooms

Currently openFrankfurt x1 Hamburg x1

2 hotels >400 rooms


Our plan | A proven strategy to create sustainable shareholder value

32

• Current network of 76,000 rooms & committed pipeline of 13,000 rooms

• Innovation supporting further capacity growth to >110,000 rooms

• Flexible capital structure to support growth

• Evolve business structure to deliver ongoing efficiencies

• Be a Force for Good

Focus on our strengths to grow

internationally

Optimise capability to support long-

term growth

Grow & innovate in core UK markets1 2 3

Creating long-term shareholder value through growth in earnings combined with strong return on capital

We have highly compelling long-term structural growth

opportunities

Our unique model delivers best-in-class performance &

enables growth

We are optimising our capital structure & capabilities to support long-term growth

• Replicate Premier Inn UK success in Germany

• Accelerate expansion organically & selective M&A


QUESTIONS | Alison Brittain & Nicholas Cadbury



Appendices

343434

I Definitions p35II Supporting IFRS 16 information p36III Supplementary information p37IV Cautionary statement p38

Whitbread ADR programme – WTDBY Whitbread has established a sponsored Level I American Depositary Receipt (ADR) programme for which Deutsche Bank perform the role of depositary bank. The Level I programme trades on the U.S. over-the-counter (OTC) markets under the symbol WTBDY (it is not listed on a U.S. stock exchange).



Appendix I | Definitions

Accommodation sales Premier Inn accommodation revenue excluding non-room income such as food and beverageAdjusted net debt Net debt adjusted for cash not readily availableAverage room rate (ARR) Accommodation revenue divided by the number of rooms occupied by guests

Direct bookings/ distribution Based on stayed bookings in the financial year made direct to the Premier Inn website, Premier Inn app, Premier Inn customer contact centre or hotel front desks.

Discretionary free cash flow Cash generated from operations after payments for interest, tax and maintenance capitalEBITDA Underlying earnings before interest, tax, depreciation and amortisation excluding income from Joint Ventures and AssociatesEBITDAR Underlying earnings before interest, tax, depreciation, amortisation and rent, excluding income from Joint Ventures and Associates.Food and beverage (F&B) sales Food and beverage revenue from all Whitbread owned pub restaurants and integrated hotel restaurantsFunds from operations (FFO) Net cash flows from operating activities, adding back changes in working capital, property rent & cash interestLease-adj. net debt Adjusted net debt plus lease debtLease-adj. net debt : FFO Ratio of lease-adjusted net debt compared to funds from operations (FFO)Lease debt Eight times property rentLike-for-like sales (LFL) Period over period change in revenue for outlets open for at least one yearNet (cash)/ debt Total company borrowings after deducting cash and cash equivalents.Occupancy Number of hotel bedrooms occupied by guests expressed as a percentage of the number of bedrooms available in the periodOperating margin/ margins Profit from operations expressed as a percentage of total revenue.Operating profit Profit before interest and taxProfit from operations Profit before central costs, interest and tax

Return on capital (ROCE) Underlying operating profit for the year divided by net assets at the balance sheet date, adding back net debt, taxation liabilities, the pension deficit and derivative financial assets and liabilities

RevPAR Revenue per available room is also known as 'yield'. This hotel measure is achieved by multiplying the ARR by OccupancyUnderlying basic EPS Underlying profit attributable to the parent shareholders divided by the basic weighted average number of ordinary shares.Underlying net finance costs Finance costs net of finance revenue excluding non-underlying finance costs or revenue.Underlying operating profit Operating profit before non-underlying operating items.Underlying profit before tax Profit before tax before non-underlying items.Underlying tax Tax expense excluding non-underlying tax items.


Appendix II | Supporting IFRS 16 information

Example property lease with a rent review every 5yrs • Lease interest front-end weighted over term

• Combined charge of depreciation + interest higher than cash rent in early years, reducing PBT & EPS

• Strong balance sheet provides favourable lease terms & lower discount rates

• Lower discount rates result in higher lease liability & greater balance sheet impact

• Fully retrospective approach to be adopted• c.350 property leases with average

remaining term of c.37 years

• c.370 car leases with an average remaining term of c.4 years

£

Period

ROU depreciation Interest

Pre- IFRS 16 Cash Rent Post- IFRS16 Interest + depreciation


Further information is available in a supporting supplementary information pack (in Microsoft Excel format) from www.whitbread.co.uk/investors/results-reports-and-presentations. This information includes:

A. Property network

B. Sales, profit & return on capital

C. Income statement

D. Non-underlying items

E. Lease commitments

Appendix III | Supplementary information

https://www.whitbread.co.uk/investors/results-reports-and-presentations


Nothing contained in this presentation is intended to constitute an offer, invitation or inducement to engage in an investment activity forthe purposes of the prohibition on financial promotions under the Financial Services and Markets Act 2000. In making this presentationavailable, Whitbread plc makes no recommendation to purchase, sell or otherwise deal in shares in Whitbread plc or any other securities orinvestments whatsoever and you should neither rely nor act upon, directly or indirectly, any of the information contained in thispresentation in respect of such investment activity.

The securities referred to in this presentation have not been and will not be registered under the U.S. Securities Act of 1933 (the “USSecurities Act”) and may not be offered, sold or transferred within the United States except pursuant to an exemption from, or in atransaction not subject to, the registration requirements of the US Securities Act.

No representations, express or implied, are given in, or in respect of, this presentation. To the extent permitted by law, Whitbread plc, andits subsidiaries, shareholders, affiliates, representatives, partners, directors, officers, employees, advisors or agents shall not be liable forany direct, indirect or consequential loss or loss of profit arising from the use of this presentation, its content or otherwise arising inconnection therewith.

Certain statements included or incorporated by reference within this presentation may constitute “forward looking statements” in respectof Whitbread plc’s operations, performance, prospects and/or financial condition. Such statements are based on Whitbread plc’s currentexpectations and beliefs concerning future events and are subject to a number of known and unknown risks and uncertainties that couldcause actual events or results to differ materially from any expected future events or results referred to in these forward lookingstatements. Such statements are also based on numerous assumptions regarding Whitbread plc’s present and future strategy and theenvironment in which it operates, which may not be accurate. Whitbread plc undertakes no obligation to update any forward lookingstatements contained in this presentation or any other forward looking statements it may make.

Nothing in this presentation should be construed as a profit forecast. Past performance cannot be relied upon as a guide to futureperformance and persons needing advice should consult an independent financial advisor.

Appendix IV | Cautionary statement


CONTACTS

www.whitbread.co.uk | [email protected] | +44 1582 888 633

Whitbread PLC | Whitbread Court, Houghton Hall Business Park, Porz Avenue, Dunstable, LU5 5XE


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Matthew JohnsonDirector – Strategy, IR & Communications

[email protected]+44 7848 146 761

Ann HyamsSenior Manager – IR


Amit MistryManager – Strategy & IR


http://www.whitbread.co.uk/

mailto:[email protected]

mailto:[email protected]

fy19 full year results april 2019 - whitbread

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