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Preliminary Results 2007

Preliminary Results 2007. 29 November 2007. Holidaybreak plc Agenda. Bob Ayling (Chairman) Bob Baddeley (Group Finance Director) Carl Michel (Group Chief Executive) Q&A . Holidaybreak plc Highlights. Good performance Dividend per share +10%

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Preliminary Results 2007

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  1. Preliminary Results 2007 29 November 2007

  2. Holidaybreak plcAgenda Bob Ayling (Chairman) Bob Baddeley (Group Finance Director) Carl Michel (Group Chief Executive) Q&A

  3. Holidaybreak plcHighlights • Good performance • Dividend per share +10% • Transformational year with new 4th trading division • Sales mix of group is now: • Hotel Breaks (34%); • Adventure Travel (21%); • Camping (24%); and • Education (21%)* • Mix will continue to evolve • Focus on delivering long-term, sustainable value • Current trading in line with expectations * Based on last full year audited results at PGL and NST

  4. Preliminary Resultsfor the year ended 30 September 2007 4

  5. Holidaybreak plcPreliminary Results 2007 FINANCE DIRECTOR’S REVIEW BOB BADDELEY

  6. Preliminary Results 2007Financial Highlights • Profit before tax* +21% to £40.0m (2006: £33.1m) • Headline EPS* +21% • Dividend +10% • £138.6m net investment on acquisitions *Stated before amortisation of intangible assets acquired via business combinations of £2.5m (2006: £1.0m).

  7. Preliminary Results 2007Income Statement *Stated before amortisation of intangible assets acquired via business combinations of £2.5m (2006: £1.0m).

  8. Preliminary Results 2007Divisional Results *Stated before amortisation of intangible assets acquired via business combinations of £2.5m (2006: £1.0m).

  9. Preliminary Results 2007Operating Margins* *Stated before amortisation of intangible assets acquired via business combinations of £2.5m (2006: £1.0m).

  10. Preliminary Results 2007Impact of Acquisitions • Period from date of acquisition to 30 September 2007 • NST acquired on 30 September 2007 *Stated before amortisation of intangible assets acquired via business combinations of £0.8m.

  11. Preliminary Results 2007Cash Flow • Net debt increased by £143.4m, following acquisitions of: - PGL £ 97.6m - NST £ 38.9m - WETB £ 2.1m - Net of cash acquired • Interest cover (pre-amortisation) 11.5 X (2006: 16.0 X) • Average interest rate on loans 5.3% inclusive of margin - Currently 6.89% (£) and 5.04% (€) - Capped at 7.3% (£) and 5.3% (€), including margin

  12. Preliminary Results 2007Cash Flow

  13. Preliminary Results 2007Balance Sheet (1)

  14. Preliminary Results 2007Balance Sheet (2) • Acquired intangibles £23.9m (2006: £2.1m) - Annual amortisation £2.5m • Bank facilities £255.0m - Adequate headroom even at peak utilisation period • Deferred tax on acquisitions £31.6m - Corresponding increase in goodwill

  15. Preliminary Results 2007Capital Expenditure & Disposals • 2007 capex (net of disposals) of £12.9m (2006: £4.6m) • 2008 Camping capex to be at historic levels – c.1,000 mobile-homes to be replaced - anticipated net spend £10.0m • 2008 Group capex increase to c.£19.0m - incl. £4.0m on IT - incl. £3.0m on maintenance capex in Education Division

  16. Preliminary Results 2007Financial Summary • Margins well above travel industry norms • All divisions cash generative - But capex to be higher in 2008 • Healthy return on invested capital - ROACE 21%

  17. Holidaybreak plcPreliminary Results 2007 CEO REVIEW CARL MICHEL

  18. Preliminary Results 2007Strategic Developments • PGL/NST fits with the strategic framework announced last year • Healthy pipeline of other deal opportunities in Europe and UK -Product extensions - New sales areas • Organic growth opportunities in each division • All areas looking to increase ‘value added’ – to add to differentiation and defensibility

  19. Strategic FrameworkProgress this year • BUILD ON CORE COMPETENCES - West End Theatre Bookings leverages Superbreak’s London strength and enhances our ability to ‘bundle’ • DEVELOP A MULTIPATH APPROACH- Able to make two key acquisitions - Organic development – Own a Holiday Home • PURSUE SUSTAINABLE FASTER GROWTH- Both carpe diem/TravelWorks and PGL have grown at over 10% with margins above industry norms - New division has raised the average growth rate of the Group • DIVERSIFY SALES MIX - While sales remain focused on the UK, the Education Division is less influenced by consumer spending shifts. Parents view trips as non-discretionary spending

  20. Preliminary Results 2007Corporate Activity …. Continuing to review a number of opportunities In last 15 months, acquired 8 businesses for a total investment of c.£145m 20

  21. Preliminary Results 2007HOTEL BREAKS HOTEL BREAKS • EBITA of £17.0m (+1.0%) on sales of £139m (+13.3%). Margins were held back by investment in web/IT • Acquisition of West End Theatre Bookings at the end of January – increased scale allows us to buy out some entire West End theatre performances • Growth in ‘bundled’ sales from 30% to over 40% - substantially higher transaction values • Overseas hotels – have reached our target of 5,000 hotels and substantially increased our presence outside of Europe and in secondary destinations • Progress on all websites – with user-generated content, really simple syndication, Google Local, video-streaming • Target audience remains couples aged 40-70 • Bookit has done well with hotelletje.nl – its small hotels website – now accounting for over 15% of their turnover

  22. Preliminary Results 2007ADVENTURE TRAVEL ADVENTURE TRAVEL • EBITA of £6.6m (+11.9%) on sales up 18.0% at £90.0m • Launch of new specialist Explore brochures – Archaeology and Eclipse/Astronomy – seeking to capitalize on trend to more niche ‘value added’ interests • Families product continues to grow strongly in both UK (12% of sales) and Holland (18% of sales) • New Explore website launched with more of a community feel – weblogs, podcasts, destination information • Americas and Asia performed well, Middle East/Egypt down around 20% but decline ended in late summer • carpe diem and TravelWorks (German businesses acquired in September 2006) performing ahead of expectations, with particularly good growth in work experience and high school exchange programmes

  23. Preliminary Results 2007CAMPING CAMPING • EBITA of £11.7m (-6.3%) on sales of £102.8m (-2.6%) • Capacity down 4% (mobile-homes –2%, tents –12%) • Particularly strong growth in Irish market. Most markets performed well • Mobile-home occupancy increased to 100 days this year (up 4 days on last year) • Late UK booking market good, thanks in part to bad summer weather but also due to successfully holding back some high season capacity • Cost savings next year through decision to close distribution depot in Middlewich • Successful start to ‘Own a Holiday Home’

  24. Preliminary Results 2007EDUCATION EDUCATION • EBITA of £8.5m on sales of £26.1m reflecting partial year ownership • PGL performing ahead of the expectations we had at the time of the acquisition • On budgeted revenues for 2007/08, this is now the second largest division ahead of Adventure and Camping • New division reduces our reliance on more discretionary consumer travel expenditure • Division has unusually good visibility in terms of forward revenues – PGL is 86% and NST is 70% booked for 2008. (UK school adventure centres are already 97% booked for 2008 and 24% for 2009) • Divisional management now driving through the synergies identified at the time of acquisition from PGL and NST • Considerable potential to deliver long-term value as we look at other opportunities in the sector

  25. Strategic FrameworkTargets for next year • BUILD ON CORE COMPETENCES - Look for more synergies within and across divisions - PGL-run Activity Stations for Camping Division sites - More use of customer address lists - Safety management excellence • DEVELOP A MULTIPATH APPROACH - Continue to source sensible bolt-on acquisitions (e.g. Select Sites on 01.10.07) - Organic opportunity – Explore Independent – to launch in Spring 2008 • PURSUE SUSTAINABLE FASTER GROWTH - Ongoing strategic review to identify areas with faster growth potential - Look to increase defensibility by focus on more value added • DIVERSIFY SALES MIX -Potential for acquisitions to speed up the change

  26. Preliminary Results 2007OUTLOOK • Overall outlook encouraging – overall group sales up 6%. Satisfactory trading outcome anticipated - Sales intake for Hotel Breaks up 12% - Education Division revenues up 9% - Sales intake up 5% in Adventure - with recovery in Middle East - Camping down 1% on capacity down 5% (-0.4% in mobile-homes, -20% in tents) • Business is resilient – we remain confident despite forecast slowdown in economic growth - Hotel Breaks has historically done well in times of tight spending as our value to hoteliers increases - Adventure Travel average age is 50 – customers less exposed to credit issues - Camping – will be seen by families as less costly than a long haul trip - Education – less of a discretionary spend item • Opportunities likely to arise to make further acquisitions at sensible valuations • More to play for

  27. Q&A

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