Whitbread - the leisure business October 2001

John Banham Chairman

Whitbread - the leisure business

David Richardson Finance Director

Whitbread Successful demerger of Pubs and Bars Significant progress in future Whitbread

Pubs and Bars Completed May 2001 Headline £1,625m Shareholder gain £487m Gain taken directly to reserves Share consolidation

Operating profit £m % Marriott/Swallow Travel Inn Pub restaurants High Street restaurants Sports, health & fitness future Whitbread divisions Pubs and Bars30.5 Beer and other drinks11.3 Central Services, etc.(7.0) Operating profit172.0(25.7) 6 months to 1 September 2001 vs 6 months to 2 September 2000

Segmental analysis future Whitbread £m £m 6 months to September months to September 2000 Sales EBITDA Profit Assets Sales EBITDA Profit Assets Hotels Marriott/Swallow , ,165 Travel Inn Restaurants Pub restaurants High St restaurants Sports, health & fitness Total – future Whitbread , ,919

Proforma future Whitbread £m £m % 6 months 6 months Growth to 1 September to 1 September 2001/2 2000/1 Sales Operating profitHotels Restaurants David Lloyd Leisure Central costs(7)(6)(20.6) future Whitbread operating profit Estimated interest(30)(28)(7.5) Estimated profit before tax

Analysis of Whitbread cash flow £m £m £m Continuing Past Total Whitbread Whitbread Cash flow from operations Dividends received0.20.2– Interest costs etc.(34.9)(33.0)(1.9) Taxation(36.7)(18.0)(18.7) Capital expenditure(162.0)(147.1)(14.9) Acquisitions & disposals Dividends(113.3)(31.3)(82.0) Net cash inflow/outflow295.6(79.3) months to 1 September 2001

Exceptional costs £m Disposal of Pubs and Bars – transaction costs14.4 – restructuring costs5.9 Loss on sale of business3.7 Loss on sale of fixed assets

Deferred tax £m Liability on FRS19 basis at 3 March Transferred with Pubs and Bars(38.7) Deferred taxes provided in half year11.0 Deferred taxes as at 1 September

Future capex £m May estimate 1st half 2nd half Full year 2002/3 Marriott Travel Inn Restaurants David Lloyd Leisure Other Continuing businesses estimates

Confirmation Standard information for half year – Hotels – Restaurants – Sports, health & fitness

Whitbread - the leisure business

David Thomas Chief Executive

Whitbread’s value agenda Strong first-half trading Potential of new business is clear Good progress on value levers Action now to enhance future value

Like-for-like sales growth Marriott+ 2.3% Travel Inn+ 3.0% Brewers Fayre+ 4.2% Beefeater+ 5.0% David Lloyd Leisure+ 20.0% By major brand

Like-for-like sales growth Marriott/Swallow+ 1.3% Travel Inn+ 3.0% Pub restaurants+ 4.5% High Street restaurants+ 2.7% Sports, health & fitness+ 18.2% By reporting segment

Hotels Business hotels Market outperformance by Revpar UK hotel market Marriott – 9.4 LondonProvinces % Marriott yield premium up from 17% to 20%

Hotels The London effect LondonProvincesTotal Occupancy77.4%74.6%75.4%- 1.7% Achieved room rate£118.50£69.87£ % Yield£91.74£52.15£ % Operating profit– 8.9%+ 36.6%+ 20.6% * Core Marriott *

Hotels Marriott Profit per room improvement £k August 2001 March %

Hotels Swallow proves its value 10 conversions (1,469 rooms) Occupancy + 1.3% Achieved room rate+ 8.4% Yield+ 10.4% First tranche

Travel Inn Like-for-like sales+ 3.0% Like-for-like occupancy86.0% Rooms growth14,186 to 15, % guarantee Internet bookings Brand performance Hotels

Restaurants Pub restaurants By segment+ 4.5% Brewers Fayre+ 4.2% Beefeater+ 5.0% Like-for-like sales * * Excluding Travel Inn

Restaurants Brewers Fayre Total sales+ 6.8% Like-for-like sales+ 4.2% Operating margin growth16.8% to 18.5% Operating profit+ 17.6%

Restaurants Beefeater Comparable BeefeaterSales+6.0% Operating profit +7.4% Total Beefeater Sales+5.0% Operating profit – 8.5% Out and Out27 sites Average sales growth of 15%

Restaurants High Street restaurants growth Sales + 8.0% UK like-for-like sales –Pizza Hut+ 6.9% –Costa+ 6.2% –Café Rouge+ 5.3% –TGI Friday’s + 2.8% –Bella Pasta– 0.9% Total UK+ 4.4% –Germany – 7.3% Total like-for-like sales+ 2.7% Operating profit %

Restaurants Improving asset quality Disposal of tail sites Finalise High Street brand review

High Street brand review Pelican brands to be sold (75 Café Rouge, 65 Bella Pasta, 8 Mamma Amalfi, 5 others – total 153) Flexible mechanism – manage outside Restaurants division Whitbread team to focus on major brands and value drivers Restaurants

Sports, health & fitness Sales+21% Like-for-like sales+18% Operating profit+24%

Sports, health & fitness UK health & fitness operators Like-for-like sales % 6 months to 30 June 6 months to 30 April 6 months to 30 June 3 months to 30 September 6 months to 30 June 6 months to 31 August

Sports, health & fitness David Lloyd brand Membership growth + 12% to 248,000 Non-fee income + 13% Membership retention 78% MAT Market outperformance

David Lloyd Leisure Developing clubs year-on-year profit growth +£4.5m (+250%) New clubs - reduced time to maturity Pre-opening members average 1,780 Improving club returns Sports, health & fitness

Like-for-like sales Marriott- 4.7% –London -24.6% –Provinces+3.9% Travel Inn+ 5.6% Brewers Fayre+ 7.9% Beefeater+ 5.2% David Lloyd Leisure * % September/October * September only

Trading outlook Continue driving returns from existing assets Reduce discretionary and overhead costs Flexibility to defer £150m capex – primarily on new site expansion Management action

future Whitbread Strength of major brands Strong indications of market outperformance Good progress on value levers Prompt response to new circumstances Prospects

future Whitbread