Interim Results 2010/11 19 October 2010

1 Anthony Habgood Chairman

2 Christopher Rogers Group Finance Director

3 Summary H1 2010/11

H1 2010/11 H1 2009/10 Change

Underlying profit before tax £151.8m £118.2m 28.4%

Profit before tax, £146.0m £110.5m 32.1% pre-exceptional EPS underlying (diluted) 61.27p 47.33p 29.5% Proposed interim dividend 11.25p 9.65p 16.6%

4 Summary – Profit & loss H1 2010/11

£m H1 2010/11 H1 2009/10 Change

Revenue 1 805.4 703.3 14.5%

Profit from operations 173.6 140.0 24.0% Central costs (10.2) (9.2) (10.9)%

Interest (11.6) (12.6) 7.9%

Underlying profit before tax 151.8 118.2 28.4%

1 includes exceptional revenue of £5.0m in respect of VAT refund on gaming machine income

5 Summary – Underlying profit & loss H1 2010/11

£m H1 2010/11 H1 2009/10 Change

Underlying profit before tax 151.8 118.2 28.4%

Pension finance cost - IAS 19 (5.8) (7.7) 24.7%

Profit before tax, 146.0 110.5 32.1% pre-exceptional Taxation (42.7) (34.1) (25.2)%

Net profit, pre-exceptionals 103.3 76.4 35.2%

Exceptionals 12.7 (3.3)

Profit for the year 116.0 73.1 58.7%

6 Revenue by business segment H1 2010/11

£m H1 2010/11 H1 2009/10 Change

Hotels & Restaurants 608.0 548.8 10.8%

Costa 198.5 155.4 27.7%

Less: inter-segment 1 (1.1) (0.9) (22.2)%

Revenue 805.4 703.3 14.5%

1 Sales between segments

7 Hotels & Restaurants revenue H1 2010/11

£m H1 2010/11 H1 2009/10 Change

Premier Inn revenue 355.7 312.1 14.0%

Restaurants revenue 1 247.3 236.7 4.5% Exceptional revenue 2 5.0 -

Hotels & Restaurants 608.0 548.8 10.8%

1 Revenue from joint site and stand alone restaurants 2 Revenue arising from refund of VAT on gaming machine income 8 Like for like sales H1 2010/11 12.0% 10.1% 10.0% 8.2% 8.5% 8.0%

6.0% 4.2% 4.0% 2.5% 1.8% 1.7% 2.0%

0.0%

-0.8% -2.0% Restaurants Costa

-4.0% (2 openings, net 1) (137 new stores, net 116)

-6.0% H1 2009/10

-8.0% -7.5% H2 2009/10 H1 2010/11 -10.0% (795 new rooms, net 789)

9 Profit by business segment H1 2010/11

£m H1 2010/11 H1 2009/10 Change

Hotels & Restaurants - UK 157.1 129.1 21.7% Hotels & Restaurants - (3.1) (1.7) Overseas Total Hotels & Restaurants 154.0 127.4 20.9%

Costa - UK 19.3 12.5 54.4%

Costa - Overseas 0.3 0.1

Total Costa 19.6 12.6 55.6%

Profit from operations 173.6 140.0 24.0%

10 Summary - Profit & loss H1 2010/11

£m H1 2010/11 H1 2009/10 Change

Revenue 1 805.4 703.3 14.5%

Profit from operations 173.6 140.0 24.0% Central costs (10.2) (9.2) (10.9)%

Interest (11.6) (12.6) 7.9%

Underlying profit before tax 151.8 118.2 28.4%

1 includes exceptional revenue of £5.0m in respect of VAT refund on gaming machine income

11 Interest charge H1 2010/11

£m H1 2010/11 H1 2009/10

Underlying interest charge (11.6) (12.6)

Pension finance cost – IAS 19 (5.8) (7.7)

Interest charge, pre-exceptional (17.4) (20.3)

Average debt in first half £484.2m (2009/10 £599.7m)

12 Exceptional items H1 2010/11

£m H1 H1 2010/11 2009/10 Refund of VAT on gaming machine income 5.0 -

Reduction in tax rate 9.3 -

Tax on exceptional items (1.6) 1.3

Reorganisation costs - (4.3)

Other - (0.3)

Exceptional items 12.7 (3.3)

13 Cash flow H1 2010/11

197.6 200 Half year debt down £46.2m to £467.2m 180

160

140

120 £m (88.8) 100

80 1.8 60 46.2

40 (59.5) (4.9) 20

0 Cash flow from Cash capital Interest and Tax Other Decrease in net operations expenditure dividends debt

14 Capital expenditure HY 2010/11

Split between businesses Expansionary v Maintenance

£m £m 17

34

72 55

Hotels and Restaurants Costa Expansionary Maintenance

15 Capital expenditure

• Total Capex for 2010/11 to be c.£265m • Capex for 2011/12 currently planned at c.£330m as room openings will now be at least 3,500

16 Pension

• IAS 19 pension deficit at half year £500m (£403m net of tax) compares to £434m (£341m net of tax at full year) • Full year pension fund interest charge £11.5m • Second £39m tranche of new pension structure implemented bringing total to £141m with total cash tax benefit of £39m over 2010 - 2012

17 Other financial items

• Effective tax rate for the year of c.29.5% • £102m Private Placement in August 2010 at blended rate of 3.8%, first move towards diversification of funding • 25% of £8m customer-facing initiatives and marketing expenditure spent in the first half, balance to be spent in the second half • Minimum wage increase in October 2010 2.2%: modest inflation on the horizon

18 Summary

• Underlying profit before tax £151.8m + 28.4%

• EPS, Underlying diluted 61.27p + 29.5%

• Proposed interim dividend 11.25p + 16.6%

19 Alan Parker Chief Executive

20 Agenda

1. What we’ve achieved

2. How we’ve done it

3. Prospects for the future

21 Highlights

1. Underlying PBT £151.8m +28.4% 2. Group PBIT margin: 20.4% (2009/10: 18.6%) 3. 12 month TSR: +53.3% (FTSE 100 +15.3%) 4. ROIC: 13.1% (2009/10: 11.2%)*

Excellent results that build on the increased profits achieved in 2009/10

* Calculated on an annualised basis

22 Highlights

Hotels & Restaurants • Occupancy up 9.2ppts to 79.3% • 7% more restaurant customers: menu value strategy and increased hotel occupancy • Secured pipeline of c.11,000 rooms + 25% growth in UK + 3,500 to open 2011/12

23 Highlights

Costa • Operating profits up 55.6%. Like for like sales up 8.5% • 34 consecutive quarters of like for like growth • 116 new stores: worldwide total 1,716 stores

24 2010/11 dual-track strategy

1. Expand market share and achieve brand leadership

2. Improve efficiency and margins

25 Revpar outperformance

Premier Inn outperformed budget sector by 5.7ppts and total market by 3.5ppts 15.0%

10.0%

5.0% year-on-year

0.0% Premier Inn Revpar Branded Hotel Market -5.0% Budget Hotel Sector

-10.0% Like for like for Like

-15.0% Q1Q1 Q2Q2 Q3Q3 Q4Q4 Q1Q1 Q2Q2

2009/10 2009/10 2010/112010/11

Source: TRI/

26 UK’s favourite hotel brand in just two years

Net score %

Premier Inn 19.9%

Hilton 16.2%

Marriott 15.8%

Travelodge 12.7%

Holiday Inn 10.7%

Best Western 6.7%

Express by Holiday Inn 5.8%

Ibis 2.3%

Comfort Inn -1.7%

Source – YouGov Brand Index for hotels March - August 2010

27 Restaurants outperforming the market

Like for like % growth

8.0%

6.0%

4.0%

2.0%

0.0%

-2.0%

-4.0%

-6.0% Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug

Market Whitbread

Source: Coffer Peach Business Tracker

28 Outperforming with strong like for like sales

% Like for like sales 14.0%

12.0% Costa UK like for like sales 10.0%

8.0%

6.0%

4.0%

2.0% BRC-KPMG like for like retail sales 0.0%

-2.0% Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug 2009 2010 -4.0%

29 the UK’s favourite coffee shop

Net score %

Costa 14%

Pret a Manger 13%

Nero 9%

Subway 8%

EAT 5%

Starbucks 3%

0 2 4 6 8 10 12 14 16

Source – YouGov BrandIndex for coffee and sandwich shops March - August 2010

30 Project 80% occupancy Launched Spring 2009

Increased & 1 focused Leading choice for leisure travellers advertising

2 Dynamic Like for like occupancy +9.2ppts: pricing Revpar +9.4%

Widened Re-launched Premierinn.com plus new 3 on-line distribution international booking channels

Business 4 +24% driven by new accounts Account sales

31 Increased & focused advertising Leading choice for leisure guests

25

Premier Inn 20

Travelodge 15

Upper full service

10 Mid-market full service

5

0 2005 2006 2007 2008 2009 2010

Source: BDRC British Hotel Guest Survey 2010: Wave 4. Sept 2010. Base: All leisure travellers

32 Advertising

33 Dynamic pricing Premier Offers selectively drives leisure volume

30% Average 8.5% of rooms sold

25% New Year’s Eve Easter weekend

20% Whitsun Bank August Bank Holiday Holiday Valentine’s May Bank % rooms sold % rooms weekend 15% Holiday October Half Term 10% Launch of Premier Offers

5%

0% 2021 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 1 2 3 4 5 6 7 8 9 1011 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 July 2009 Sept 2009 Nov 2009 Jan 2010 March 2010 May 2010 Aug 2010

Source: Whitbread internal data

34 Widen on-line distribution On-line now 65% of reservations

• Over 20% increase in revenue via Premierinn.com • Twice benchmarked best travel website and won Best Hotel Website • Incremental overseas reservations: Bookings.com, GDS and our new international websites

35 Business Account sales

• Year to date revenues top £100m for the first time - up 24% • More large businesses are using Premier Inn

' ,$""#!$""# ,-&"%.&&'(//$-%0'1.2.%-.' + ,('"#!('"#

!()'* ,(&"#!(&"# ,(%"#!(%"# $%?#1@72>;3>#A>;2#B@#A>;2# ,($"#!($"# ,(""#!(""# ,'"#!'"# ,&"#!&"#

!"##"$%&' First half year ,%"#!%"# cumulative sales ,$"# !$"# MAT ,"#!"#

2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 $"".-$""'# $""'-$""/# $""/-$"("# $"("-$"((#

$""&#-#$"".# )*+# 01234#56#7898:;<=>#3;:>3# )*+# Source: Whitbread internal data

36 Restaurants

Barnsley, joint site opened April 2010 with 110 rooms

37 Successful volume and value strategy • 30% take up value offers on the menu • Over 250,000 £20 meal deals sold – up 48% • New theme nights and buffets introduced

38 Maintained high quality estate

• 71 restaurants refurbished in H1

• Contemporary estate: 70% refurbished in last two and a half years

• Average cost of refurbishment £125,000

39 2010/11 commercial action plan

Flat 5.5% of coffee sales. Premium product 1 White

2 Over 3 million members since March Club

3 Ice Cold 16% of summer beverage sales. Costa Like for like’s +39%

Brand Press and online + 1st Costa TV campaign 4 building

40 Advertising

41 Pipeline targets 25% increase in UK rooms No. rooms &"D"""# EED"""# EED"""#

E"D"""# %.D(""# %ED"""# %CD&""#

%"D"""#

CED"""#

C"D"""# 0B2>7;34#$"("F((# 0B2>7;34#$"((F($# +;2G>4#$"(CF(%# Planned UK estate

42 International

Build understanding

• 3 hotels (819 rooms) Middle • 1 hotel under East construction in Abu Dhabi Prove model and maximise • 1 hotel (105 rooms) performance • 1 hotel under India construction in New Delhi

43 Continual growth

Stores 3,000 CD"""#

$DE""# (D%""# 1@4>2@;3# &E"#1@4>2@;3#

(D"""# (D&""#HI#34B2>3# (D$""#HI#34B2>3# E""#

"# 0B2>7;34#$"("F((# +;2G>4#$"(%F(E#

44 International Focus on big 5 markets

Delivering Russia on our Current stores: 25 potential H1 2010/11: Central Europe 582 stores, Current stores: 198 China to c.1,400 Current stores: 71 by 2014/15 Middle East India Current stores: 228 Current stores: 60

45 More potential identified

• Now operate 77 stores in Poland – to grow by 30% to 100 stores over next 2 years

• Strong platform to grow Central Europe

• Performance in line with plan

46 Burgess Hill Targeted 70% energy and 60% water savings

47 New schools in coffee growing communities

New recyclable cup

Reduced milk packaging

Rain Forest Alliance

4848 Strong prospects for the future

• Premier Inn and Restaurants Strong No.1 UK hospitality brand brands • Costa No.2 world wide coffee shop brand

Strong • Valuable asset base balance sheet • Flexible funding options

Strong • Relentless focus on customers team • Disciplined approach to cost control

49 APPENDIX

50 )%&:,7 H*/69 4)%-671(T1(<1&%9-%'(B,:$-,/5 )T%'("*9-9 4<@AB5 <1"*+%(2%8*7%(=>%'("*9-9 4!))5 !"#$%&%'()**+(),-%( General Standard Information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

51 Hotels & Restaurants Standard Information pension and centrally held provisions. costs. 5 4 3 2 1 Operating Margin Operating REST Growth Sales for Like Like PI Growth Sales for Like Like (Total) Yield Like) for (Like Occupancy (Total) Occupancy (Total)ARR ROIC Expenditure Capital Cash Assets Net Total EBIT before Operations from EBITDAOperations from IAFC IBFC Totalexceptionals - pre Sales Restaurants - Sales Premier - Sales Inn Net Assets IAFC IBFC Sites Joint - Sales Net Assets IAFC IBFC Sales exceptionals KeyOperating Measures (UK) al Tot Joint Solus Includes intangible capital expenditure capital intangible Includes Includes both joint site and standalone restaurants. ROIC is based upon segmental net assets with no allocation for UK debt, taxation liabilities, liabilities, taxation for debt, UK allocation no with assets net segmental upon based is ROIC Rent, include: costs Fixed pre-opening) and insurance (including Other and Depreciation Rates, Ireland. and India Solusincludes 2 2 5 3 1 4 £m £m £m £m £m £m £m £m £m £m £m £m £m £m £m £m % % % % % % £ £ HY2010/11 2,269.5 1,313.9 £42.60 £54.26 25.5% 10.1% 79.3% 78.5% 11.8% 154.0 193.8 194.4 296.0 603.0 247.3 355.7 129.7 180.3 401.1 955.6 115.7 201.9 4.2% 71.7 64.7 HY2009/10 2,246.6 1,290.5 £39.09 £56.09 23.2% 70.0% 69.7% 10.9% 127.4 166.0 163.8 257.8 548.8 236.7 312.1 109.4 158.4 372.6 956.1 176.2 -7.5% 1.8% 67.9 54.4 99.4 FY 2009/10 2,266.4 1,096.0 1,271.3 £37.99 £54.85 22.5% 70.2% 69.3% 10.9% 114.2 247.0 325.1 317.3 510.1 466.2 629.8 205.3 304.9 732.3 995.1 112.0 205.2 363.7 -4.3% 1.7%

52 Hotels & Restaurants cont. Standard Information - Taybarns - - - Numbers with adjacent Premier Inns Managed - - Taybarns - Table Table - Brewers Fayre - Beefeater TotalSolus Contract Management & Franchise - - Associate Managed - TotalSolus Contract Management & Franchise - - Associate Managed - RestaurantDetails Outlet International UK al Tot Sites Joint Solus Number of Hotels International UK al Tot Sites Joint Solus Number of Rooms HY2010/11 43,588 42,509 19,559 22,950 21,586 1,079 1,082 597 592 339 102 114 116 374 111 127 129 339 253 224 282 28 7 7 5 1 HY2009/10 41,866 41,173 19,115 22,058 20,694 1,082 581 578 331 113 114 375 108 130 130 331 247 218 693 282 97 28 7 7 3 1 FY 2009/10 42,799 41,720 19,229 22,491 21,127 1,079 1,082 588 583 333 113 114 373 109 127 130 333 250 221 282 99 28 7 7 5 1

53 Costa Standard Information 2 1 liabilities, pension and centrally held provisions held centrally and pension liabilities, - International Franchise - International JV - International Equity - UK Franchise - Equity ROIC Margin Operating Growth Sales for Like Like Expenditure Capital Cash Net Assets EBITOperations from EBITDAOperations from Sales o lItentional ernat Int al Tot UK al Tot Outlet details KeyOperating Measures financials Headline International JV includes Shanghai which is a subsidary with a 51% interest 51% a with subsidary a is which Shanghai includes JV International ROIC is based upon segmental net assets with no allocation for UK debt, taxations taxations for debt, UK allocation no with assets net segmental upon based is ROIC 1 - Total Business 2 £m £m £m £m £m % % % HY2010/11 HY2010/11 35.6% 1,716 1,134 121.4 198.5 9.9% 8.5% 17.1 19.6 29.9 582 394 445 689 96 92 HY2009/10 HY2009/10 32.7% 1,389 155.4 8.1% 2.5% 85.9 12.6 21.5 415 364 974 337 637 9.1 51 FY 2009/10 FY 2009/10 36.7% 10.6% 1,600 1,069 340.9 5.5% 17.2 98.6 36.2 54.0 531 373 412 657 69 89

54 55