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8/14/2019 Premier Presentation
http://slidepdf.com/reader/full/premier-presentation 1/38
July 2004
Whitbread PLC
premier travel innthe acquisition of Premier Lodgeand 19 pub restaurants
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Alan Parker
chief executive, Whitbread PLC
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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)
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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
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premier travel inn fast integration
• Detailed integration plans in place:— People
— Systems
— Properties— Supply chain
— New brand launch
• Completed by March 2005
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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
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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)
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• Strong product consistency• Nationwide coverage
• World class reservation system
• Transparent pricing
• 100% Satisfaction Guarantee
• Top quality pub restaurants
premier travel innthe competitive edge
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David Richardson
finance director, Whitbread PLC
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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
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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
Source: Vendor information
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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
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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
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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
Source: Vendor information
l f
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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
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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
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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
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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
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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)
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premier travel inn
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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
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Whitbread budget hotelsroom growth 1997-2005
0
5,000
10,000
15,000
20,000
25,000
30,000
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Career highlights
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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
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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
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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
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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
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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
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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
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Career highlights
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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