FY20 Interim Results October 2019 - FY20 INTERIM RESULTS | OCTOBER 2019 - Whitbread

FY20 Interim Results
 October 2019
 FY20 INTERIM RESULTS | OCTOBER 2019

Contents

Interim highlights Alison Brittain p3

Financial performance Nicholas Cadbury p7

Strategic update Alison Brittain p17

Appendices p32

 2 FY20 INTERIM RESULTS | OCTOBER 2019

Strong strategic progress in challenging market conditions

 1 Challenging UK market conditions in H1, likely to remain in near-term

 Strong strategic progress in the UK with 90,000 open + committed rooms,
 2 and new format trials underway

 Accelerating network growth in Germany with almost 8,000 open +
 3 committed rooms, including second acquisition delivering 482 rooms

 4 Efficiency programme delivery on-plan

 5 Rapid delivery of new post-Costa organisation structure

 3 FY20 INTERIM RESULTS | OCTOBER 2019

Interim highlights | Resilient financial performance

 UK & Ireland Germany

 Cumulative
 955 new rooms 76,837 3 hotels now open 589
 efficiency savings £215m rooms rooms
 opened in H1 FY20 in Germany
 since 2016

 Strong
 Flat revenue
 discretionary cash £197m £1.1bn Direct bookings 100%
 growth*
 conversion

 Return of surplus Strong UK ROCE
 Total pipeline >7,000
 capital from Costa £2.5bn from continuing 12.1%
 rooms
 growing
 sale completed operations

 (4.1)% 4.5
 Adjusted PBT to
 New Premier Plus 500+ Frankfurt still #1 on avg.
 (post-IFRS 16) product trial rollout rooms TripAdvisor
 £236m score

*Includes International

 4 FY20 INTERIM RESULTS | OCTOBER 2019

Interim highlights | Short-term actions underway

 Capital discipline
 Pricing Product
 & efficiencies
 Constant review Maintaining Greater
 of pricing curves
 customer capital
 to reflect
 changes in preference allocation to
 demand scores Germany

 Improved Focus on B2B
 Optimising
 competitive loyal
 pricing at short-
 the UK
 customer
 lead portfolio
 segment

 Continued
 Faster digital New Premier
 progress on
 development Plus rooms
 efficiencies

 5 FY20 INTERIM RESULTS | OCTOBER 2019

Our plan | Strong focus on long-term value creating opportunities

 Highly compelling long-term Our unique model delivers Optimising our capital
 structural growth best-in-class performance & structure & capabilities to
 opportunities enables growth support long-term growth

 Optimise capability to
 Grow & innovate in Focus on our strengths
 1 core UK markets 2 to grow internationally 3 support long-term
 growth

 • Current network of 77,000 • Three hotels open in Germany • Flexible capital structure to
 rooms & committed pipeline of support growth
 • Accelerate expansion
 13,000 rooms
 organically & selective M&A • £25 million efficiencies delivered
 • Innovation supporting further • Open + committed pipeline in the first half of the year
 capacity growth to over
 of almost 8,000 rooms • Be a Force for Good
 110,000 rooms

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

 6 FY20 INTERIM RESULTS | OCTOBER 2019

FINANCIAL PERFORMANCE | Nicholas Cadbury – CFO

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 7
 7 FY20 INTERIM RESULTS
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IFRS 16 recap | Non-cash financial reporting changes

Significant changes to statutory financial reporting Statutory reporting impact
• New accounting standard for financial reporting of • Material impact to statutory reporting due to large
 lease agreements now adopted volume of long-term property leases

• Whitbread’s leases fall into two main areas • Lease liability and associated “right of use” asset
 recognised on the balance sheet using discounted
 - short, low-value leases (mainly cars) cash flows
 - long, high value leases (c.350 hotels)
 • Rental charge replaced with depreciation &
What’s changing? What’s not changing? interest
• Recognition of significant • Revenue, non-rent • Depreciation + interest not equal to cash rent in
 lease liability & ‘right of costs, EBITDAR and any year, detrimental impact on early years
 use’ asset on the balance cashflow (further detail in Appendix II)
 sheet
 • Unit economics and
• Rental charge in income cash flow • EBITDAR & cash flow not impacted by IFRS 16
 statement replaced with
 • Approach to capital • EBITDAR and cash flow provides a more
 non-cash depreciation
 allocation meaningful & predictable view of continuing
 and interest
 • No detrimental impact operational performance
• Impacts some key on debt metrics and
 performance indicators
 covenant calculations
 expected

 8 FY20 INTERIM RESULTS | OCTOBER 2019

Financial highlights | Resilient financial performance

 H1 FY19 H1 FY20 • Revenue broadly flat through new capacity
Revenue £1,079m £1,078m (0.1)% addition
Adjusted EBITDAR £448m £427m (4.8)% • Weak market conditions impact like-for-like
Adjusted PBT
 sales & operating leverage
 £266m £251m (5.6)%
(pre-IFRS 16)
 • Disciplined cost management to partially
Adjusted PBT offset high industry cost inflation
 £246m £236m (4.1)%
(post-IFRS 16)
Adjusted basic EPS from • Strong discretionary free cash flow
 116.3p 122.6p 5.4%
continuing ops. conversion of 97% excluding one-off
 transaction and separation costs of £51
Discretionary FCF £283m £197m
 million
Capital expenditure £212m £197m £(15)m
 • Total ROCE decreased due to timing of new
Return on capital 12.4% 10.8% (160)bps capacity additions, inflationary headwinds,
 investment in Germany & weaker UK market
Lease-adjusted net debt
 3.4x 2.3x 1.1x
to FFO
 • UK ROCE remained strong at 12.1%
Interim dividend 32.7p 32.7p

 9 FY20 INTERIM RESULTS | OCTOBER 2019

Operating performance | Flat revenues in tough market conditions

 H1 FY19 H1 FY20 • UK revenue held flat due to capacity
Revenue £1,079m £1,078m (0.1)% growth of 5%
- UK & Ireland £1,077m £1,074m (0.3)%

- Germany £2m £4m n.m. • Strong London growth 4.5%
- Middle East £0m £0m n.m.
 • Weak regional market (2.0)%, where
EBITDA £365m £336m (8.1)% most Premier Inns are located
- UK & Ireland £369m £343m (7.2)%

- Germany £(3)m £(5)m n.m.
 • Germany growth on plan
 • Adjusted PBT benefit from lower
- Middle East £(1)m £(2)m n.m.

Adjusted PBT (pre-IFRS 16) £266m £251m (5.6)%
 finance charge due to Costa proceeds
UK ROCE 13.3% 12.1% (120)bps

Other metrics
UK total accommodation sales growth 4.8% (0.6)% (540)bps

UK F&B sales growth (0.8)% 0.6% 140bps

UK LFL accommodation sales growth 0.2% (3.6)% (380)bps

 *Before interest & unallocated central costs

 10 FY20 INTERIM RESULTS | OCTOBER 2019

Margins & ROCE | Sustainable economic model

 Efficiency programme offsetting inflation Growth investment & UK performance impacting
 ROCE
 (0.5)%
 (0.8)%

 (0.2)%
 (2.2)%
 (1.7)% 1.5%
 (0.6)% (1.3)%

 (0.4)%
 2.3%
 26.5% (1.1)% 13.3%

 (0.4)% 12.1%

 23.7% 10.8%

 H1 F Y19 LFL + new Inflation Labo ur Rent Efficiency Investment International H1 F Y20 UK H1 F Y19 LFL + Inflation Efficiency Investment UK H1 F Y20 International H1 F Y20
 capacity + NLW + rates new capacit y

• Operating margins declined 2.8% impacted by • ROCE declined 1.6% driven by the weaker UK
 inflationary pressures, further wage and rent market, sector-wide inflation and investment in
 increases, and a weak market Germany
• Good progress with efficiency programme • Efficiencies offset these headwinds by 1.5%
 offsetting some headwinds
 *ROCE before unallocated central costs

 11 FY20 INTERIM RESULTS | OCTOBER 2019

Cash generation | Strong & consistent to fund investments

 EBIT £255m • Strong cash flow conversion of
 97%, excluding one-off Costa
 Depreciation &
 amortisation
 £81m transaction & separation costs of
 £51 million
 Working capital £(10)m
 • Discretionary FCF used to fund:
 Transaction &
 - Continuing business growth
 £(51)m
 separation costs

 Maintenance CapEx – £119 million
 £(78)m
 CapEx
 - Dividends – £116 million
 Interest £2m

 Tax paid £(2)m

 Discretionary
 £197m
 FCF

 12 FY20 INTERIM RESULTS | OCTOBER 2019

Investment | Compelling opportunities to re-invest capital

 H1 H1 Last 2 Maturity
 Mature • Premier Inn’s maintenance
 site-level capital upholds the estate’s
 FY19 FY20 years duration
 ROCE
 consistent quality
Maintenance,
product
improvement & IT
 £95m £78m £276m - -
 • Significant investment in new
 UK capacity delivering strong
New hotels & extensions ROCE
- UK £87m £71m £402m 1-4 yrs 12 – 14%
 • Initial Germany ROCE > WACC
- International £30m £48m £177m 3-5 yrs 10 – 14% to build scale
Discontinued
Operations
 £56m - £184m - - • Longer term Germany ROCE
Total £268m £197m £1,039m - -
 close to UK ROCE

 • Total invested capital in
Pipeline progression Germany c.£280 million
(# rooms) H1 FY19 H1 FY20 
 • Total further committed capital
- UK & Ireland 13,385 12,928 (457) in Germany >£500 million
- Germany 5,833 7,280 1,447

 13 FY20 INTERIM RESULTS | OCTOBER 2019

Capital discipline | Appropriate leverage ensures investment agility

 Maintaining an appropriate leverage position Diverse & flexible funding options
 H1 FY19 FY19 H1 FY20 Balanced debt maturity profile
(Continuing + discontinued operations)
 USPP
 £359m
Funds from operations (FFO) £953m £902m £659m @2.6-5.2%

Adjusted net debt / (cash) £891m £(2,573)m £88m Lease
 RCF debt
 ~£900m Flexible £1,404m
 £900m
Lease debt (8x rent) £2,316m £2,193m £1,404m source of @7.0%
 @0.2%
 (£900m funds
Lease-adjusted net debt / (cash) £3,206m £(381)m £1,492m unutilised) £450m

 £200m
 £75m £84m £50m
 Bond
 £450m
 2020 2021 2022 2025 2027
Lease-adjusted net debt : FFO 3.4x (0.4) 2.3x @3.4%
 USPP Bond RCF (utilised) RCF (unutilised)

 • Maintaining good access to funds to support • Leverage will increase to c.3.0x including
 growth opportunities in UK & Germany committed capital & leases in the UK & Germany
 • Return of surplus capital programme and pension • Whitbread’s scale & diversity of operations enables
 deficit contributions completed low-cost funding from diverse sources
 • Investment grade metric maintained which • Freehold to leasehold mix 61% : 39%
 supports the ability to secure good yields on
 leasehold sites

 14 FY20 INTERIM RESULTS | OCTOBER 2019

Recent trading | Challenging market conditions continuing
 UK Midscale & Economy accommodation sales growth Premier Inn has lower exposure to London

 (Annual room night demand)
Accommodation Business

 London v Regions
sales growth confidence index
 London
 14% 30 London 3m
 47m
 12%
 25 UK
 10%
 Market
 Regions
 8% 116m Regions
 20
 17m
 6%

 4% 15
 • UK accommodation sales impacted by macro
 2% uncertainty over the period

 0%
 10 • Significant reduction in business confidence
 leading to weaker short-stay travel demand
(2)%
 5 • Regions have underperformed London in the last
(4)% year – Premier Inn network >80% ex-London
(6)% 0 • Positive trading in London driven by international
 Sep 2018 Dec 2018 Mar 2019 Jun 2019
 visitors

 Londo n Regions Business co nfi dence • Weakest trading period in April 2019 – alongside
 previous expectations of EU exit
Source: accommodation sales - STR Global; Business confidence – UK Lloyds Business Barometer

 15 FY20 INTERIM RESULTS | OCTOBER 2019

FY20 outlook | Consistent guidance with FY19 Results

 • UK economic & political environment leading to sustained weak hotel demand,
 especially relating to business customers in the regions
 • Operational leverage leads to each 1% movement in RevPAR impacting
 PBT £12-15 million
 Operating
 • Net margin headwind of £40-50 million in FY20:
 performance - Good progress with efficiency programme delivering £40-50 million,
 - Inflation leading to £70 million higher costs
 - Operational dis-synergies following the sale of Costa of £10 million
 - Germany losses of £12 million in FY20, up from £8 million in FY19

 • Investing in 5,000 new rooms comprising:
 - c.3,000 new rooms in the UK
 - c.2,000 new rooms in Germany

 Investment • Capital investment this year is expected to be £600-700 million comprising:
 - Investing £150 million in maintenance and improvement
 - Investing £150-200 million in new capacity in the UK
 - Investing £300-350 million in new capacity in Germany including the acquisition of the
 Foremost hotels at the end of FY20

 16 FY20 INTERIM RESULTS | OCTOBER 2019

STRATEGIC UPDATE | Alison Brittain – CEO
 Premier Plus

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 17 FY20 INTERIM RESULTS
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Our markets | Long-term structural growth opportunities

 UK – winning share from under-invested Germany – stand-out growth opportunity in Europe
 independents with 74% independent market share
 10 0 0

 6% 9% 11% 12% 90

 136 142 145 150 154 158 162 172
 12%
 15% 80

 18% 19% 52 55 58
 Budget 62 67 71 76 80
 branded
 23%
 7 0

 24%
 60

 25%
 26% Other
 branded 50

 40

 752 755 746 738 729 725 716 712
 30

 59%
 52%
 46% 43% Independents 2 0

 10 0

 0

 2010 2016 2020 Beyond 2020 2010 2011 2012 2013 2014 2015 2016 2017
 684k rooms 700k rooms 740k rooms >750k rooms Germany hotel demand (million room nights p.a.)
 Independents Branded budget Branded non-budget
 Actual Estimate

 18 FY20 INTERIM RESULTS | OCTOBER 2019

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

 • Leading value-for-money • Brand strength

 advantage
Integrated
 trading

 • 98% direct booking • Largest UK network

 Scale
 • Low-cost customer • Economies of scale
 acquisition & retention

 • Hot food in all hotels • Superior network
F&B model

 flexibility
 Property
 In-house

 access
 • National breakfast
 offer • Low-cost access to
 capital
 • Dinner flexed to local
 area • Best sites at local level

 • Efficient operating

 Operational
 • All hotels operated by us
efficiency
Everyday

 structures

 control
 • Standardised model & rooms • High quality experience
 • Consistent execution
 • Ongoing opportunity to throughout the network
 drive efficiency further

 19 FY20 INTERIM RESULTS | OCTOBER 2019

Product strength | Maintaining our customer appeal

 The first choice for more travellers Excellent quality and value creates strong brand

 Hotel Consideration
 Would consider Purchase Intent

 Quality score
 35
 41% Hilton
 Premier Inn
 18% 30

 29%
 Travelodge
 8% 25 Marriott
 2019
 22%
 Holiday Inn 20
 2% 2016
 19%
 Hilton 15
 3%

 16% Holiday Inn
 Holiday Inn Express 10
 2%
 Holiday Inn
 16%
 Marriott 5 Express
 2% Ibis
 Travelodge

 14% 0
 Ibis
 2% -5 5 15 25 35
 Value score

Source: YouGov BrandIndex. Scores based on a 12 week moving average on 29 Aug 2019 Source: YouGov Quality and Value scores as at 29 Aug 2019 based on a 52 week moving average.

 20 FY20 INTERIM RESULTS | OCTOBER 2019

UK network strength | Optimising our network

Optimising our network Catchment case study: Preston

 • High degree of control over timing of
 extensions Preston East
 Pace of
 extension & • Some extensions postponed given Extend to 109 rooms
refurbishment recent market conditions
 • Revisit as conditions improve Preston Central
 Maintain 140 rooms &
 regear lease
 • Long-term ambition >110,000 rooms
 Preston West Preston South
 Pace & scale • Current network 77,000 rooms + (Cuerden Way)
 Exit 38 rooms
 of new 13,000 room committed pipeline Exit 42 rooms
 capacity • Ongoing revalidation of pipeline to
 Preston South
 optimise timing of new capacity (Craven Drive)

 Extend to 100 rooms

 • Detailed study of current estate to
 identify our ‘perfect portfolio’ • Look at each catchment as a ‘blank page’
 Catchment • Potential to extend existing hotels to maintain
 optimisation • Focusing on optimising every
 catchment, rather than pure unit catchment capacity & improve ROCE on existing sites
 growth • Potential to release capital by exiting sub-scale hotels

 21 FY20 INTERIM RESULTS | OCTOBER 2019

Innovation | New Premier Plus room trial underway

 • 38 Premier Plus rooms refurbished in
 Trial two central London hotels
 underway
 • Plus rooms on separate guest floors

 Customer • Drives average room rate
 segmentation &
 commercial • Increases both business & leisure guest
 benefit satisfaction

 • Strong demand for Premier Plus room
 Initial trial from both business & leisure guests
 Improved workspace, comfy armchair, air results • Guest scores significantly higher &
More comfort conditioning, flat screen TV, and vanity area planned strong incremental ROIC
 with a stool and hairdryer. Plus, a rainfall shower
 with luxury toiletries

 Dedicated hotel floor, mini-fridge with • >500 rooms in trial by December 2019
 More complimentary water, Nespresso machine with Roll-out plan • >2,000 rooms identified with potential
convenience pods, tea bags, treats and an iron and ironing to be converted into Premier Plus
 board

 22 FY20 INTERIM RESULTS | OCTOBER 2019

Innovation | New formats extend catchment and customer reach

 11 hotels open:
 8 London 1st hotel opened in
 3 Edinburgh Cardiff Feb’19

 • > 80% average occupancy • Innovative new format enabling further UK growth
 Performance & guest
 feedback • 50:50 business leisure mix • Simple rooms offered for customers seeking extra value
 • ~76% TripAdvisor score 5/5 • Clear customer, product & price differential to core
 Premier Inn position
 • Bank hotel opened Aug 19
 New catchment Trial performing well
 opportunity • Potential to expand into more
 UK cities with high land values
 & high room rates • Potential to enable further
Target cities: UK growth
 • Strong occupancy since
 opening & maturing well
 • Strong appeal for leisure
 customers (at weekends)
 Bath Manchester Oxford Glasgow

 23 FY20 INTERIM RESULTS | OCTOBER 2019

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

Building the German pipeline Hamburg has matured beyond expectations
 To be Occupancy (%)
 Organic acquired Total 90

Open and 3 hotels 17 hotels 20 hotels 70
trading (590 rooms) (2,770 rooms) (3,360 rooms)
 50
Committed 18 hotels 5 hotels 23 hotels
pipeline (3,690 rooms) (820 rooms) (4,510 rooms) 30
 P1 P2 P3 P4 P5 P6
 21 hotels 22 hotels 43 hotels Hamburg
Total Competitor set* Premier Inn
 (4,280 rooms) (3,590 rooms) (7,870 rooms) PI opens

 Unit economics vs Premier Inn UK
Long-term opportunity to replicate UK success (100 bed hotel)

 • Focus on Tier 1 cities
 Revenue £2.5m Higher
 Site • Freehold & leasehold organic pipeline development
 selection enables superior site access Rent (if leasehold) £(0.6)m Higher

 • M&A to supplement or transform organic growth Other costs £(1.2)m Similar

 Freehold hotel profit £1.3m Higher
 Market- • All hotels currently 100% direct
 leading Leasehold hotel profit £0.6m Higher
 distribution • Selective use of OTAs during expansion
 10-14%
 Great value • Premium economy proposition at stand-out value mature site-
 Capital cost £9.3m Higher
 for money • Focus on a great bed, shower and wi-fi level ROCE Maturity 1-4yrs 3-5yrs
 *Competitor set includes 13 M&E brand hotels in Hamburg

 24 FY20 INTERIM RESULTS | OCTOBER 2019

Germany | Refurbishing acquired hotels to Premier Inn in 2020

Type of refurbishment for 13 hotels acquired in Feb 2020 will vary by hotel depending on current condition

 • Repaint and new artwork
 • New Premier Inn furnishings
 Full (TV, curtains, desk, sofa-bed)
 1 Rebrand
 • New Premier Inn bed
 • Approx. 510 rooms

 • Repaint and new artwork
 • Retain some furnishings (desk,
 Medium wardrobe)
 2
 Rebrand
 • New Premier Inn bed
 • Approx. 1,073 rooms

 • Repaint and new artwork
 • Retain most furnishings, incl.
 Light lighting and wardrobes
 3 Rebrand • New bed upholstery
 • Approx. 557 rooms

 25 FY20 INTERIM RESULTS | OCTOBER 2019

Managing distribution | Driving high quality net RevPAR at low cost

 Gross Customer Ongoing review of optimal distribution
Acquisition
channel
 RevPAR - acquisition = Net RevPAR
 impact
 % of
 bookings
 impact costs • Results in superior profitability through
 sustainably lower acquisition costs
Direct:
 Low
 Direct • Requires continued investment in customer
PI.com bookings proposition & digital capabilities
 • Majority are domestic, short-stay guests with
Direct:
 high travel frequency: higher lifetime value
 Low
App

 98% • Find incremental customers in specific
 Supporting locations or value conscious inbound tourists
Direct:
 Low
Business booker new • OTAs remain least preferred route due to
 customer direct cost & transaction not through our
 acquisition website
Direct:
Non-Digital
 Low • Optimise metasearch & other avenues

Indirect: • Ongoing review of third parties relationships
No commission Low
channels (e.g. GDS) • Optimise website & B2B proposition to boost
 Short-term conversion
 priorities
Indirect: • Pricing decisions prioritise occupancy
Commission-based Highest
OTA • Localised pricing & refine algorithm for special
 events

 26 FY20 INTERIM RESULTS | OCTOBER 2019

Capabilities & efficiency | On plan to deliver £45 million efficiencies

 Strong delivery so far & ambition remains Significant savings already delivered

 Initial 5-year International sourcing and supply chain team
 £150m
 target • New sourcing and supply-chain
 office in Shanghai
 FY17-19 Whitbread Costa
achievement £145m £45m • Developing a new sourcing strategy
 and consolidated supplier base
 New 3-year OpEx CapEx • Improving our product range and
 target £120m £100m product solutions to enhance the
 guest experience
 • End-to-end review of our £1.6 bn cost base
 What Pre-wired bedroom furniture
 • Detailed cost and specification reviews
 we’ve
 delivered • New team structures • Wiring sockets and switches on-site
 is complicated to manage and
 • Re-negotiation of supplier contracts requires numerous trade
 professionals
 • Overhead costs • Furniture is starting to be pre-wired
New focus in China, rather than on-site
 areas
 • Controllable site costs
 • This will deliver faster installation
 • Fixed costs (rent, D&A, rates) times and reduce room fitout costs

 27 FY20 INTERIM RESULTS | OCTOBER 2019

Capabilities & efficiency | Costa separation complete

 Transitional Support
 Transaction Head office Return of
 Services service
 execution reorganisation surplus capital
 Arrangement separation

 May 2018 to
 January 2019 April 2019 July 2019 Underway
 January 2019

• Small internal • Services include: • Previous ‘Group’ • £500 million • Logistics –
 team worked with structure returned via share separation
 - HR services
 Coca-Cola to reorganised as a buyback complete
 deliver strong - Procurement & focused hotel programme
 contracting business
 • HR services
 valuation
 • £2 billion returned • Payroll
 - Supply chain, • Significant savings
• Shareholder logistics &
 via a tender offer
 approval gained delivered in FY20
 distribution • Capital structure To complete in FY20
• Rapid transaction - IT • Improving ways of now optimised for
 completion working to focused growth in
 • Cost recovery increase pace of UK & Germany
 leading to margin decisions &
 neutral outcome delivery

 28 FY20 INTERIM RESULTS | OCTOBER 2019

A force for good | Integrated throughout our operating model

 Opportunity Community Responsibility
 Being a place where everyone Making meaningful contributions Treating people and the planet
 can reach their potential to the communities we serve with respect

 • >£15 million raised for Great
• Opened our second training Ormond Street since 2012
 facility for young adults with • Trained 1,600 cotton farmers in
 • Fundraising to build the UK’s first Pakistan to farm sustainably
 special educational needs at Sight and Sound Centre; a
 Hereward College dedicated facility for children • Launched the UK’s first battery
• Apprenticeship programme with sight & hearing loss powered hotel in Edinburgh
 continues to grow, with over • New sites to volunteer three • Replaced 10 million plastic straws
 4,000 successfully qualified hours to local community impact
 projects

 29 FY20 INTERIM RESULTS | OCTOBER 2019

Strategic priorities | Accelerated pace of delivery continuing

 1 Manage & optimise shorter-term UK tactical trading

 2 Optimisation of UK network growth & product segmentation

 3 Integration of acquired hotels in Germany & further pipeline development

 Relentless focus on improving our capabilities whilst generating efficiencies
 4 to offset ongoing structural cost inflation

 Remain focused on investing in long-term structural opportunities
 5 in the UK & internationally

 30 FY20 INTERIM RESULTS | OCTOBER 2019

QUESTIONS | Alison Brittain & Nicholas Cadbury

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 2019

Appendices

I Definitions p33
II Supporting IFRS 16 information p34
III Supplementary information p35
IV Cautionary statement p36

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).

 32
 32 FY20 INTERIM RESULTS
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Appendix I | Definitions
Accommodation sales Premier Inn accommodation revenue excluding non-room income such as food and beverage
Adjusted basic EPS Adjusted profit attributable to the parent shareholders divided by the basic weighted average number of ordinary shares
Adjusted net (cash) / debt Net (cash) / debt adjusted for cash not readily available
Adjusted profit before tax Profit before tax before adjusting items.
Average room rate (ARR) Accommodation revenue divided by the number of rooms occupied by guests
 Based on stayed bookings in the financial year made direct to the Premier Inn website, Premier Inn app, Premier Inn
Direct bookings/ distribution
 customer contact centre or hotel front desks.
Discretionary free cash flow Cash generated from operations (pre-IFRS 16) after payments for interest, tax and maintenance capital
EBITDA Adjusted earnings before interest, tax, depreciation and amortisation
EBITDAR Adjusted earnings before interest, tax, depreciation, amortisation and rent
Food and beverage (F&B)
 Food and beverage revenue from all Whitbread owned pub restaurants and integrated hotel restaurants
sales
Funds from operations (FFO) Net cash flows from operating activities, adding back changes in working capital, property rent & cash interest
Lease-adj. net debt Adjusted net debt plus lease debt
Lease-adj. net debt : FFO Ratio of lease-adjusted net debt compared to funds from operations (FFO)
Lease debt Eight times property rent
Like-for-like sales (LFL) Period over period change in revenue for outlets open for at least one year
Net (cash)/ debt Total company borrowings after deducting cash and cash equivalents.
 Number of hotel bedrooms occupied by guests expressed as a percentage of the number of bedrooms available in the
Occupancy
 period
Operating margin/ margins Adjusted operating profit expressed as a percentage of total revenue.
Operating profit Profit before interest and tax
 Adjusted operating profit (pre-IFRS 16) divided by net assets at the balance sheet date, adding back net debt, right of
Return on capital (ROCE)
 use assets, lease liabilities, taxation liabilities, the pension surplus/deficit and derivative financial assets and liabilities
 Revenue per available room is also known as 'yield'. This hotel measure is achieved by multiplying the ARR by
RevPAR
 Occupancy

 33 FY20 INTERIM RESULTS | OCTOBER 2019

Appendix II | Supporting IFRS 16 information

 H1 FY20 IFRS 16 impact on Balance Sheet H1 FY20 impact

 Pre- Add lease Add right-of- Post-
 IFRS 16 liabilities* use-asset* IFRS 16 Pre-IFRS 16 Post-IFRS 16 Variance

 Total assets £5,656m - £2,124m £7,780m EBITDAR £427m £427m -
 Total liabilities £(1,557)m £(2,423)m - £(3,980)m Adjusted operating profit £255m £296m £40m
 Net assets £4,099m £(2,423)m £2,124m £3,800m Adjusted profit before tax £251m £236m £(15)m
 Statutory profit before tax £235m £220m £(15)m
 H1 FY20 IFRS 16 impact on Income Statement Adjusted basic earnings per share 122.6p 113.0p (9.6)p
 Add Statutory basic earnings per share 113.9p 104.3p (9.6)p
 Pre- Remove depreciation Post-
 IFRS 16 rent & interest IFRS 16

 EBITDAR £427m - - £427m

 Rent £(91)m £91m
 All of the impacts are presented as a range of outcomes as they
 EBITDA £336m £91m £427m remain subject to refinement of judgements, estimates and
 Depreciation & amortisation £(81)m £(50)m £(131)m assumptions.
 Adjusted operating profit £255m £91m £(50)m £296m Further information specific to the impact of IFRS 16 is available
 Net finance costs £(3)m - £(57)m £(60)m in a supporting supplementary information pack (in Microsoft
 Excel format) from www.whitbread.co.uk/investors/results-
 Adjusted profit before tax £251m £91m £(107)m £236m centre.
*Includes working capital adjustment; **includes £10m amortisation

 34 FY20 INTERIM RESULTS | OCTOBER 2019

Appendix III | Supplementary information

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

A. Hotel estate

B. Sales, profit & return on capital

C. IFRS 16 adjustments

D. Adjusting items

 35 FY20 INTERIM RESULTS | OCTOBER 2019

Appendix IV | Cautionary statement
Nothing contained in this presentation is intended to constitute an offer, invitation or inducement to engage in an investment activity for
the purposes of the prohibition on financial promotions under the Financial Services and Markets Act 2000. In making this presentation
available, Whitbread plc makes no recommendation to purchase, sell or otherwise deal in shares in Whitbread plc or any other securities or
investments whatsoever and you should neither rely nor act upon, directly or indirectly, any of the information contained in this
presentation 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 “US
Securities Act”) and may not be offered, sold or transferred within the United States except pursuant to an exemption from, or in a
transaction 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, and
its subsidiaries, shareholders, affiliates, representatives, partners, directors, officers, employees, advisors or agents shall not be liable for
any direct, indirect or consequential loss or loss of profit arising from the use of this presentation, its content or otherwise arising in
connection therewith.
Certain statements included or incorporated by reference within this presentation may constitute “forward looking statements” in respect
of Whitbread plc’s operations, performance, prospects and/or financial condition. Such statements are based on Whitbread plc’s current
expectations and beliefs concerning future events and are subject to a number of known and unknown risks and uncertainties that could
cause actual events or results to differ materially from any expected future events or results referred to in these forward looking
statements. Such statements are also based on numerous assumptions regarding Whitbread plc’s present and future strategy and the
environment in which it operates, which may not be accurate. Whitbread plc undertakes no obligation to update any forward looking
statements 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 future
performance and persons needing advice should consult an independent financial advisor.

 36 FY20 INTERIM RESULTS | OCTOBER 2019

CONTACTS Matthew Johnson
 Director – Strategy & IR
 matt.johnson@whitbread.com
 Ann Hyams
 Senior Manager – IR
 ann.hyams@whitbread.com
 Amit Mistry
 Manager – Strategy & IR
 amit.mistry@whitbread.com
 Anastasia Pittas
 Analyst – Strategy & IR
 anastasia.pittas@whitbread.com
 +44 7848 146 761 +44 7796 709 087 +44 7540 150 350 +44 7540 150 350

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

 vCard www.whitbread.co.uk | investorrelations@whitbread.com | +44 1582 888 633

 37 FY20 INTERIM RESULTS
 FY20 INTERIM | OCTOBER
 RESULTS | OCTOBER2019
 2019