Premier Presentation

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July 2004

Whitbread PLC

premier travel innthe acquisition of Premier Lodgeand 19 pub restaurants



Alan Parker

chief executive, Whitbread PLC



Premier Lodgethe transaction

• £536.2m acquisition— £505m acquisition of 132 hotels + 9 development sites

— £31.2m acquisition of 19 pub restaurants

• Earnings enhancing in first full year (2005/6)

• To generate 10%+ return on investment insecond full year (2006/7)









premier travel inn

0

5,000

10,000

15,000

20,000

25,000

30,000

Premier Travel Inn

Travelodge Express by Holiday Inn

Ibis

Travel Inn Premier Lodge Pipeline

Number of bedrooms29,141

14,213

9,304

5,503

Source: Whitbread analysis of published company data



premier travel inn fast integration

• Detailed integration plans in place:— People

— Systems

— Properties— Supply chain

— New brand launch

• Completed by March 2005



a growth sectoruse of branded budget hotels

0

1

2

3

4

5

6

1999 2000 2001 2002 2003

Business Leisure

Guests (millions)

17% CAGR



6%

12%

0%

2%

4%

6%

8%

10%

12%

14%

Total accommodation Total hotels market

Source: Whitbread analysis of data from BHA/VisitBritain/University of Huddersfield

an underdeveloped sectorbranded budget hotels as a percentage of total rooms available (UK)



• Strong product consistency• Nationwide coverage

• World class reservation system

• Transparent pricing

• 100% Satisfaction Guarantee

• Top quality pub restaurants

premier travel innthe competitive edge



David Richardson

finance director, Whitbread PLC



Premier Lodgehigh quality assets

Year of opening Units BedroomsPre-2003 118 7,701

2003 11 903

2004 (to date) 3 529

2004-2007 9 929

Total 141 10,062

Pub restaurants 19 n/a

the pipeline

Source: Vendor information



Premier Lodgehigh quality assets

• 48% of Premier Lodge rooms opened within lastfour years

• 88% of lodges built or refurbished completely

within last three years

• 19 pub restaurants re-branded to Brewers Fayre byMarch 2005




the acquisitionassets

Stand alone hotels

Co-located withBrewers Fayre

Co-located withSpirit restaurant

Total

Total

bedrooms sites

5,009 38

899 19

4,154 84

10,062 141

Freehold(or equivalent*)

Lease hold

bedrooms sites bedrooms sites

2,994 22 2,015 16

737 17 162 2

3,953 81 201 3

7,684 120 2,378 21

Source: Vendor information * inc. long leases at peppercorn



incremental capital employed

£m

Acquisition - Premier Lodge- Pub Restaurants

50531

Capital to complete pipeline 32Transaction costs 9

Estimated working capital (8)

Total balance sheet value 569

NB Integration costs (to be expensed 2004/5) 8





incremental profitexisting business

Calendar 2003£m

H1 2004£m

H1 2004% change

Sales 114 63 20

Unit profit 37 20 20

Est. overhead (8) (4) -

Est. PBIT 29 16 26

NB Depreciation 12 6 n/a


l f



incremental profit from recent and new openings

Bedrooms Profit perroom *

£k

Profit growth£m

2003 openings 903 50% x 4.4 2.0

2004 openings(to date)

529 4.4 2.3

Post-deal

openings

929 4.4 4.1

Total 2,361 - 8.4

* Based on 2003 profit contribution per room

i l fi



incremental profitrevenue enhancement

• c.£8m additional PBIT through greater occupancyand sales synergies:

— reservations

— cross-sell— estate density

— heightened consumer awareness

Benefits accruing to both Premier Lodge and Travel Inn estates

i l fi



incremental profitcost synergies

£m

Total cost synergies 6

Unit cost reductions

Overhead and marketing savings

Revenue cost of ongoing refurbishment (2)

Net cost synergies 4



one-off costs

£m

Direct cost of integration 5

Refurbishment of non-invested bedrooms 3

Total estimated one-off costs(to be expensed 2004/5)

8



a group perspective

• Gearing (2003/4 pro forma) – 65% (38% pre-acquisition)

• Interest cover (2003/4 pro forma) - 3.7 x

(5.6 x pre-acquisition) • EPS enhancing in first full year

(2005/6)

• Return on investment to exceed 10% in second full year(2006/7)





appendix





premier travel inn



premier travel innhotels and bedrooms

* Spirit continues to operate an additional seven hotels (229 bedrooms) under a franchise agreement with Whitbread

Hotels Bedrooms

Travel Inn (at July 2004) 304 18,316

Travel Inn (pipeline) 9 534

Premier Lodge (at July 2004) 132 9,133Premier Lodge (pipeline) 9 929

premier travel inn (Whitbread) 454 28,912

Franchise premier travel inn (Spirit)*

7 229Total premier travel inn 461 29,141

Whitbread budget hotels



Whitbread budget hotelsroom growth 1997-2005

0

5,000

10,000

15,000

20,000

25,000

30,000



Career highlights



Mike Tye

managing director,premier travel inn

Career highlights• joined Travel Inn as managing

director in 2003• 2001-3: managing director,

CostaAlso • marketing & strategic planning

director, Whitbread

Restaurants• sales & marketing director,

Whitbread Inns• managing director, Aramark

Food Services Plc

Age 50

Career highlights



Neil Cooper

finance director,premier travel inn

Career highlights• joined 2002 as finance director,

Travel Inn

Also • planning director, Pizza Hut• strategic finance project

manager, Whitbread• PwC Management Consulting• several senior finance positions

with Reckitt & ColemanAge 37

Career highlights



Gill Baker

sales andmarketing director,premier travel inn

Career highlights• joined Travel Inn as

sales and marketing directorin April 2001

Also • joined Unilever in 1987 as a

systems engineer beforemoving into marketing

•

gained widespread experienceworking across a number of food brands in differentEuropean markets

• in August 98 promoted to

marketing controller formargarine and spreadsAge 39

Career highlights



Paul Flaum

operations director,(managed)premier travel inn

Career highlights• operations director - Managed

Travel Inn• previously regional operations

director for MTI’s NorthAlso • strategic planning & business

analysis manager (leisure

division), The Rank Group• regional manager London &

South, Odeon Cinemas Ltd• regional director, London &

South, Odeon Cinemas Ltd

Age 33

Career highlights



DarrochCrowford

operations director,premier travel inn

Career highlights• operations director for

Travel Inn• 2 years operations director

Brewers Fayre/BrewstersAlso • 6 years with Hilton Hotels• 8 years with Forte Hotels• 13 years with Thistle Hotels –

trainee to general manager• general manager White House

Hotel, Herm, Channel IslandsAge 51

Career highlights



Deborah Parker

property director,premier travel inn

Career highlights• joined June 2003 as property

director

Also • head of acquisitions then headof development, Kingfisher

• head of property, BAA• various senior positions in other

leisure companies such asRank/Luminar• developed property side of the

BigW chain, WoolworthsAge 40



Career highlights



Susan Thomas

systems director,premier travel inn

Career highlights• joined in April 1998 as

IT Director• previously business systems

manager, finance servicesdivision, Whitbread

Also • project accountant, services

division, Whitbread• senior business consultant,

WhitbreadAge 40

Documents

Premier Presentation