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Whitbread PLC. premier travel inn the acquisition of Premier Lodge and 19 pub restaurants . July 2004. Alan Parker. chief executive, Whitbread PLC. Premier Lodge the transaction. £536.2m acquisition £505m acquisition of 132 hotels + 9 development sites

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Whitbread PLC

premier travel inn the acquisition of Premier Lodge and 19 pub restaurants

July 2004


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 in second full year (2006/7)


premier travel inn

  • Clear leader in growth sector

  • Platform for strong sales growth

    • increase occupancy in acquired hotels

    • reduce discounts and improve overall sales mix

  • Cost synergies


premier travel inn

  • The UK’s biggest hotel brand

  • 461 locations* across the UK

  • 29,141 bedrooms*

* Includes hotels committed for development but not yet built


Number of bedrooms

29,141

30,000

25,000

20,000

14,213

15,000

9,304

10,000

5,503

5,000

0

Premier Travel

Travelodge

Express by

Ibis

Inn

Holiday Inn

Travel Inn

Premier Lodge

Pipeline

premier travel inn

Source: Whitbread analysis of published company data


premier travel innfast integration

  • Detailed integration plans in place:

    • People

    • Systems

    • Properties

    • Supply chain

    • New brand launch

  • Completed by March 2005


Guests (millions)

6

17% CAGR

5

4

3

2

1

0

1999

2000

2001

2002

2003

Business

Leisure

a growth sector use of branded budget hotels


14%

12%

12%

10%

8%

6%

6%

4%

2%

0%

Total accommodation

Total hotels market

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

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


premier travel innthe competitive edge

  • Strong product consistency

  • Nationwide coverage

  • World class reservation system

  • Transparent pricing

  • 100% Satisfaction Guarantee

  • Top quality pub restaurants


David Richardson

finance director, Whitbread PLC


the pipeline

Premier Lodgehigh quality assets

Source: Vendor information


Premier Lodgehigh quality assets

  • 48% of Premier Lodge rooms opened within last four years

  • 88% of lodges built or refurbished completely within last three years

  • 19 pub restaurants re-branded to Brewers Fayre by March 2005

Source: Vendor information


the acquisitionassets

Source: Vendor information * inc. long leases at peppercorn


incremental capital employed


incremental profit

  • Existing business

  • Underlying growth

  • Recent and new openings

  • Revenue enhancement

  • Cost synergies


incremental profitexisting business

Source: Vendor information


incremental profitfrom recent and new openings

* Based on 2003 profit contribution per room


incremental profitrevenue enhancement

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

    • reservations

    • cross-sell

    • estate density

    • heightened consumer awareness

Benefits accruing to both Premier Lodge and Travel Inn estates


incremental profitcost synergies


one-off costs


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


key ratios


key ratios

Source: Whitbread PLC published accounts/vendor information


premier travel innhotels and bedrooms

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


30,000

25,000

20,000

15,000

10,000

5,000

0

1996/7

1997/8

1998/9

2000/1

2001/2

2002/3

2003/4

2004/5E

1999/00

Whitbread budget hotelsroom growth 1997-2005


premier travel inn

management biographies


Career highlights

  • joined Travel Inn as managing director in 2003

  • 2001-3: managing director, Costa

    Also

  • marketing & strategic planning director, Whitbread Restaurants

  • sales & marketing director, Whitbread Inns

  • managing director, Aramark Food Services Plc

    Age50

Mike Tye

managing 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 & Coleman

    Age37

Neil Cooper

finance director, premier travel inn


Career highlights

  • joined Travel Inn as sales and marketing director in April 2001

    Also

  • joined Unilever in 1987 as a systems engineer before moving into marketing

  • gained widespread experience working across a number of food brands in different European markets

  • in August 98 promoted to marketing controller for margarine and spreads

    Age39

Gill Baker

sales and marketing director, premier travel inn


Career highlights

  • operations director - Managed Travel Inn

  • previously regional operations director for MTI’s North

    Also

  • strategic planning & business analysis manager (leisure division), The Rank Group

  • regional manager London & South, Odeon Cinemas Ltd

  • regional director, London & South, Odeon Cinemas Ltd

    Age33

Paul Flaum

operations director, (managed) premier travel inn


Career highlights

  • operations director for Travel Inn

  • 2 years operations director Brewers Fayre/Brewsters

    Also

  • 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 Islands

    Age51

Darroch Crowford

operations director, premier travel inn


Career highlights

  • joined June 2003 as property director

    Also

  • head of acquisitions then head of development, Kingfisher

  • head of property, BAA

  • various senior positions in other leisure companies such as Rank/Luminar

  • developed property side of the BigW chain, Woolworths

    Age40

Deborah Parker

property director, premier travel inn


Career highlights

  • joined 2003 as HR Director – Travel Inn

  • HR director – Endeva

    Also

  • HR director Thorn Managed Services

  • head of HR – Thorn UK

  • compensation & benefits mgr, Thorn UK

  • Safeway Stores plc

  • Asda stores

    Age34

Tim Painter

human resources director, premier travel inn


Career highlights

  • joined in April 1998 as IT Director

  • previously business systems manager, finance services division, Whitbread

    Also

  • project accountant, services division, Whitbread

  • senior business consultant, Whitbread

    Age40

Susan Thomas

systems director, premier travel inn


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