Interim Results 2008/09 Anthony Habgood Chairman Christopher Rogers Finance Director 4 Summary H1 2008/09

H1 2008/09 H1 2007/08 Change

PBT from continuing £123.3m £99.4m 24.0% operations, pre exceptionals

EPS continuing operations, 49.89p 36.50p 36.7% pre exceptionals (diluted) EPS total operations pre 49.89p 46.11p 8.2% exceptionals (diluted)

Proposed interim dividend 9.65p 9.10p 6.0%

4 5 Summary – profit & loss H1 2008/09

£m H1 2008/09 H1 2007/08 Change

Revenue 682.2 605.8 12.6% Profit from operations 146.5 130.0 12.7% Central costs (11.1) (12.9) 14.0% Interest (12.1) (17.7) 31.6%

PBT from continuing 123.3 99.4 24.0% operations, pre exceptionals

5 6 Summary – profit & loss continued H1 2008/09

£m H1 2008/09 H1 2007/08 PBT from continuing 123.3 99.4 operations, pre exceptionals Taxation (36.9) (27.5) Net profit from continuing 86.4 71.9 operations Discontinued operations 00.0 19.0 Total profit, pre exceptionals 86.4 90.9

Exceptionals (46.5) 409.7

Profit for the year 39.9 500.6

6 7 Treatment of businesses within segmental analysis

• Hotels & Restaurants

• The results of Restaurants and have been combined into a new segment Hotels & Restaurants. Sales for Premier Inn and Restaurants have been separately disclosed

• Disclosure schedules include breakdown between Solus and Joint Sites

 Solus Sites consist of standalone Premier Inn hotels and integrated restaurants (e.g. County Hall) or Premier Inn hotels with a third party restaurant

 Joint Sites consist of sites with a combined Premier Inn and Whitbread restaurant. This includes the remaining standalone restaurants

7 8 Revenue by business segment

£m H1 2008/09 H1 2007/08 Change

Hotels & Restaurants 555.1 493.6 12.5%

Costa 123.2 98.1 25.6% Less: inter-segment (2.1) (1.5) revenue

Other 6.0 15.6 (61.5)%

Revenue from continuing 682.2 605.8 12.6% operations

8 9 Hotels & Restaurants revenue

£m H1 2008/09 H1 2007/08 Change

Premier Inn revenue 311.0 264.1 17.8%

Restaurants revenue 244.1 229.5 6.4%

Hotels & Restaurants 555.1 493.6 12.5%

9 10 Like-for-like sales

% H1 2008/09 H1 2007/08

Premier Inn 10.1 10.9

Restaurants 4.5 1.5 Hotels & Restaurants 7.5 6.2

Costa 3.7 6.8

Total 7.0 6.3

10 11 Profit by business segment

£m H1 2008/09 H1 2007/08 Change Hotels & Restaurants - UK 140.7 124.3 13.2% Hotels & Restaurants - overseas (1.5) (0.9) (66.7)%

Total Hotels & Restaurants 139.2 123.4 12.8%

Costa - UK 8.5 7.6 11.8% Costa - overseas (1.2) (1.0) (20.0)%

Total Costa 7.3 6.6 10.6%

Profit from operations 146.5 130.0 12.7%

11 12 Summary – profit & loss H1 2008/09

£m H1 2008/09 H1 2007/08 Change

Revenue 682.2 605.8 12.6% Profit from operations 146.5 130.0 12.7% Central costs (11.1) (12.9) 14.0% Interest (12.1) (17.7) 31.6%

PBT from continuing 123.3 99.4 24.0% operations, pre exceptionals

12 13 Continuing interest charge

£m H1 2008/09 H1 2007/08

Interest on borrowings (15.6) (26.0) Interest on deposits 0.7 3.7 Pension credit/(charge) 1.8 2.7 Other 1.0 1.9 Net interest charge (12.1) (17.7)

• Average debt £457.3m (H1 2007/08 £752.3m)

13 14 Exceptional items

£m H1 2008/09 H1 2007/08 Business disposals: 0.0 384.1 T.G.I.Friday’s 0.0 12.6 Other exceptional items: Exceptional tax arising from HBA abolition (43.9) 0.0 Exceptional pension credit 0.0 10.0 Interest on debenture redemption 0.0 (12.5) Other/reorganisation/rebranding (6.2) (1.2) Corporate tax on exceptionals 3.6 (1.2) Deferred tax adjustment (inc. rate change) 0.0 17.9 Total net exceptional profit (46.5) 409.7

14 15 Cash flow Group year-on-year by items

£m H1 2008/09 H1 2007/08 Cashflow from operations 169 167 Capital expenditure (149) (134) Disposal of fixed assets 0 (2) Interest, tax and dividends paid (73) (78) Business cashflows (53) (47) Additional pension payments (50) (50) Disposal/(acquisitions and investments in JVs) (29) 982 Special dividend, share buybacks (24) (292) Other (2) 6 (Increase)/decrease in net debt (158) 599

15 16 Capital expenditure

£m H1 2008/09 H1 2007/08 Hotels & Restaurants 131 97 Costa 17 16 Corporate/Discontinued 1 21 Total 149 134

• Full year forecast – c.£300-320m

16 17 Pension fund

• Pension deficit on IAS19 basis increased as at the half-year date from £33m to £153m • Inflation • Fall in asset values

• Triennial actuarial valuation in progress • Latest mortality assumptions • Gilts based liability calculation • Recovery plan

17 18 Costs

Cost reduction plan

• On target for full run rate of £25m by the end of 2010/11

• Estimated run rate in 2009/10 £20m Cost inflation – outlook unpredictable

• Wages +4% (impacts 30% of cost base)

• Utilities +20% (impacts 4% of cost base)

• Input /drink +4-5% (impact 17% of cost base)

18 19 Capital structure

• Strong balance sheet with moderate levels of gearing • Bank debt finance with large asset backing

• Total facilities £1.16bn

• Maturity period December 2010-2013 • Leverage: 3.5 adjusted Net debt to EBITDAR

19 20 Financial summary

• Sales from Continuing Whitbread up 12.6%

• Like-for-like sales up by 7.0%

• PBT from continuing operations, pre exceptionals up 24.0% to £123.3m

• Growth in diluted EPS from total operations pre exceptional of 8.2%

• Interim dividend up 6.0% to 9.65p

20 Alan Parker Chief Executive 22 Highlights Strong sales and profits growth across the Group

• Re-branded Premier Inn outperforms the market

• New rooms growth continued

• Effective turnaround of Restaurants • Costa store expansion continued, with positive trading

• Group operating profit margin increased to 20.0%

22 23 Operational performance Business in good shape

• Revpar grew 6.5%, outperforming the market by 2.9%* • Opened 15 new hotels: 1,380 rooms (2007/08: 830 rooms)

• Restaurants delivered strong covers growth of 8.4% • launched

• Costa store expansion: 156 new stores (2007/08: 145 stores) • Costa transaction volumes increased by 3.2%

*source: TRI Hotstats Aug 2008 for budget and budget / mid market hotels sectors 23 24 Whitbread strategy: positioning brands in attractive, value-for-money sectors • Budget hotels • Structural growth in budget hotel sector • “Smarter buying” by business customers • Restaurants • Brands remodelled – value-for-money propositions • Strong Joint Site business model • Coffee Shops • Still “an affordable treat” – cultural part of the way we live • Market leadership in UK, establishing an international brand

• Streamlined organisation – cost reduction

24 25 In the regions business guests save £44 per night compared to 3 and 4 star competitors

Premier Inn Competitors Savings

ARR £53* £73 £20 28%

F&B, etc. £34** £58 £24 41%

Total savings £44 33%

*ARR source: TRI Hotstats – August 2008 sample of over 500 hotels ** Source: Internal research comparing F&B, WiFi and parking 25 26 In London, business guests save £49 per night compared to 3 & 4 star competitors

Premier Inn Competitors Savings

ARR £69* £118 £49 41%

• 76% of business guests rate Premier Inn as “very good” or “good” value for money, an improvement of almost 2% on last year

*ARR source: TRI Hotstats – August 2008 sample of over 500 hotels 26 27 Business Account sales up 36%

• Business Account customers spending more with Premier Inn – £86 million (H107: £63.4m)

• New Business Account customers up 16% (1,800 new companies in H1)

• September was a record month with £16.7m of sales, adding 368 corporate customers

27 28 Strong growth opportunity in budget hotel sector • Budget hotel sector forecast to grow

• Review pace and phasing of expansion as necessary

• Strong pipeline of new openings targeting 4,000 rooms for 2008/09 (2007/08: 3,400)

• Hotel acquisitions becoming potentially more attractive

• Scale in the estate drives choice and cross-selling opportunities

• Specific international expansions: Middle East and India

28 29 Remodelled Restaurant brands Recognised by customers as value for money with high recommendation

Brand Number* Status Customer ratings Value for Recommend money to friends

Beefeater 127 Refurbishment 84% 88% complete Table Table 106 Launched 81% 83% May 2008 126 Refresh to start 84% 84% H2

*Post M&B asset swap 29 30 Taybarns Very positive customer response to trial

30 31 Taybarns

31 32 Taybarns

32 33 Taybarns

33 34 Strong Joint Site business model

• 65% of WHR’s unit operating profit • Choice of best sites in competitive property market and optimal use of land • Branded Restaurants attract guests to Premier Inn • Overnight guests provide secure market for branded Restaurants • Overhead and operating cost synergies

• Joint Site model delivers strong returns

34 35 The Costa “affordable treat” Part of modern lifestyles

• 43% of British adults visit coffee shops each month*

• 72% of customers drink in store with 42% food capture • 48% of Costa visits are made by customers who visit Costa 3+ times a week

*source: YouGov U&A 35 36 Costa growth momentum continues

• New target of 350 stores opening this year (2007: 285) • 200 in UK • 150 overseas • Further growth opportunities in UK, e.g. • Retail parks • Train stations • Airports • Motorway service areas • Establishing an international brand – 26 countries

36 37 Efficiency programme on track

Streamlined, lower cost Simpler systems and operating structure processes

£25 million cost saving by 2010/11 Outsourcing programme Renegotiating supplier - Food logistics contracts - Transactional accounting - Payroll

37 38 Summary: relative resilience, strong position

• Excellent results • Streamlined organisation with strategic focus and a cost reduction programme • Simple capital structure with conservative leverage • Momentum will be continued through disciplined growth strategy • Leading in attractive, value-for-money sectors • Continued good progress since the end of August

38 39

39 APPENDIX 2

HY 2008/09 HY 2007/08 HY HY FY 2008/09 2007/08 2007/08 Sales Analysis Number of Rooms Solus Sales - Solus Sites £m 179.6 153.2 - Managed 18,636 16,046 17,856 Sales - Joint Sites £m 375.5 340.4 - Joint Venture/ Associate 282 281 282 Total Sales £m 555.1 493.6 - Franchise & Management Contract 1,082 1,082 1,082 Total Solus 20,000 17,409 19,220 Sales - Premier Inn £m 311.0 264.1 Joint Sites 17,231 16,024 16,631 Sales - Restaurants £m 244.1 229.5 Total UK 37,231 33,433 35,851 Total Sales £m 555.1 493.6 International 463 0 155 37,694 33,433 36,006 Financial Analysis Number of Hotels IAFC - Solus sites £m 61.0 52.8 Solus IAFC - Joint sites £m 114.5 101.3 - Managed 191 177 187 Total IAFC £m 175.5 154.1 - Joint Venture/ Associate 1 1 1 - Franchise & Management Contract 28 28 28 EBITDA from Operations £m 173.6 155.2 Total Solus 220 206 216 Joint Sites 312 287 301 EBIT from Operations £m 139.2 123.4 Total UK 532 493 517 International 2 0 1 Net Assets - Solus sites £m 932.6 787.3 534 493 518 Net Assets - Joint sites £m 1,204.9 1,070.5 Total Net Assets 2,137.5 1,857.8 Restaurant Outlet Details - 145 134 144 Cash Capital Expenditure - Premier Inn £m 101.0 57.3 - Brewers Fayre 146 268 259 Cash Capital Expenditure - Restaurants £m 29.9 39.6 - Table Table 112 0 0 Cash Capital Expenditure - Total £m 130.9 96.9 - Taybarns 7 0 0 410 402 403 Key Operating Measures Numbers with adjacent Premier Inns ARR (Total) £ £55.47 £50.76 - Beefeater 110 93 108 - Brewers Fayre 105 194 193 Occupancy (Total) % 78.8% 81.4% - Table Table 90 0 0 - Taybarns 7 0 0 Yield (Total) £ £43.71 £41.34 312 287 301

Like for Like Sales Growth PI % 10.1% 10.9% Like for Like Sales Growth Rest % 4.5% 1.5%

Operating Margin % 25.1% 25.0%

ROCE (MAT) 1 % 11.7% 11.7%

1 ROCE is base upon segmental net assets and therefore excludes debt, provisions, and the pension deficit 2 3

HY 2008/09 HY 2007/08 HY HY FY 2008/09 2007/08 2007/08 Headline financials Outlet details - Equity 576 459 528 Sales £m 123.2 98.1 - UK Franchise 199 144 167 Total UK 775 603 695 EBITDA from Operations £m 15.7 12.7 - International JV2 30 9 21 - International Franchise 316 213 276 EBIT from Operations £m 7.3 6.6 Total International 346 222 297 1,121 825 992 Net Assets £m 89.9 70.6

Capital expenditure £m 16.6 16.1

Key operating measures

Like-for-like sales % 3.7% 6.8%

Operating margin % 5.9% 6.7%

ROCE1 - UK (MAT) % 27.4% 29.5%

ROCE1 - Total Business (MAT) % 23.9% 26.5%

1 ROCE is base upon segmental net assets and therefore excludes debt, provisions, and the pension deficit 2 International JV includes Shanghai which is a subsidiary with a 51% interest

3 4

Achieved Room Rate (ARR) Hotel accommodation income divided by the number of rooms occupied by guests Income after fixed costs Hotel operating profit after directly attributable fixed costs but before allocating head office and central costs Income before fixed costs Hotel operating profit before directly attributable fixed costs (such as rent, rates, insurance, etc.) and central costs Joint Sites Consist of sites with a combined Premier Inn and Whitbread restaurant. This includes the remaining standalone restaurants Like-for-like sales Period over period change in total sales, less sales generated by businesses acquired or disposed of and retail outlets opened or closed during 2007/08 and 2008/09 Occupancy Number of hotel bedrooms occupied by guests expressed as a percentage of the number of bedrooms available in the period Profit per room Hotel operating profit (after allocating central costs) divided by the number of rooms available ROCE (Return on Capital) Profit before interest, tax and exceptional items (less tax, interest and exceptional items on joint ventures and associates) divided by period end net assets Solus Sites Consist of standalone Premier Inn hotels and integrated restaurants (e.g. County Hall) or Premier Inn hotels with a third-party restaurant Yield Also known as "revenue per available room" this hotel measure is achieved by multiplying the ARR by the occupancy rate

4