Annual Review and
Summary Report 2008/09
Whitbread Plc
a year in
the life of
Whitbread
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2
Welcome to Whitbread
In this Annual Review, we report on our performance during
the past twelve months. We also show you a ‘Whitbread day’,
and the many different ways we touch the lives of thousands
of customers every day.
contents
Financial Highlights
1
2
4
8
10
11
12
14
18
19
20
22
23
27
29
30
34
Total revenue from
Continuing operations1
(£m)
Profit before tax and
exceptional items for
Continuing operations1
(£m)
1,173.5
1,216.7
1,334.6
229.9
210.3
166.5
Chairman’s statement
Group at a glance
Chief Executive’s review
Whitbread Hotels
and Restaurants
Costa
Our markets
Finance Director’s review
Corporate responsibility
06/07
07/08
08/09
06/07
07/08
08/09
Key performance indicators
Risks and uncertainties
Diluted pre-exceptional
EPS for Continuing
operations1 (p)
Full year dividend (p)
Board of directors
Senior management
Summary
remuneration report
Summary directors’ report
Independent auditor’s report
Summary financial statements
Shareholder services
92.99
78.78
30.25
36.00
36.55
48.24
06/07
07/08
08/09
06/07
07/08
08/09
1 Continuing operations
Continuing operations comprises Whitbread
Hotels and Restaurants and Costa plus the
supply chain sales to third parties but excludes
any discontinued businesses (David Lloyd
Leisure disposed of during 2007/08).
The Annual Review aims to give shareholders a clear and concise overview of the Group’s business and
prospects, but does not contain sufficient information to allow for as full an understanding of the results
and affairs of the Group as would be provided by the full Whitbread Annual Report and Accounts 2008/09.
Throughout this document there may be references to the notes to the accounts. These notes
can be found in the Directors’ Report and Accounts but are not contained within this document.
The full Whitbread Report and Accounts 2008/09 (comprising this document together with the
Directors’ Report and Accounts) are published on our website (www.whitbread.co.uk) and can
also be obtained, free of charge, by telephoning Capita Registrars on 0844 855 2327.
www.whitbread.co.uk/annualreport0809
Chairman’s statement
This was the first full year Whitbread
operated as a focused hotel and
restaurant company. It follows a number
of years in which we have concentrated
our resources on growth in attractive,
value for money sectors, building strong,
distinctive brands with real competitive
advantage.
2008/09 was a year of good progress
and, against a backdrop of increasingly
difficult economic conditions, we
delivered industry-leading performance.
Revenues at our Hotels and Restaurants
business were up 9% and revenues
at Costa were up 22% – the fifth year
of double-digit growth. Premier Inn
added a record 4,553 new rooms to the
estate, exceeding our original target. We
opened 13 new restaurants and added
296 coffee shops.
During the year, management undertook
an organisational review to ensure
the business operates efficiently. The
hotels and restaurants businesses were
combined into one operating unit and we
announced a number of key outsourcing
activities. We are on track to achieve the
promised £25 million cost savings by
2010/11.
Our strong operational performance
and investment in the business in
2008/09 provide us with a good platform
for the tougher times we have now
entered. We are focused on managing
Whitbread prudently and tightly in light
of the challenges we now face and, while
we remain committed to growing the
business, we have decided to limit our
capital expenditure this year and we aim
to achieve cash neutrality.
We go into 2009/10 with a robust
balance sheet, market-leading brands
in value for money sectors and proven
operational expertise.
Dividend
In the light of current trading conditions
the Board recommends an unchanged
final dividend of 26.90p per share,
making a total dividend for the year of
36.55p per share, up 1.5%. The final
dividend will be paid on 10 July 2009 to
shareholders on the register at the close
of business on 8 May 2009. This year we
propose to introduce a scrip dividend
alternative, subject to shareholder
approval, to replace the existing dividend
reinvestment plan. Further information,
including details of how shareholders
can elect to participate should they wish
to do so, will be included with my letter to
shareholders relating to the forthcoming
Annual General Meeting.
Board
I am pleased to report that, as of the
beginning of 2009, Patrick Dempsey
was appointed to the Board. Patrick
joined Whitbread in 2004 and took
over the management of Whitbread’s
budget hotels business in 2005, since
when Premier Inn has grown by around
10,000 rooms and undertaken a major
rebranding.
Stephen Williams was appointed as
Senior Independent Director, replacing
Rod Kent who stepped down from the
Board on 31 March 2008. Stephen,
who is General Counsel and Chief
Legal Officer at Unilever and Senior
Independent Director at Arriva PLC,
joined the Board on 27 April 2008.
People
On behalf of the Board, I would like to
thank all our people for their continued
commitment, energy and drive to
succeed. Our people are the most
important part of our business, ensuring
that all of our customers receive the
standards of service they expect of
Whitbread. We work hard to develop our
people, providing training and a clear
path of progression to encourage them
to flourish.
Anthony Habgood
Chairman
27 April 2009
1
We are focused
on managing
Whitbread prudently
and tightly in light
of the challenges
we now face.
www.whitbread.co.uk/annualreport0809
2
Group at a glance
Strong hotel and restaurant brands
Whitbread is the UK’s largest hotel and restaurant group
operating market-leading businesses in the budget hotel
and restaurant sectors. Our brands are Premier Inn,
Beefeater, Table Table, Brewers Fayre, Taybarns and Costa.
Whitbread employs over 33,000 people and serves millions
of customers every month in its 1,800 outlets across the UK.
Premier Inn
With nearly 600 hotels, Premier Inn is the UK’s largest hotel
chain. Our guests tell us they love the value for money we offer,
our clean and comfortable rooms and the warm welcome they
receive from our team members. The Premier Inn brand is
only just a little over a year old, yet already it has become the
favourite budget hotel brand for business travellers.
Premier Inn is transforming the perception of the budget hotel.
Our rooms feature en-suite bathrooms, TV with Freeview and
internet access. One of the real benefits of staying at Premier
Inn is that, at every one of our hotels, you will find a restaurant
serving good food and drinks at reasonable prices.
Beefeater
Beefeater was established over 35 years ago. There are
now 130 Beefeater restaurants across the UK. We only use
the finest cuts of steak from traditionally reared cattle fed
predominantly on grass to ensure exceptional flavour and
tenderness. Our steaks are expertly prepared and matured
for a minimum of 28 days before being seared on the chargrill
for that special Beefeater taste. Today on our menu you’ll
also find succulent chicken, fish and lamb grills as well as
fabulous salads.
Brewers Fayre
A family restaurant, serving Britain’s favourite pub food. The
first new Brewers Fayre for three years was opened in Banbury
in June 2008. The Brewers Fayre estate totals 130 restaurants,
many of which have been refurbished during the year, with
further refurbishments to come. Our extra value menu gives
more range and choice to customers and we’ve increased
the number of dishes available in our every day Fayre Deal.
Premier Inn
rooms
40,559
Rooms opened
in 2008/09
4,553
New rooms planned
for 2009/10
2,000
www.whitbread.co.uk/annualreport0809
Premier Inn guest
satisfaction score*
81%
Number of business
account card holders
61,000
Number of Premier Inn
and Whitbread branded
restaurant joint sites
328
3
Pub Restaurant
Table Table
Table Table was launched in the UK in May 2008 and now
has 105 restaurants. We call it ‘your’ Table Table because
we’ve designed different spaces in each restaurant to suit
different customer occasions and moods. Table Table offers
quick snacks or leisurely meals, with friends or family. Table
Table offers just the kind of warm and friendly service our
guests want.
Taybarns
The latest Whitbread restaurant is Taybarns, the ultimate
eatery. Taybarns is an innovative dining experience and offers
a range of dishes, freshly prepared in front of guests, along a
huge 34-metre counter. You pay one great value price for all
the food you want to eat. Already very popular, there are now
seven Taybarns across the UK.
Costa
At Costa we make it better. Our in-store baristas are all
coached in the art of handmade coffee at a Costa Coffee
Academy, like the one at our very own roastery in Lambeth,
London.
Costa opened its first store in Moscow during March 2008,
its milestone 1,000th worldwide store. Costa has over 880
stores in the UK and over 400 internationally. It operates in
25 countries and is the second largest international coffee
shop brand.
Costa was the first UK coffee shop chain to commit to
sourcing beans from Rainforest Alliance Certified farms.
The Costa Foundation was set up in 2006 to give something
back to coffee-growing communities. By 2010 the Foundation
will have funded the building of 11 new schools in these
communities.
Total annual
restaurant covers
38.0 million
Average restaurant
food spend per guest
£7.46
Average branded
restaurants guest
satisfaction score*
85%
Number of UK stores
881
Number of
international stores
407
Costa guest
satisfaction score#
72%
* Number of guests rating value-for-money as good or very good.
# YouGov customer satisfaction score.
www.whitbread.co.uk/annualreport0809
4
Business review – Chief Executive
Chief Executive’s review
Whitbread achieved good sales and
profit growth in the year. We have
strengthened our market leading brands
by adding a record number of Premier
Inns and Costa stores, whilst significantly
improving our restaurant performance.
business together with the previously
announced £50 million payment into the
pension fund. The Group’s total facilities
currently stand at £1.16 billion in place
until December 2010 when it reduces to
£930m until December 2011.
Decisive action has been taken to
improve our operating efficiency with
margins maintained. Our relentless
customer focus and drive to offer both
value for money and quality, together
with our robust financial position, mean
that Whitbread is well placed for these
tougher times.
Over the past five years we have
transformed Whitbread into a focused
hotel and restaurant business. Through
continued investment, we have
developed and built a modern, well-
maintained estate, with leading brands
in value for money sectors. 2008/09
was a year of strong progress for the
Group, with out performance across our
markets, albeit against an increasingly
challenging economic backdrop.
Group revenue grew year on year by
9.7% to £1,334.6 million, driven by
the growth in the number of hotels,
restaurants and coffee shops and an
increase in like for like sales, of 4.9%.
At Premier Inn, sales rose 14.0%, with
like for like sales up 6.0%, sales at our
restaurants rose 3.2%, with like for
like sales up 4.6%, and Costa sales
increased by 22.0%, with like for like
sales up 2.0%.
Group like for like sales were strong in
the first half followed by a softening as
we entered the more difficult market in
the autumn. In the last quarter overall
Group like for like sales were negative,
predominantly as a result of lower
occupancy in Premier Inn.
Group profit before tax and exceptional
items on a continuing operations basis
increased by 9.3% to £229.9 million
(2007/08: £210.3 million), with earnings
per share (diluted) increasing by 18.0%
to 93.0p.
At the year end, net debt stood at £623.1
million compared to £425.8 million at this
time last year. This increase reflected
continued capital investment in the
At the start of the 2008/09 financial
year, we undertook an operational
review to create a more streamlined and
efficient organisation. We combined
the management of our hotels and
restaurants, transferred our food logistics
to Kuehne & Nagel and outsourced
some back office support functions.
This efficiency programme is on track to
deliver cost savings of £25 million by the
end of 2010/11. We have already achieved
£7 million of savings in 2008/09, a further
c£13million is to be delivered in 2009/10,
with the balance in 2010/11. The action
we have taken has enabled the Group to
maintain operating margins.
The Board recommends a final dividend
payment of 26.90p per share, making
a total dividend for the year of 36.55p
per share. The final dividend will be paid
on 10 July 2009 to shareholders on the
register at the close of business on
8 May 2009.
Investing in the growth and
quality of our estate
For the fifth year running we opened
more hotel rooms in the UK than any
other operator. We exceeded our stated
targets and, including our new hotel in
Dubai, delivered a total of 4,553 new
rooms in Premier Inn. More than one
new hotel was opened on average every
week (55 hotels) and the total portfolio
at the year end stood at 573 hotels
comprising a total of 40,559 rooms.
We invested in increasing our branded
restaurant portfolio, opening 13 new
restaurants. This included six new Table
Table restaurants. We also opened six
further outlets of our newest innovation
in freshly prepared food, Taybarns.
We continue to invest in the estate,
ensuring our hotels and restaurants
are maintained to a consistently high
standard. In the year we upgraded over
7,000 Premier Inn rooms and refurbished
a total of 48 restaurants, 42 of which
were Brewers Fayres.
Leading brands
and a modern,
well-maintained
estate underpin
our competitive
advantage.
www.whitbread.co.uk/annualreport0809
Costa continued to grow rapidly. A net
total of 186 stores were opened in the
UK, bringing its total UK stores to 881.
In its international markets, Costa grew
by a net 110 stores. These included 23
new joint venture stores and 87 new
international franchise stores, bringing
the total number of overseas stores to
407 in 24 countries.
Well positioned for tougher times
This is the first full year that Whitbread
has operated as a focused hotel and
restaurant business, with leading brands
in each of our markets. This position,
together with the scale and quality of our
estate, our ongoing judicious investment
in the business and commitment to
providing value for money, means that
Whitbread is well positioned for the
challenging year ahead.
Premier Inn is the clear leader in the
budget hotel sector. The cornerstones
of its competitive advantage are a
combination of product quality and value
for money, both of which drive higher
customer satisfaction and loyalty. Our
continued focus on driving each of these,
will underpin our continued success.
We are transforming the perception of
the budget hotel sector, providing quality
customer service at great value prices.
Since our hotel estate was re-branded to
Premier Inn we have created a distinct,
leading budget brand and increased
brand awareness through focused
marketing towards families, leisure
customers and business travellers. We
have increased revpar and value for
money scores have increased to 81%.
Guest recommend scores have also
increased to 87%.
Premier Inn is now the UK’s favourite
budget hotel brand for business
travellers and we plan to improve on
this leading position with a strong focus
on sales, winning business from 3 and
4 star operators and by offering further
new benefits such as our £20 food and
beverage package.
Value for money is at the heart of our joint
site model, where guests can experience
both great value hotel stays and meals at
affordable prices. This model continues
to drive superior returns. Each of our
restaurant brands has distinctive value
for money propositions, such as the two
main meals for £9 at Brewers Fayre. We
continue to drive sales through these
everyday attractive prices and introduce
new menus across Beefeater, Table
Table and Brewers Fayre. Meanwhile, at
Taybarns it costs from as little as £5.95
for a three course meal and we will
continue to learn from the initial roll-out
of seven sites in order to plan the next
phase at the appropriate time.
At Costa, our unique proposition is the
quality of our handmade coffee served
in a welcoming environment. Indeed, we
have demonstrated, with independent
market research, that 7 out of 10 coffee
lovers prefer Costa Coffee’s cappuccino.
We will continue to amplify this message
with an aggressive marketing campaign
during the year. At the same time we
will further improve the food offers at
our Costa outlets, for example adding
lunchtime meal offers, such as the
popular panini plus cappuccino for £4.95.
We remain committed to opportunities
and growth in the longer term, although
we will reduce the pace of our organic
expansion in 2009. We now plan for
capital expenditure in 2009/10 to be
c£170 million.
Our target for Premier Inn during 2009/10
is to deliver around 2,000 new rooms in
the UK and overseas. We have a strong
pipeline of secured sites and will continue
to develop a land bank. Internationally,
our first hotel opened in Dubai during
2008 and we will build on this position,
intending to open a further two hotels in
the Emirates plus one in India.
For the fifth year running we opened
more hotel rooms in the UK than
any other operator.
5
Our first hotel in Dubai – already delivering profit.
Our coffee is hand crafted by highly skilled
baristas. We aim to serve the best tasting
coffee every time.
Beefeater’s famous flaming grill.
www.whitbread.co.uk/annualreport0809
6
Business review – Chief Executive
We plan to open around 100 new Costa
outlets in the UK in 2009/10. We will
capitalise on our strong Costa brand
by focusing on new locations, as well
as areas where we can replace existing
operators, such as in supermarkets,
hospitals and leisure facilities. Costa will
also continue to strengthen its position
across international markets, adding
100 net new stores in the year ahead.
Current trading and Outlook
Premier Inn has been impacted by
the increasingly harsh economic
environment but continues to outperform
the market. Against tough comparatives,
its performance since the start of the
financial year has softened further
whilst remaining within the range of
market expectations. Both Costa and
Restaurants have traded positively in
line with the second half of the last
financial year.
We have invested in maintaining a high
quality estate. We have built leading
brands providing the quality and value
for money that today’s customers are
looking for. Early action has been taken
to increase efficiencies and reduce
costs, and we will continue to do so.
Our balance sheet remains robust and is
underpinned both by a strong freehold
asset base and our aim to run our current
operations at cash flow neutrality. This
will put us in a good position to take
advantage of any attractive opportunities
that may arise from the tougher operating
environment and lower asset prices.
We believe that Whitbread is well placed
to maintain and build upon our strong
competitive position in the year ahead.
Our strategy – leading through change
Our ambition holds firm – to expand
our leadership position in the UK and
to become number one or two in our
chosen overseas markets. However, we
need to stay flexible in these turbulent
times.
Until such time as we feel the economy
can support our renewed pace of
expansion, we will deliver a slower pace
of growth for Premier Inn and Costa in the
UK and agreed international territories.
We have three clear priorities in the year
ahead:
To outperform competitors, with initiatives
such as the widening of Premier Inn’s
distribution network and strategic revenue
management. We will look to win share
from the full service corporate market and
launch a new campaign for the leisure
market, whilst emphasising our superior
food and beverage offer. Our restaurants
will continue to deliver strong customer
value and Costa will build on the coffee
superiority messaging.
To take advantage of our financial strength
through disciplined growth. Last year I
announced ambitious growth plans and
I am pleased that we delivered on those
plans. We still have plans to grow, but
will do so more cautiously in the year
ahead. We will continue to develop a land
bank for future use and will remain alert
to the possibility of any shareholder value
enhancing acquisition opportunity that
may arise; and
To achieve the planned efficiencies, by
continuing the work carried out last year
to deliver the £25 million cost savings
promised last year.
International progress
This report concentrates largely on
operations in the UK. However, we
do recognise the importance of our
ability to expand into new territories
and I’m delighted at the progress of
our international operations. The first
overseas Costa was opened in Dubai
in 1999. We now have a sizeable
international estate of in excess of
400 Costa store in 24 different markets.
Costa is the second largest international
coffee shop brand in the world and the
more mature markets are delivering
profit for the Group.
In Premier Inn, we’ve only just begun. We
purchased a hotel in Dublin as part of the
Tulip Inn acquisition and, last year, opened
our first new international hotel in Dubai.
This hotel is already delivering profit to the
Group, which is an excellent achievement.
We look forward to the opening of three
further international Premier Inns, two in
Dubai and one in India, later this year.
At Costa, our unique proposition is the quality
of our handmade coffee served in comfortable
environments.
Just one minute to check in! Premier Inn’s
self check in kiosks allow guests to get to
their rooms more quickly.
www.whitbread.co.uk/annualreport0809
We are transforming the perception of
the budget hotel sector, providing quality
customer service at good value prices.
Corporate responsibility
2008/09 has been a significant year for
Whitbread in terms of our approach to
corporate responsibility. We consulted
our people and our customers and
received a clear mandate to review the
existing programme of activities and
develop it further into a new business-
wide strategy, which I am pleased to be
leading personally. We will continue our
long history of community engagement
through charitable programmes such
as the Costa Foundation and our new
strategic focus covers the key areas of:
• environment and property management;
• people, culture and values;
• responsible sourcing and supply chain;
• governance, international and brand
standards; and
• health and well-being.
I will be supported by a steering group
and we are already on the road to
embedding corporate responsibility
into the heart of our business. We are
clear about the opportunity that the new
strategy brings for the Company. We will
deliver long-term shareholder value and
meet the expectations of our customers
and people. Further details can be found
on page 14.
Our people
I was delighted when Patrick Dempsey
was appointed to the Board at the
beginning of 2009. Over the past few
years Patrick has led Premier Inn through
a period of significant growth and, more
recently, successfully integrated the
management of Premier Inn with that
of our branded restaurants.
We employ 33,000 people at Whitbread
and I’d like to thank them all for their hard
work and commitment over the last year.
It isn’t only companies that are affected
by these tougher economic times, but
many of our people as well. Sometimes,
tough decisions have to be made for
the good of the Company and I greatly
admire the way in which our people
are pulling together to deliver the cost
savings I mentioned earlier in this review.
At Whitbread we consider recruiting and
training the best hospitality people to be
a key priority. In these challenging times,
the opening of new outlets will create over
1,000 new jobs during 2009/10. Both new
and existing team members at Whitbread
are now able to participate in our
innovative apprenticeship programme, the
first and largest employer-led programme
of its kind in the hospitality industry. By
halving the time that it takes to achieve
qualifications and combining NVQ study
with Whitbread’s induction programme,
we anticipate that 20% of our workforce
will have a nationally recognised
qualification by 2010.
All employees across our UK hotel and
restaurants operations are eligible to take
part and, by the end of 2009, we expect
over 3,000 of our people to have achieved
NVQs or certificates in adult numeracy
and literacy.
In June 2008, I was very honoured to
be awarded a CBE. I see the award
as recognition of the performance of
Whitbread over the last few years, a
performance that wouldn’t have been
achieved without the people who
work here.
Alan Parker, CBE
Chief Executive
27 April 2009
7
Our Costa advertising campaign shows that
not all coffee is the same.
www.whitbread.co.uk/annualreport0809
8
Business review – Whitbread Hotels and Restaurants
Whitbread Hotels and Restaurants
Patrick Dempsey, Managing Director,
Whitbread Hotels and Restaurants
Whitbread Hotels
and Restaurants
continued to
outperform the
market.
Hotels and Restaurants
Premier Inn revenues
Restaurants revenues
Total revenues
Premier Inn like for like sales
Restaurants like for like sales*
Operating profit (pre exceptional)
Segmental operating profit (post exceptional)
*2.8% excluding closure periods
Hotels and Restaurants performed well
in an increasingly challenging consumer
environment. Total revenues increased
by 9.0% to £1,061.6 million with pre
exceptional operating profit up 9.2%
year on year to £254.9 million. Like
for like sales were up 5.4%. Cost
efficiencies continued to be a top priority.
Premier Inn continued to outperform
the hotel market as we expanded our
network of sites, building on our leading
position. Total sales at Premier Inn
increased by 14.0% to £601.5 million
(2007/08: £527.8 million). Revenue per
available room (revpar) performance
grew by 2.8% on a like for like basis.
Like for like sales were up 6.0%. In
addition to revpar growth, extensions
contributed 3.2% with the balance
from food and beverage.
Looking back at our like for like sales
trends there was a strong first half
performance followed by a softening as
we entered the more challenging periods
in the autumn. Like for like sales entered
predominantly negative territory from
December.
Premier Inn’s value proposition continues
to attract corporate customers, and it
is now the leading choice brand among
business travellers. Sales via the Premier
Inn Business Account grew by 24% to
www.whitbread.co.uk/annualreport0809
2008/09
£m
601.5
460.1
1,061.6
2007/08
£m
527.8
446.1
973.9
254.9
240.2
233.5
223.5
%
Change
14.0
3.2
9.0
6.0
4.6
9.2
7.5
£171 million. Business guests can save
around £40 per night compared to 3 and
4 star hotels.
Last year Premier Inn opened 4,553
rooms, 1,245 of which were delivered
through the acquisition of 21 prime
location hotels from Mitchells & Butlers
plc in exchange for 44 Whitbread
restaurants.
In the year, we added 13 new hotels on
joint sites where we own and operate both
a hotel and a restaurant. Our joint sites
generate higher returns and contribute
nearly two thirds of Whitbread Hotels and
Restaurants’ unit operating profit.
Premier Inn is working towards a
greener future. In December 2008 we
opened a flagship hotel, located in
Tamworth, to trial the best environmental
initiatives. These initiatives include new
technologies such as heating from
natural energy, recycled water, ‘smart’
low energy lighting and heat recovery
ventilation. We have also increased the
use of sustainable timber and locally
sourced materials. Further details can be
found on page 17.
Our branded restaurants have delivered
good progress in the year, as we
continue to attract customers looking
for fresh and well-prepared food at great
9
prices. Revenues have increased by
3.2% to £460.1 million (2007/08: £446.1
million). Our restaurants achieved a like
for like covers increase of 7.9% and
a like for like sales increase of 4.6%
assisted by new menus and improved
environments. Average like for like spend
per head on food is £7.46.
In an early response to food price
inflation, we took steps to re-engineer
menus with more emphasis on the value
proposition and a focus on lower cost
dishes. As a result, we have been able
to introduce every day great value offers
such as Brewers Fayre’s two main meals
deal for £9.
We now have a total of 372 restaurants
with 328 on joint sites. This comprises
130 Beefeaters, 130 Brewers Fayres,
105 Table Tables and 7 Taybarns. We
have reduced the remaining portfolio of
stand-alone restaurants in the year to 44.
At the beginning of the financial year
we committed to maintaining the
quality of our estate by undertaking a
refurbishment programme across 42
Brewers Fayres. We will continue this in
2009/10 with a refurbishment of a further
c80 restaurants at a cost of around
£10 million. Our approach to capital
investment in this area has been very
disciplined and will continue to be so.
Premier Inn consistently improving customer satisfaction scores
%
100
95
90
85
80
75
70
Pub Restaurant
March
July
November
March
July
November
March
2007/08
2008/09
Likely to stay again
Recommendation
Overall satisfaction
Value for money
Source: ORC Guest Recommendation Survey
www.whitbread.co.uk/annualreport0809
Sam, King’s Cross Premier Inn, London.
Vikki Hanspal, Reception Manager,
Premier Inn, Sheffield St Marys Gate.
10
Business review – Costa/Our markets
2008/09
£m
263.8
2007/08
£m
216.3
22.7
23.8
20.8
19.2
%
Change
22.0
2.0
9.1
24.0
were also opened on major high streets,
in flagship shopping centres and in
provincial towns. In addition, in March
2009 we signed an agreement with
Hilton Hotel Corporation (HHC) to supply
coffee to 60 of its hotels in the UK.
As with all our estate, we continually
refresh and refurbish existing stores,
and open new units with a distinctive,
refreshed look. There are two key drivers
for this; to modernise the look and feel
of the brand and to create even more
comfortable, relaxing environments for
Costa customers – making their coffee
shop experience even better. Two thirds
of our UK stores have either undergone
this refurbishment or have been opened
in the new brand style.
Costa still has significant opportunity
to expand, although we will be doing
so at a more measured pace. We will
open around 100 stores in the UK,
focusing on towns, cities and ‘trade
zones’ where we are not present or
are under-represented.
Costa is now the second-largest
international coffee shop brand with
407 stores in 24 countries. 110 new
stores (net) were added in the year: 23
new joint venture outlets and 87 new
franchise stores. We anticipate that
around 100 stores will be opened in
international markets in 2009/10.
Costa
Costa
Revenues
Like for like sales
Operating profit (pre exceptional)
Segmental operating profit (post exceptional)
Costa delivered an encouraging
performance in a difficult market.
Total revenues were up by 22.0% at
£263.8 million and total profit up 9.1%
at £22.7 million (2007/08: £20.8 million),
as customers continued to respond
well to our focus on delivering excellent
coffee, served by trained baristas in
a warm and welcoming environment.
Costa saw strong sales growth across
all its business streams, with sales
in UK equity stores up by 21.0%, UK
wholesale and franchise sales up 14.9%
and international sales up 65.9%.
In the last year, transaction volumes
in the like for like estate increased by
0.8%, whilst food capture remained high
at 42.5%.
Our focus for Costa in 2008/09 was to
continue growing in all markets. In the
year 296 net new stores were opened,
bringing the total of UK and International
stores to 1,288.
Many of our new UK stores replaced
existing unbranded or lower quality
suppliers, or brought Costa to new
markets. For example, Costa now has
the largest coffee shop presence in
motorway service areas. The strength
of our brand is further demonstrated by
our ability to create partnerships with
other major retailers such as Tesco,
where Costa now has 72 stores. Stores
Costa profit (£m)
13.3
11.1
22.7
20.8
17.8
04/05 05/06 06/07
07/08 08/09
Consistent profit growth
John Derkach,
Managing Director, Costa
Customers
continued to
respond well to
our focus on
delivering excellent
coffee, served by
trained baristas.
www.whitbread.co.uk/annualreport0809
11
Our markets
Hotels
It is estimated that the total number of
hotel rooms in the UK is approximately
710,000. However, the industry remains
extremely fragmented with the majority
of rooms in independently owned and
run hotels.
For more than 25 years a long-term
structural shift has been taking place in
the UK hotel industry, with branded hotel
supply increasing its share of the market
from 161,000 rooms in 2000 to 262,000
rooms in 2009.
Branded budget hotels have been
growing at an even faster rate, although
still only accounting for one in seven of all
hotel rooms in the country. In the USA and
France, budget hotel rooms account for
around 25% and 23% respectively of all
hotel rooms.
Premier Inn has grown to become the
UK’s largest hotel chain with over 40,000
rooms in the UK. However despite the
size and reach of the portfolio, Premier
Inn accounts for less than 6% of all hotel
rooms in the UK.
Looking to the year ahead, there is
evidence that more business travellers
are switching their stays to the budget
brands in a search for greater value
(BDRC – Hotel guest survey 2009).
Furthermore, as the weakened pound
makes trips abroad more expensive
and the UK more appealing to overseas
visitors, this may stimulate leisure demand.
Restaurants
As the British economy experiences
challenging economic times, total visits
to UK restaurants have held up much
better than anticipated. The total out-of-
home eating market is set to reach an
estimated £40 billion in 2009. Within this
large and diverse market, fast, casual
dining and value concepts continue to
increase in importance.
Whilst many experts predicted a decline
in restaurant sales during the downturn,
there has instead been more resilience
from the value restaurant sector as many
consumers ‘trade down’ but eat out
nonetheless. Customers are influenced by
offers and discounts, but more importantly
eating out has become an integral part of
everyday modern lifestyles. According to
Allegra Strategies 8% of adult consumers
eat more than half their meals outside the
home each week and consumers under 25
are two and a half times more likely to eat
out than those over 45.
Coffee shops
We estimate that there are currently
3,800 branded coffee shops in the UK.
They delivered revenues of £1.53 billion
for the calendar year 2008.
The branded coffee shop sector is
highly competitive in the UK and has
experienced rapid growth during the
last five years. 2008 was no exception
and marked another good year as total
sector turnover grew by 15%.
Competition is intense as consumer
expectations around product, service
and value rise. Competition is also
increasing from other operators such
as pubs and fast food outlets looking
to cash in on the coffee shop image
and popularity.
Coffee shops have become, in a short
space of time, a mainstream destination
enjoyed by a wide cross section of
consumers. The latest consumer
research reveals that 50% of the adult
population visits a coffee shop at least
once a month and nearly a quarter visit
a coffee shop at least once per week
(Allegra Strategies). Coffee shops are
now as important as pubs in terms of
meeting venues and have universal
appeal in a multicultural society.
Today’s consumers expect so much
more than earlier generations when
eating out and their expectations
continue to grow with regard to healthy
eating, convenience and price.
Branded hotel room growth
This chart shows that the budget sector has outperformed all other branded
sectors in terms of supply growth
262,000
246,000
205,000
226,000
230,000
68,000
73,000
79,000
90,000
100,000
40,000
2005
2006
2007
2008
2009
Budget
Mid-market full service
Upper Full service
De Luxe
Source: BDRC desk research, January 2009, Bedroom figures rounded to nearest 1,000
According to Mintel 2009 there is
optimism for future growth deriving
from both high street locations and
alternatives such as motorway service
areas, health clubs and hospitals, for
example. The total branded sector is
estimated to increase to over 5,000
branded outlets with a combined
turnover of over £2 billion by 2013.
www.whitbread.co.uk/annualreport0809
Elise, Costa Coffee, Sutton.
Gennaro Pelliccia, Costa Coffee’s Master Roaster.
12
Business review – Finance Director
Finance Director’s review
Group structure
In February 2008 Whitbread announced that
the divisional management of the Hotels and
Restaurants businesses would be combined.
At the heart of this restructuring was a desire
to eliminate duplication, save costs and
better align the management teams to the
businesses, particularly, as many hotel and
restaurants operated as joint sites.
As a result Whitbread now only reports two
trading segments: Hotels and Restaurants
and Costa. The comparatives have been
changed to reflect this structure.
Revenue
Group revenue from continuing operations
in the year increased by 9.7% year on year
to £1,334.6 million.
Revenue by business segment
£m
2008/9 2007/8 % Change
Hotels &
Restaurants
1,061.6
973.9
9.0%
Costa
263.8
216.3
22.0%
Less:
inter-segment
(3.6)
(2.4)
Other
12.8
28.9
(55.7)%
1,334.6 1,216.7
9.7%
Revenue from
continuing
operations
Like for like sales grew by 4.9%, with
the remainder of the turnover growth
coming from a net increase in outlets,
predominantly in Premier Inn and Costa.
The directors believe that this measure
provides additional useful information for
shareholders on the underlying trends and
performance of the Group and we intend to
focus on underlying profit as a measure in
future periods.
Underlying profits for the year are £228.2
million compared to £203.8 million last year,
and underlying diluted earnings per share
92.2p compared to 76.4p last year.
Restatement
As reported at the half year, the abolition
of Industrial Building Allowances for hotel
buildings enacted in July 2008, IAS 12
(Income Taxes) has been re-interpreted and
as a result the deferred tax provisions for
hotel buildings have been re-appraised to
use a methodology better representing the
manner of recovery of the assets. This gives
rise to a restatement of the deferred tax
liability as at 28 February 2008, reducing
it by £79.3 million; increasing retained
earnings by £55.3 million and reducing
goodwill by £24.0 million. The effect of
this restatement on the 2007/08 income
statement has been to increase net profit
from continuing operations by £12.3 million.
Of this £12.3 million, £6.1 million relates to
pre-exceptional profit.
Exceptional items
Net exceptional loss amounted to
£70.0 million for the year. This amount
is analysed in more detail in note 7.
The significant items included within
this category are noted below.
Results
Pre-exceptional profit from continuing
operations for the year is £229.9 million,
up 9.3% on last year.
1. Organisational review
In line with the announcement last year
a number of reorganisation projects have
taken place during the year.
Total profit for the year is £90.3 million. This
compares to £557.1 million last year which
included the results of David Lloyd Leisure
and other businesses for the period of our
ownership up to 2 August 2008 of £20.7
million, and the profit on its disposal as
well as other businesses of £440.8 million.
Underlying profits
This year we have introduced an
underlying profit measure on the face of
the consolidated income statement. This
is a measure which excludes exceptional
items, the impact of the volatile finance
costs of IAS19, the finance cost of
ineffective elements of cash flow hedges
and the impact of straight line recognition
of future minimum rental uplifts.
The divisional management of the Hotels
and Restaurants businesses have been
combined.
The in house logistics operation was
outsourced to Kuehne + Nagel who set
up a new facility and we commenced
migration of the activity from May 2008.
From October 2008 the entire network
was migrated to Kuehne + Nagel who
in February 2009 commenced taking on
additional supply chain activities, which
were previously outsourced to other third
party distributors.
In February 2009 we completed the
outsourcing of our transactional accounting
team to Steria.
By the end of
2010/11 we will
reach the targeted
savings of £25
million announced
last year.
www.whitbread.co.uk/annualreport0809
13
Further work on the simplification of the
systems supporting our businesses will take
another 12 months to complete and by the
end of 2010/11 we will reach the targeted
savings of £25 million announced last year.
Of this £25 million, £7 million was secured in
2008/9 and c£13 million will be achieved in
2009/10 with the balance in 2010/11.
In the year £13.3 million has been charged in
relation to reorganisation costs, and a further
c£10 million will be charged in 2009/10.
Tax
The tax expense of £108.3 million
represents an effective tax rate of 30.2%
on the continuing businesses before
exceptional items, which compares
with 29.0% last year. The charge
includes deferred tax and the year on
year movement in the rate has been
predominantly driven by the deferred tax
associated with share based payments
which has been impacted by the fall in the
share price.
2. Premier Inn re-branding
As previously announced we have
rebranded our hotels business from
Premier Travel Inn to Premier Inn at a total
cost of £12.7 million (previously estimated
at £13.0 million), £7.0 million of which was
spent in the second half of last year.
3. Impairment
The Group has recognised a net impairment
charge of £16.7 million following an
assessment of the recoverable amount of
each of its property assets. The assessment
was calculated on the higher of the fair
value of the assets less disposal costs or
their value in use based on a review of the
discounted cash flows generated by the
business undertaken at each property.
4. Exchange transaction
On 19 September 2008 the Group acquired
21 hotels, which traded under the Express
by Holiday Inn brand from Mitchells & Butlers
plc in exchange for 44 Whitbread branded
restaurants. The disposal of the branded
restaurants at a fair value of £78 million
generated a profit on disposal of £6.4 million.
5. Tax
The deferred tax charge of £44.1 million
arises as a result of the enactment by
the UK Government in July 2008 of the
abolition of Industrial Buildings Allowances
for hotel buildings.
Interest
Pre-exceptional net interest costs of
£25.1 million were 28.1% more than last
year. The weighted average net debt in
the year was £531.0 million in compared
to £448.9 million last year.
Included in interest costs was a pension
credit of £5.5 million (2007/08 £7.0 million).
This represents the difference between the
expected return on scheme assets and the
interest cost of the scheme liabilities. In
2009/10 this is expected to be a pension
cost of £15.5 million.
Earnings per share
Diluted pre-exceptional earnings per share
for continuing operations increased by
18% to 93.0p.
EPS
Continuing Pre
Exceptional (Diluted)
2008/09 2007/08
93.0p
78.8p
Exceptional Items
(40.2)p (28.2)p
Discontinued Business (DLL)
– 242.4p
Total Operations (Diluted)
52.8p 293.0p
Details can be found in note 13.
Dividend
A final dividend of 26.90p, will, subject to
approval at the AGM, be paid on 10 July
2009 to all shareholders on the register
at the close of business on 8 May 2009.
The total dividend for the year at 36.55p
is up by 1.5%.
Capital expenditure and business
acquisitions
Total Group cash capital expenditure
on property, plant and equipment during
the year was £275.7 million with Hotels
and Restaurants spend amounting to
£241.5 million, Costa £30.1 million and
Corporate £4.1 million. Capital expenditure
is split between acquisition expenditure,
which includes the acquisition and
development of properties and maintenance
expenditure. In addition £30.4 million
was spent on business acquisitions and
£17.1 million on international investments.
Financing
Net debt at the full year was £623.1 million,
compared to £425.8 million last year. The
significant non-trading items resulting in
the increase were business acquisitions
of £30.4 million, the cost of the share buy
back programme of £20.0 million and a
£50.0 million payment into the pension
scheme, as agreed with Whitbread Pension
Trustees Limited in April 2003.
As at 26 February 2009 the Group had
committed revolving credit facilities of
£1,155 million. The facilities reduce to
£930 million in December 2010, £855 million
in December 2011 and £455 million in
December 2012 with the remaining facility
maturing in March 2013.
The policy of the Board is to manage its
financial position and capital structure in a
manner which is consistent with Whitbread
maintaining its investment grade status.
We aim to run our current operations on
a cash flow neutral basis in 2009/10.
Pensions
IAS19 Pension Deficit
As at 26 February 2009 there was an
IAS 19 pension deficit of £233.0 million,
which compares to £33.0 million as at
28 February 2008.
Triennial Valuation
The Group has reached agreement in
principle with Whitbread Pension Trustees
Limited on the triennial valuation, which
was based on the position as at 31 March
2008, and the associated recovery plan.
This valuation showed a deficit on a funding
basis of £388 million. The deficit on this
basis uses assumptions which are more
conservative than under the requirements
of IAS19 and therefore produce a greater
deficit. The recovery plan will provide for
deficit contributions until 2018. The deficit
contribution payments, which will start
from August 2011, will be £55 million each
year until 2013, then £65 million in 2014
and 2015, £70 million in 2016 and £80
million in 2017 and 2018. In addition the
Group has agreed to grant security over
£150 million of its property assets in favour
of Whitbread Pension Trustees Limited
and to update and renew the financial
covenant which has been in place since
2003. All these arrangements are subject
to appropriate consents, due diligence and
final documentation.
Christopher Rogers
Finance Director
27 April 2009
www.whitbread.co.uk/annualreport0809
Jackie, Eureka Park Beefeater, Ashford, Kent.
Simon Preston, Kitchen Manager, Eureka Park Beefeater, Ashford, Kent.
14
Business review – Corporate responsibility
Corporate responsibility
The role of business in reducing its
negative impacts and finding ways to
have far greater positive impacts has
never been more important.
Future strategy
Whilst we have long believed that
corporate responsibility is about
integrity, a core Whitbread value, and
that behaving responsibly also makes
sound business sense, we decided in
2008 that it was time to reinvigorate our
approach. To that end we worked with
PricewaterhouseCoopers to develop a
new corporate responsibility strategy. This
new strategy was approved by the Board
in March 2009 and we will be working
hard to implement it in the year ahead.
Vision and ambition
At Whitbread, we believe that heightened
attention and expectations of business
offer an opportunity to create a virtuous
circle between ‘doing the right thing’
and generating long-term value for our
shareholders. By harnessing the power
of our brands, the energy of our team
members and the engagement of our
guests, we can create meaningful change.
Our goals
We have set a number of goals in each of
the following areas:
• Environmental and property
management;
• People, culture and values;
• Responsible sourcing and supply chain;
• Governance, international and brand
standards; and
• Health and well-being.
These goals are split between those
that we intend to achieve within two
years and those that we intend to
achieve within five years.
Measurement and reporting
A Corporate Responsibility Steering
Group, chaired by Alan Parker, has
been established to be responsible for
the execution of this strategy. Progress
against the goals must be measurable
and new targets will be added to the
WINcard to ensure that corporate
responsibility is truly embedded in our
business.
Performance and activities in 2008/09
Whilst we have developed a new
strategy, there was still much activity
in the corporate responsibility field in
2008/09. In this report we report on
some of the highlights.
Environment
We believe that businesses have a
responsibility to actively manage and
minimise the impact they have on the
environment. Our approach is guided by
our energy, environment and sustainable
development policies, which govern the
way we do business.
The Group’s main environmental impacts
come from the use of energy and
water in our buildings and from waste
associated with the preparation of food
and drink in our outlets. Our efforts are
concentrated on:
• Measuring, monitoring and reducing our
energy and water consumption;
• Reducing the volume of waste going to
landfill; and
• Trialling new technologies and
implementing those that are beneficial.
Some of the main initiatives employed
during the last financial year were:
• Our ‘green hotel’ at Tamworth (further
details can be found on page 17);
• Greywater technology, which uses
recycled water to flush hotel toilets;
• Management of our climate change
impacts to measure and plan the
reduction of the Group’s greenhouse gas
emissions;
• Renewable energy to reduce our use of
fossil-fuel generated electricity;
• Low energy lighting installation; and
• Increased recycling to divert waste from
landfill.
We produce a detailed Environment
Report, which can be found on the
corporate responsibility section of our
website at www.whitbread.co.uk.
Louise Smalley, Group Human
Resources Director
By harnessing
the power of
our brands, the
energy of our team
members and the
engagement of
our guests, we can
create meaningful
change.
Guest
engagement
Social &
environmental
impact
Brand
leadership
Team
commitment
We have an opportunity to create a
virtuous circle between ‘doing the right
thing’ and generating long-term value
for our shareholders.
www.whitbread.co.uk/annualreport0809
Consumer issues
Our focus areas continue to include food
safety, healthier lifestyles, responsible
drinking, listening to customer needs
and developing mutually beneficial
relationships with suppliers. More details
and our policies will be available in the
Corporate Responsibility Report to be
published on our website later in the year.
Health and safety
We recognise the significance of
effectively managing health and safety
and ensuring the risks associated with
operating our business are adequately
controlled. We are committed to
providing a safe, secure and healthy
environment for both guests and
employees. This commitment can be
evidenced in the following areas:
• Health and safety is a key measure on
the WINcard;
• All outlets receive a detailed
independent health and safety and
food safety audit;
• The Board monitors health and safety
performance on a quarterly basis;
• Health and safety policies and
procedures and a risk management
system are in place to effectively
control and mitigate existing and
emerging risks;
• Health and safety workshops are
available for management level
employees and all outlets have access
to health and safety training courses;
and
• All outlets have suitable and sufficient
fire risk assessments undertaken and
regularly reviewed.
People
We are committed to delivering
programmes and providing opportunities
that help create attractive and rewarding
places to work and help Whitbread
become the Employer of Choice.
With more than 33,000 employees,
mainly in the UK, we have a range
of policies covering such issues as
diversity, employee well-being and equal
opportunities.
Focus on training
Great emphasis is placed on improving
the skills, expertise and performance
of employees through a continuous
programme of training and development.
Training programmes address skills
development across all levels.
Employee involvement
We are committed to listening to
and involving our employees and
believe that open and regular two-
way communication at all levels is
an essential part of the management
process. All employees are asked their
opinions via an annual ‘Your Say’ survey
and specific plans are put in place to
address feedback from these surveys.
Employee well-being
Because the well-being of our
employees is extremely important to
us, all employees and their immediate
families are provided with access to
the Whitbread Employee Assistance
Programme. This offers a round-the-
clock, confidential counselling service.
Flexible working
We are developing flexible employment
packages as an incentive to attract and
retain good people and acknowledge
that flexible working opportunities
benefit everyone – employers,
employees and their families.
Code of Conduct
The Group’s Code of Conduct is widely
briefed to employees on a regular basis
and sets out the high standards of integrity
expected from our people.
Community
Whitbread has been actively involved in
the community for many years. Today,
our community investment programme
focuses on:
• providing financial and in-kind support
to employees and the charities close
to their hearts;
• investing in countries and
communities that are an integral part
of Whitbread’s business; and
• building strong and mutually beneficial
charity partnerships.
We support our people in their
volunteering and fundraising activities
through the match-funding and payroll
giving schemes and, with 16% of
employees donating to their favourite
good causes, Whitbread has been
recognised with a Gold Award as part of
the Government’s Payroll Giving Quality
Mark scheme.
15
Supply chain
We recognise that our responsibilities
extend to our supply chain. Costa was
the first UK coffee shop chain to source
coffee from the Rainforest Alliance and
will, by the end of the current financial
year, have 60% of its coffee Rainforest
Alliance certified.
We recognise that it is our people who hold the
key to success and that it is essential we create
a great environment for them to work in.
www.whitbread.co.uk/annualreport0809
Annie, Gatwick Premier Inn.
Laura, Premier Inn, Dover (West).
16
Business review – Corporate responsibility
The Costa Foundation
The Costa Foundation was set up in 2006
to give something back to coffee-growing
communities by providing children with
access to education.
Costa recognises that coffee farmers are
an integral part of the brand’s success
and the Foundation’s focus on education
is in direct response to requests from
coffee growing communities.
The work of the Foundation is funded
through a direct annual donation from
Costa, match-funding by the Whitbread
Charitable Trust, store fundraising
activities and individual team members’
fundraising. Every penny donated to the
Costa Foundation is spent directly on
school building projects as all running
costs for the Foundation are funded by
Costa. This ensures Costa is able to
maximise funds to the benefit of coffee-
growing communities.
As a result, in addition to the four new
schools built in Colombia, Uganda and
Ethiopia in 2007, a further seven new
projects were started during 2008 in
Colombia, Uganda, Ethiopia, Guatemala
and Costa Rica and will all be completed
during 2009.
This means that by 2010 the Costa
Foundation will have:
• Built 11 new schools with a total of 56
fully furnished classrooms;
• Provided jobs for 123 teachers; and,
most importantly
• Given access to education to more
than 4,500 children a year
The Costa Foundation sets out to provide
the best possible learning environment
within its benefiting communities and
as a result has provided fresh water,
new sanitation, electricity, kindergarten
facilities, child nutrition programmes and
has part-funded a social worker for adult
training where required. All new schools
are fully furnished to local education
authority standards.
Current projects include:
La Esperanza Primary School in
Chonte Grande, Colombia where
seven new classrooms, four science
laboratories, a cafeteria, library and
playground will be provided for 228
children and 13 teachers. Estimated
completion – October 2009.
Paraiso de Changuena High School
in Puntarenas, Costa Rica will have
two new classrooms, new sanitation,
electricity and computers provided for
70 children and two teachers. Estimated
completion – July 2009.
Dimtu Hambela High School,
Hambela Warana, Ethiopia where
an eight-classroom school with new
sanitation will give high school education
for 970 children from 29 teachers for the
very first time. Estimated completion –
November 2009.
Santa Teresa High School, Tucuru,
Guatemala is providing six classrooms,
new sanitation and a community centre
for 240 children and eight teachers.
This will be Tucuru’s first ever access
to a high school education. Estimated
completion – August 2009.
Yupiltepeque Region, Guatemala
has seen three new schools built at
Las Brisas, Pueblo Viejo and El Sillon,
providing nearly 800 children and
their teachers with a total of seven
new classrooms, new sanitation and
community centre space. Estimated
completion – May 2009.
Mushasha Primary School,
Ntungamo, Uganda was a successful
Costa Foundation project carried out
in 2007/08 but, as a result of increased
numbers of pupils, the school is
being provided with an additional two
classrooms and a Headmaster’s office.
Estimated completion – May 2009.
Further information can be found on
www.costa.co.uk
Children from Las Brisas primary school,
Yupiltepeque, Guatemala
Mushasha primary school, Ntungamo, Uganda
www.whitbread.co.uk/annualreport0809
17
Premier Inn, Tamworth
This site is a test-bed for us to trial the best
green technologies currently available to see
which are viable for future hotel projects.
Our new Premier Inn in Tamworth
opened in December 2008 and brings
together the very best environmental
initiatives to reduce wastage and
increase efficiency. The site aims to
reduce energy consumption by up
to 80%.
Building that breathes
Ventilation with heat recovery delivers
fresh warm air to rooms and still allows
guests to control the temperature in their
room. This means we use less energy to
deliver cleaner air to rooms, so guests can
relax in a more comfortable environment.
Locally sourced
The most sustainable, local and effective
materials have been specially selected
and are ecologically friendly, but still
deliver very high performance. Where
concrete has to be used, low carbon
cement has been sourced from a
local supplier.
Concrete reduction
The hotel was designed to reduce the
use of concrete or cement wherever
possible. Softwood sustainable timber
reduces the carbon within the building,
saving on 100 tonnes of concrete.
The combination of building materials
and low carbon technologies used at
Tamworth is not matched anywhere else
in the UK. It includes:
• Sustainable materials including timber
and recycled plasterboard;
• Solar power;
• Natural insulation reducing heat loss
by 60%;
• Low energy lighting and movement
detectors providing a 80% saving
against standard lighting methods;
• Use of the earth’s natural energy to
heat and cool the hotel; and
• Use of recycled water and rainwater to
flush toilets saving 20% of the hotel’s
water usage.
Natural sheeps
wool insulation
Rainwater harvesting
Solar panels
Heat recovery
Ground source
heat pump
Ground source
heat probe up
to 130m Deep
Locally sourced
sustainable timber
Energy efficient room
temperature control
LED low energy lighting
Grey water recycling
www.whitbread.co.uk/annualreport0809
18
Business review – Key performance indicators/Risks and uncertainties
Our WINcard
provides a
common set of
objectives and
helps all our people
understand how
we are performing.
2008/09 WINcard results
Brand expansion
ROCE growth
Profit growth
Brand standards
Guest recommendation
Like for like sales growth
Team turnover
Health and safety
•
•
•
•
•
•
•
•
Key performance indicators
We use a balanced scorecard, called the
WINcard to measure our performance
against key indicators. The WINcard is
designed to ensure that we are meeting
our objectives to our stakeholder groups:
• investors;
• guests; and
• our people.
We believe that by taking care of our
people, they will take care of the guests
and ensure that they have a great
experience and want to return. This drives
up sales and profits for our investors.
The WINcard is fundamental to the way
in which we do business. It provides
a common set of measures in every
hotel, restaurant and coffee store and
right through the organisation up to
Board level. At each Management
Board meeting, the relevant WINcard is
reviewed and discussed. Appropriate
actions are agreed to reverse any
negative trends on the WINcard.
The WINcard is essential to the decision-
making process and provides a key
method of incentivising our people. The
performance against these financial and
non-financial measures determines levels
of bonus at all levels of the organisation.
In 2008/09 the WINcard was made up of:
Investor measures
Brand expansion
This tracks the rate at which we are
expanding our businesses.
ROCE growth
This measures the effectiveness of our
capital expenditure decisions to ensure
that we continue to spend our investors’
money wisely.
Profit Growth
This is the measure that ultimately shows
whether we are delivering the returns our
investors are entitled to expect.
Guest measures
Brand standards
All our businesses are audited regularly
against set criteria so that we keep
delivering a consistently high standard
of service.
Guest recommendation
We encourage our guests to provide
feedback on their experience and
measure their level of satisfaction.
Like for like sales growth
This measures changes in how much our
guests spend with us on a comparable
basis.
People measures
Team turnover
This measures how many people leave the
business and indicates how happy and
motivated our people are in their jobs.
Health and safety
This measures how well we look after
both our people and our guests.
How does the WINcard work?
The WINcard uses a traffic light system to
show, at a glance, how we are performing.
Generally, red means that performance is
worse than the previous year and below
budget. Amber means that performance
is better than the previous year, but still
below budget. Green shows that the
performance is better than the previous
year and has met or exceeded budget.
The results for 2008/09 are shown on
the left.
The year ahead
The WINcard is about continuous
improvement and setting realistic targets.
Some new measures will be introduced
for 2009/10 to reflect the current
economic conditions and our commitment
to corporate responsibility. The new
corporate responsibility measures will not
be bonusable in the first year.
www.whitbread.co.uk/annualreport0809
19
Risks and uncertainties
The table below provides a summary of the key risks and uncertainties facing the Group and the plans in place to
mitigate such risks. A more detailed explanation of the risks and uncertainties facing Whitbread, together with further
information on the mitigation plans in place can be found on pages 4 and 5 of the Directors’ Report and Accounts.
Risks
Shareholder value risk
Mitigation plans
Failure to meet profit expectations
– Annual budget, monthly management reports, forecasting process, quarterly
trading updates and investor relations programme
Financial risks
Breach of loan facility or failure to obtain
refinancing of existing funds
– Signed facility agreements
– Ongoing covenant reviews and stress testing
– Banking relationships
Financial reporting error
– Expertise in finance team and segregation of duties
– Audit Committee and external auditor review
Significant increase in pension
fund deficit
– Expertise on the Investment Committee and oversight by the Trustee Board
– Regular reviews by the Whitbread Board
Failure of a third-party to a
significant contract/privity risk
– Credit control checks
– Auditing and monitoring of third parties
Loss arising from lack of controls
in international expansion
– Involvement of legal and corporate finance teams
– Approval of appropriate project teams by senior management
Strategic risks
Loss of market share
– Monitoring performance and appropriate action plans
Failure to deliver growth targets
– Development resource and programmes in place to deliver growth targets
Significant continuation of the
economic downturn
Failure to recruit and retain
key employees
Operational risks
– Monthly review of significant indicators and appropriate action plans
– Benchmarking of remuneration packages
– Analysis of employee turnover
– Talent review process
Health and safety failure
– Rigorous training and audit processes and Board level monitoring
Unacceptable food quality
– Internal and external monitoring of food provenance and quality issues
Outsourcing of finance planning
and HR systems
– Project plan and management
– Monitoring visits to outsource companies
Failure of key IT systems for a
sustained period
– Systems business continuity plan in place
Major failure of supply chain
– Supply chain business continuity plan in place
www.whitbread.co.uk/annualreport0809
20
Board of directors
Board of directors
The Board of directors consists of the Chairman, three
executive directors and five independent non-executive
directors. Information on changes to the Board during
the year can be found in the summary directors’ report
on page 27.
1.
4.
7.
www.whitbread.co.uk/annualreport0809
2.
5.
8.
3.
6.
9.
21
1. Anthony Habgood
2. Alan Parker, CBE (June 2008)
3. Christopher Rogers
Position: Chairman (since August 2005)
Appointment to the board: May 2005
Age: 62
Committee membership:
Nomination Committee (Chairman)
Remuneration Committee
External appointments:
Reed Elsevier PLC and NV
(Chairman) – from 1 June 2009,
Bunzl plc (Chairman) – until 30 June 2009,
SVG Capital plc (Director) – until 6 May 2009
Previous experience: Director of
The Boston Consulting Group Inc
from 1977 to 1986. Director, and then
Chief Executive of Tootal Group PLC.
Chief Executive of Bunzl plc. Chairman
of Mölnlycke Healthcare (UK) Limited.
Also held non-executive directorships
at Geest PLC, Marks & Spencer Group
plc, National Westminster Bank Plc
and Powergen plc.
4. Charles Gurassa
Position: Independent
non-executive director
Appointment to the board: July 2000
Age: 53
Committee membership: Remuneration
Committee (Chairman), Nomination
Committee, Audit Committee
External appointments:
LOVEFilm International (Chairman),
Mobileserv UK Co. Limited (Chairman),
WP Roaming II S.A. (Chairman),
7 Days Limited (Chairman), National
Trust Enterprises Limited (Chairman),
Whizz-kidz Trading Limited (Chairman)
Previous experience: Chief Executive
of Thomson Travel Group and a director
of TUI AG. Previously Chairman of Virgin
Mobile Holdings (UK) plc and Worldwide
Excellerated Leasing Limited.
7. Philip Clarke
Position: Independent
non-executive director
Appointment to the board: January 2006
Age: 49
Committee membership: Remuneration
Committee
External appointments:
Tesco PLC (Director)
Previous experience: Has ten years’
board experience gained at Tesco where
he has responsibility for operations in ten
countries across Asia and Europe. He also
is leader of the Information Technology and
Business Process functions
Position: Chief Executive
(since June 2004)
Appointment to the board: May 2000
Age: 62
Committee membership:
Nomination Committee
External appointments:
British Hospitality Association (Director),
VisitBritain (Director), University of
Surrey (Visiting Professor), World Travel
& Tourism Council (Director), Jumeirah
Group LLC (Non-executive director)
Previous experience: Managing
Director of Crest Hotels Europe, based
in Frankfurt and Senior Vice-President
of Holiday Inn Europe, Middle East and
Africa, based in Brussels. He joined
Whitbread in 1992 as Managing Director
of Whitbread Hotel Company.
5. Wendy Becker
Position: Independent
non-executive director
Appointment to the board:
January 2008
Age: 43
Committee membership: Audit
Committee, Remuneration Committee
External appointments:
Working Families (Trustee),
TalkTalk (Managing Director)
Previous experience: Partner of
McKinsey & Company for 14 years,
Brand Manager of Procter & Gamble,
Boston Consulting Group
8. Stephen Williams
Position: Senior Independent
non-executive director
Appointment to the board: April 2008
Age: 61
Committee membership:
Remuneration Committee, Nomination
Committee
External appointments:
Unilever PLC and NV (General Counsel
and Chief Legal Officer), Arriva PLC
(Senior Independent Director)
Previous experience: Trained as
a solicitor at Slaughter and May before
joining the legal department of Imperial
Chemical Industries PLC. He then joined
Unilever PLC in 1986, becoming General
Counsel in 1993.
Position: Finance Director
Appointment to the board: May 2005
Age: 49
External appointments:
HMV Group plc (Non-executive director)
Previous experience: Qualified as
an accountant with Price Waterhouse
before joining Kingfisher plc in 1988.
Subsequent roles included Group
Financial Controller at Kingfisher plc,
Finance Director, and then Commercial
Director, at Comet Group plc before
becoming Finance Director at
Woolworths Group plc.
6. Patrick Dempsey
Position: Managing Director, Whitbread
Hotels and Restaurants
Appointment to the board: January 2009
Age: 50
External appointments:
Hospitality Action
Previous experience: Joined Whitbread
in 2004 and has been in the hotel and
restaurant business for the past thirty
years. Previously he was with Forte Hotels
for twenty years, before joining Compass
Group as CEO of Restaurant Associates.
In 2005, he became Managing Director
of Premier Inn.
9. Simon Melliss
Position: Independent
non-executive director
Appointment to the board: April 2007
Age: 56
Committee membership:
Audit Committee (Chairman)
External appointments:
Hammerson plc (Group Finance Director)
Member of the Committee of Management
of Hermes Property Unit Trust
Previous experience: Having trained
as an accountant he has held a number
of financial roles at Reed International
PLC and Sketchley PLC, before joining
Hammerson in 1991 where he became
Group Finance Director in 1995.
Has previously held a non-executive
directorship at Associated British Ports
Holdings PLC.
www.whitbread.co.uk/annualreport0809
22
Senior management/Summary remuneration report
Senior management
This table shows the membership of the
Executive Committee, the Whitbread
Hotels and Restaurants (WHR)
Management Board and the Costa
Management Board. The biographical
details of Alan Parker, Christopher
Rogers and Patrick Dempsey are shown
on the previous page. The biographical
details of the other members of the
Executive Committee, Simon Barratt,
John Derkach and Louise Smalley are
shown below the table.
Board and
committee
members
Executive
Committee
WHR
Management
Board*
Costa
Management
Board*
Alan Parker
Simon Barratt
Patrick Dempsey
John Derkach
Christopher Rogers
Louise Smalley
Mark Anderson
Colin Elliot
Paul Flaum
Maria Horn
Andrew Pellington
Gerard Tempest
Ben Wishart
Clive Bentley
Russell Fairhurst
Helen Hardy
Adrian Johnson
Andrew Marshall
Matthew Price
Jim Slater
* The members of the Executive Committee are also members of both Management Boards,
although John Derkach is not a member of the WHR Management Board and Patrick Dempsey
is not a member of the Costa Management Board.
John Derkach
Louise Smalley
Simon Barratt
Position: Managing Director, Costa
Age: 52
At Whitbread: Joined Whitbread in 1995
as Marketing Director of Whitbread Beer
Company, before becoming Managing
Director of Beefeater in 1999. Appointed
CEO of Pizza Hut (UK) in 2002 and
Managing Director of Costa in 2006.
Previous Experience: Spent three years
at Procter & Gamble and ten years with
Pepsi Cola International in the roles of
UK Marketing Manager, UK Operations
Director, Northern Europe Marketing
Director and Area Vice President for
Spain and Portugal.
Position: Group Human
Resources Director
Age: 41
At Whitbread: Joined Whitbread in
1995 as HR Projects Manager of Pizza
Hut (UK). Served as HR Director of
David Lloyd Leisure and then Whitbread
Restaurants before becoming Group
Human Resources Director in 2007.
Previous Experience: Spent five
years working as a human resources
professional in the oil industry with
BP and Esso Petroleum.
Position: General Counsel
Age: 49
At Whitbread: Joined the Group in
1991 as Group Legal Adviser, before
becoming Company Secretary and Group
Legal Affairs Director in 1997. Has had
accountability for group development
and was a director of Whitbread Pension
Trustees Limited between 1997 and 2009.
Previous experience: Trained as a
solicitor at Slaughter and May and
then held positions in the legal teams
at Rio Tinto and Heron prior to joining
Whitbread.
www.whitbread.co.uk/annualreport0809
23
Summary remuneration report
The full remuneration report is set
out on pages 10 to 18 of the Directors’
Report and Accounts. This summary
report states Whitbread’s remuneration
policy and the aggregate directors’
remuneration for 2008/09.
Whitbread is a people business and its success is dependent on the skills and enthusiasm of the people who work in our
businesses. It is important that our employees are appropriately incentivised and rewarded to continue to deliver outstanding
service to our customers and value to our shareholders.
This year we have restructured the remuneration report with the intention of making it more user-friendly and I hope that you will
find this new structure helpful. Immediately below this introduction you will find a summary of key facts and information about
Whitbread’s remuneration policy and the TSR graph. This is then followed by a section of questions and answers. The usual tables
outlining directors’ remuneration, pension arrangements and share scheme participation are in the full remuneration report. In view
of the economic environment we have made some changes to our remuneration policy for 2009. The highlights are listed below:
• Senior executives, including the executive directors, will not receive a salary increase in 2009;
• The level of bonus executive directors can earn this year has been reduced. The on-target bonus has decreased from 87.5%
to 77% of salary and the maximum bonus has decreased from 175% to 167% of salary;
• The range at which bonus is payable compared to budgeted profit has been widened and the level of performance for maximum
payment has been significantly stretched above budget;
• The EPS targets for the 2009 LTIP awards have been set without reference to the Retail Price Index and at levels that require
considerable growth over our 2009/10 budget; and
• The Committee has established a shareholding guideline for senior executives. It believes that key executives within Whitbread
should have a significant level of shareholding to align them with the Group’s shareholders. Executive directors will be required
to build a shareholding of at least 100% of salary within five years and senior executives at least 50% of salary.
Membership of the Remuneration Committee
External advisers
Charles Gurassa (Chairman)
Anthony Habgood
Wendy Becker
Philip Clarke
Stephen Williams
Simon Barratt (Secretary)
Hewitt New Bridge Street
Towers Perrin
Internal advisers
Louise Smalley (Group HR Director)
Remuneration policy
To pay our people fairly in a manner that supports our corporate
goals, incentivises them to achieve those goals and is responsible
having regard to the interests of all the Group’s stakeholders
Terms of reference
Available at www.whitbread.co.uk
www.whitbread.co.uk/annualreport0809
24
Summary remuneration report
Summary remuneration report (continued)
Questions and answers
In this section, Charles Gurassa
answers questions on how
remuneration is managed at Whitbread.
TSR Graph – this is a graph showing the total shareholder return (with dividends
reinvested) in the holdings of the Company’s shares against a hypothetical holding of
shares in the FTSE 100 Index over a five-year period. The FTSE 100 Index has been
chosen because Whitbread has been a member of the index during this period.
Does Whitbread’s Remuneration
Committee fully meet the
requirements of the Combined
Code on Corporate Governance?
Yes, the membership of the Committee
is compliant with the Combined Code.
The Combined Code (which is available
at www.frc.org.uk) sets out the duties
and powers which companies are
expected to delegate to their remuneration
committees. Whitbread’s Committee
has terms of reference (available at
www.whitbread.co.uk or by requesting a
copy in writing from the General Counsel’s
office) which set out its duties and powers
and these terms of reference comply with
the Combined Code.
The Committee met four times in
2008/09 and a summary of the issues
considered at those meetings is available
in the corporate governance report on
page 9 of the Directors’ Report and
Accounts. The attendance of individual
members of the Committee at meetings
is shown on page 7 of the Directors’
Report and Accounts.
Who provides advice to the
Committee?
The Committee has appointed
independent remuneration consultants
Hewitt New Bridge Street and Towers
Perrin to provide external advice. Internal
advice is received from the Group
Human Resources Director, Louise
Smalley. Simon Barratt, General Counsel,
acts as Secretary to the Committee.
The Whitbread Group receives advice on
the implementation of the Committee’s
decisions and recommendations from
Hewitt New Bridge Street, Towers Perrin
and Slaughter and May. Neither Hewitt
New Bridge Street or Towers Perrin
provide other services to the Whitbread
Group, although a different part of the
Hewitt group provides services to the
Company’s pension fund. Slaughter
and May provides legal services to the
Whitbread Group.
www.whitbread.co.uk/annualreport0809
Total shareholder return
Source: Datastream
300
250
200
150
100
50
0
4 Mar 04
3 Mar 05
2 Mar 06
1 Mar 07
28 Feb 08
26 Feb 09
This graph looks at the value, by 26 February 2009, of £100 invested in Whitbread PLC on 4 March 2004
compared with that of £100 invested in the FTSE 100 Index based on 30 trading day average values.
Whitbread PLC
FTSE 100 Index
What are the main principles of
Whitbread’s remuneration policy?
It is important that our senior executives
have the skills, expertise, enthusiasm and
drive to achieve the Group’s objectives
and to enhance shareholder value.
Our job is to ensure that the overall
remuneration package is sufficiently
competitive to attract, retain and motivate
executives with the necessary attributes.
The majority of Whitbread’s employees
will not receive a salary increase this year.
Are executives entitled to other
benefits?
All executives are entitled to life
assurance and private health cover. Non-
core benefits, for which cash alternatives
are available, are family health cover and
a fully expensed company car.
We are determined to ensure that the
interests of executives and shareholders
are aligned and we recognise the
importance of having a significant
proportion of an executive’s remuneration
being linked to performance as well as
the importance of the balance between
short and long-term rewards.
How are base salaries determined?
We review base salaries on an annual
basis and consider a number of factors,
including market data. When awarding
a base salary increase to an executive
director, we take into account the
personal performance of the director
measured against agreed objectives
as well as the trading circumstances
across the whole Group. The Committee
has decided to not award any salary
increases to senior executives in 2009/10.
What are the pension arrangements
for executive directors?
The final salary section of the Whitbread
Group Pension Fund was closed to
new entrants, including directors, on
31 December 2001. New recruits since
that date are offered the opportunity to
participate in the defined contribution
section of the scheme at a rate.
Our policy is to pay a company
contribution of 25% of salary for
executive directors, with these
contributions being increased by a
further 2.5% of salary after each of five
and ten years’ service. Executives are
given the option of receiving a monthly
amount in cash (less an amount equal
to the employer’s national insurance
payable on the amount) instead of the
company pension contribution.
25
Alan Parker opted out of the pension
scheme on 31 May 2005 and Christopher
Rogers opted out of the defined
contribution scheme on 31 March 2006.
Patrick Dempsey participates in the
defined contribution scheme. Full details
of the directors’ pension entitlements,
including cash supplements, can be
found on page 15 of the Directors’ Report
and Accounts.
What is the Leadership Group
Incentive Scheme (LGIS)?
The LGIS, which was implemented in
2004/05, is a bonus scheme which
applies to over 30 executives. The
scheme is intended to provide a clear
link between performance and reward
in order to motivate key executives. It
promotes alignment with shareholders by
providing an emphasis on equity rewards
and promotes retention by deferring a
significant part of the awards.
So, how does the LGIS work?
At the beginning of each financial
year profit targets are set for the
Group and its businesses. Depending
on the performance achieved during
the year, awards of cash and deferred
shares may be made at the end of the
year. The cash element of the bonus
is payable immediately. The deferred
shares will normally be transferred into
the executive’s name three years after
the award date as long as the executive
remains employed by the Group during
the three-year period.
The threshold, target and stretch bonus
potential has been reduced for the 2009/10
financial year and the level of stretch above
budget has been significantly increased.
The levels of cash and deferred shares
(expressed as percentages of base
salaries) that can be awarded at different
levels of performance will be as follows:
Below threshold
At threshold
On target
Nil
2% cash
4%
deferred
shares
20% cash
42% deferred
shares
Stretch or above
(maximum payable) 94% deferred
53% cash
shares
A straight line will operate between the
above levels of performance. Threshold
will be the minimum target at which
awards will be earned, targeted level
of performance will be consistent with
budgeted performance and stretch will
be significantly above budget.
As well as the profit targets explained
above the Group, together with each
business, has a financial target. The
failure to meet this target would result
in the reduction of cash and deferred
shares payable as outlined above being
reduced by 25%.
Targets for future financial years will be
determined by the Committee at, or near
to, the beginning of each financial year.
The Committee assesses the profit
results at the end of each financial
year, as well as the performance of
each executive director against pre-
determined targets before agreeing the
awards, which are then independently
verified by Hewitt New Bridge Street.
Whitbread uses the WINcard to
manage its businesses, but to what
extent are executives incentivised
based on WINcard measures?
Profit growth, a key WINcard measure,
is the basis for awards made under
the LGIS. Executives may also earn a
maximum cash bonus of 20% of base
salary for meeting other WINcard targets.
These targets apply to all management
throughout the Company. They are set
at the beginning of the financial year
and, for directors, they are reviewed and
approved by the Committee after the
year-end. Further details on the WINcard
can be found on page 18.
Is the Long-term Incentive Plan (LTIP)
another incentive scheme?
Yes, although it serves to drive future
performance and retention rather than
to reward past performance.
The LGIS rewards executives for their
performance at the end of a successful
year, with an immediate cash bonus and
an award of deferred shares. Once those
deferred shares have been awarded, they
will be transferred to the executive as long
as they remain a Whitbread employee.
The LTIP, by contrast, is all about the
future. It rewards executives if earnings
and relative total shareholder return over
a three-year period exceeds specified
hurdles. Executive directors will be
granted awards in 2009/10 as follows:
Alan Parker
Patrick Dempsey
Christopher Rogers
125%
100%
100%
However, the shares will normally only
be transferred into the executive’s
name in the event that the executive
remains a Whitbread employee and that
performance conditions are met over
a three-year performance period.
How are the LTIP performance
conditions selected and what are they?
The Committee selects conditions that it
believes will closely align the interests of
executives to those of shareholders.
For awards made in 2009, as was the
case for grants made in 2007 and 2008,
two performance conditions have been
selected. Each condition will apply to
half of the awards. The two conditions
are relative total shareholder return (TSR)
and earnings per share (EPS) growth as
shown on page 26.
The measurement of relative TSR will
compare Whitbread’s TSR with that of a
comparator group of companies over the
period from 27 February 2009 to 1 March
2012. Averaging will take place before
the start and end of the performance
period to reduce the impact of short-term
share price fluctuations. The Committee
has decided that the most appropriate
comparator group for 2009 awards is the
FTSE 51-150 excluding certain sectors:
asset managers, consumer finance,
equity investment instruments, investment
services, life insurance, non-life insurance,
mining, oil & gas and speciality finance.
The Committee has also reviewed the
EPS targets for 2009 awards in the
light of the economic conditions and
Whitbread’s forecast performance.
The EPS target is set out on page 26.
The results of the TSR performance
condition test are produced for the
Committee by Hewitt New Bridge
www.whitbread.co.uk/annualreport0809
26
Summary remuneration report/Summary directors’ report
The awards granted in 2009 will vest as follows:
TSR Condition
Position at which the Company is ranked
Upper quartile and above
Between median and upper quartile
Median
Below Median
EPS Condition
2011/12 EPS: required annual percentage growth
above Whitbread’s 2009/10 budgeted EPS
Proportion of award vesting to executive
Full vesting of half the award
Pro rata on a straight line between quarter
and full vesting of half the award
Quarter of half the award vests
This half of the award does not vest
Proportion of award vesting to executive
14.6% or above
Full vesting of half the award
Between 6.3% and 14.6%
Pro rata on a straight line between quarter
6.3%
Below 6.3%
Quarter of half the award vests
This half of the award does not vest
Signed and approved on behalf
of the Board
Charles Gurassa
Chairman, Remuneration Committee
27 April 2009
Street Consultants LLP, while the EPS
calculations are verified by the Company’s
auditor Ernst & Young LLP. The results are
considered by the Committee before the
vesting level is confirmed.
executives. Executive directors are
required to build and hold a shareholding
equal to 100% of their salary within five
years and other senior executives 50%
of salary.
Have any LTIP awards vested in 2009?
The awards made in 2006 were subject
to a relative TSR performance condition.
The performance condition was met in
full, resulting in a vesting level of 100%.
The comparator group comprised 19
travel and leisure companies (including
Whitbread) at the time of measurement
and Whitbread was ranked third, which
is in the upper quartile. The awards
vested on 1 March 2009, after the end
of the financial year and will be reflected
in the LTIP table in next year’s full
renumeration report.
Are executive directors required to
hold Whitbread shares?
This year we have introduced share
ownership guidelines for senior
Directors’ emoluments for 2008/09
The directors’ aggregate emoluments
for 2008/09 were £3,463,315 (2007/08:
£3,942,358). In addition, the aggregate
value of awards made to directors
under the Long Term Incentive Plan
was £1,739,575 (2007/08: £1,263,750).
The aggregate amount of gains made
by directors on the exercise of share
options during the year was £nil (2007/08:
£900,503) and the aggregate market
value of awards exercised by directors
under long term incentive schemes
during the year was £229,214 (2007/08:
£619,707). The aggregate amount of
contributions paid by the Company to
money purchase pension schemes in
respect of the directors was £16,666
(2007/08: £nil).
www.whitbread.co.uk/annualreport0809
27
Summary directors’ report
The full directors’ report and full corporate governance report
are set out in the Directors’ Report and Accounts, which can
be found on the Company’s website or obtained by writing to
the Company’s registrar on the address shown on page 34.
Principal activities and review
of business
The principal activity of the Group is
the operation of hotels, restaurants and
coffee shops. These operations are
largely carrried out in the UK, although
Premier Inn operates one hotel in
Ireland and another in Dubai via a joint
venture. Costa operates coffee shops
in 24 international markets through joint
ventures or on a franchise basis. Details
of the Group’s activities, developments
and performance for the year, the main
trends and factors likely to affect its
future development and performance and
information required by the Companies
Act 2006 relating to the business review
are set out in the Chairman’s statement,
the Chief Executive’s review, the Finance
Director’s review and the corporate
responsibility report on pages 1 to 17
and in the section entitled ‘risks and
uncertainties’ on pages 4 and 5 of the
Directors’ Report and Accounts. Details
of the Company’s WINcard, containing
the key performance indicators can be
found on page 18.
Results and dividends
Group profit before tax and
exceptional items from
Continuing operations
£229.9m
Group profit before tax
and after exceptional items
from continuing operations
Interim dividend paid
on 6 January 2009
£198.6m
9.65p
per share
Recommended final dividend 26.90p
Total dividend for the year
per share
36.55p
per share
Subject to approval at the Annual
General Meeting, the final dividend
will be payable on 10 July 2009 to
shareholders on the register at the close
of business on 8 May 2009.
Board of directors
The directors at the date of this report are
listed on pages 20 and 21 of the Annual
Review. All except for Patrick Dempsey
and Stephen Williams served throughout
the year. Patrick Dempsey joined the
Board on 1 January 2009. Stephen
Williams joined the Board on 27 April 2008
and became Senior Independent Director
on 1 October 2008. Rod Kent resigned
from the Board on 31 March 2008.
Patrick Dempsey will stand for election
and Alan Parker will stand for re-election at
the forthcoming AGM in accordance with
the Company’s Articles of Association.
Details of the directors’ service contracts
are given in the remuneration report on
page 11 of the Directors’ Report and
Accounts. None of the non-executive
directors has a service contract.
Corporate governance
The Company is committed to high
standards of corporate governance
and, with one exception, complied
throughout the year with the provisions
set out in Section 1 of the Combined
Code on Corporate Governance. The
exception related to a period during
which the Company did not have a
Senior Independent Director, while a
successor to Rod Kent was sought. The
full corporate governance report can be
found on pages 6 to 9 of the Directors’
Report and Accounts.
B non-cumulative preference shares of
1 penny each (representing 0.83% of
the total share capital) and 224 million
C non-cumulative preference shares of
1 penny each (representing 0.70% of the
total share capital).
Details of the issued share capital can
be found in note 31 to the accounts.
Holders of ordinary shares are entitled
to attend and speak at general meetings
of the Company, to appoint one or more
proxies and, if they are corporations,
corporate representatives to attend
general meetings and to exercise voting
rights. Holders of ordinary shares may
receive a dividend and on a liquidation
may share in the assets of the Company.
Holders of ordinary shares are entitled
to receive the Company’s annual report
and accounts. Subject to meeting certain
thresholds, holders of ordinary shares
may requisition a general meeting of the
Company or the proposal of resolutions
at annual general meetings.
Major interests
As at 24 April 2009, the Company had
been notified of the following interests
of 3% or more of the voting rights of
the Company pursuant of Rule 5 of the
Disclosure and Transparency Rules.
No. of
shares
% of
issued
share
capital
Legal and
General
11,985,398 6.75%
Schroders
10,531,421 5.35%
Share capital
Throughout the year, the authorised
share capital has been £319.89 million
divided into 410,170,050 ordinary shares
of 76122/153p each (representing 98.47%
of the total share capital), 265 million
Black Rock
8,727,235
5.00%
AXA
8,675,788
4.97%
Standard Life
Investments
7,894,946
4.53%
www.whitbread.co.uk/annualreport0809
existence for the foreseeable future.
Accordingly, they continue to adopt the
going concern basis in preparing the
annual report and accounts.
Annual General Meeting
The AGM will be held at 2.00pm on
16 June 2009 at the Queen Elizabeth II
Conference Centre, Broad Sanctuary,
Westminster, London SW1P 3EE. The
notice of meeting is enclosed with this
report for those shareholders receiving
hard copy documents, and available
at www.whitbread.co.uk for those
who elected to receive documents
electronically.
By order of the Board.
Simon Barratt
General Counsel and Company Secretary
27 April 2009
Registered Office:
Whitbread Court
Houghton Hall Business Park
Porz Avenue
Dunstable
Bedfordshire
LU5 5XE
Registered in England: No. 4120344
The Annual review and summary report 2008/09 and
the Directors’ Report and Accounts contain certain
statements about the future outlook for the Group.
Although the Company believes that the expectations
are based on reasonable assumptions, any
statements about future outlook may be influenced
by factors that could cause actual outcomes and
results to be materially different.
28
Summary directors’ report/Independent auditor’s report
Charitable and political donations
No direct charitable donations have been
made by the Company. The Whitbread
Charitable Trust made donations totalling
£249,762 during the year. Costa Limited,
a subsidiary of the Company, made a
direct donation of £150,000 to the Costa
Foundation. Further details about the
Costa Foundation can be found on
page 16.
The Company has not made any political
donations during the year and intends to
continue its policy of not doing so for the
foreseeable future.
Employment policies
Whitbread has a range of employment
policies covering such issues as
diversity, employee well-being and equal
opportunities.
The Company takes its responsibilities
to the disabled seriously and seeks
not to discriminate against current
or prospective employees because
of any disability. Employees who
become disabled during their career at
Whitbread will be retained in employment
wherever possible and given help with
rehabilitation and training.
Employee involvement
The importance of good relations and
communications with employees is
fundamental to the continued success
of our business. Each of the Group’s
operating businesses maintains employee
relations and consults employees as
appropriate to its own particular needs.
Regular internal communications are
made to all employees to ensure that they
are kept well informed of the performance
of the Group.
Purchase of own shares
The Company is authorised to purchase
its own shares in the market. Approval
to renew this authority for a further year
will be sought from shareholders at the
2009 AGM.
In total 1.6 million ordinary shares of
76122/153 p each (representing 0.85% of
the total called up share capital at the
beginning of the year) were acquired
during the year at a cost of £20.0 million.
Five million of the shares held in treasury
(representing 2.58% of the total called up
share capital at the beginning of the year)
www.whitbread.co.uk/annualreport0809
were cancelled during the year. 14.8 million
shares (representing 7.61% of the total
called up share capital at the beginning
of the year) are held as treasury shares.
The maximum number of ordinary shares
held in treasury during the year ended
26 February 2009 was 19,188,806 on
27 June 2008 (representing 9.89% of the
total called up share capital at that time).
At the 2008 AGM the Company was
authorised to purchase its C shares
pursuant to a proposed contract between
Deutsche Bank AG, London Branch and
the Company. In total, 2.7 million C shares
of 1 penny each, representing 0.02% of
the total called up share capital at the
beginning of the year, were acquired
during the year at a cost of £4.4 million,
as part of the strategy to return value to
shareholders. All of these shares have
now been cancelled.
Auditor
Ernst & Young LLP have expressed
their willingness to continue in office
as auditor of the Company and a
resolution proposing their reappointment
will be put to shareholders at the
AGM. After proper consideration, the
Audit Committee is satisfied that the
Company’s auditor, Ernst & Young LLP,
continue to be objective and independent
of the Company. In coming to this
conclusion, the Audit Committee gave
full consideration to the non-audit work
carried out by Ernst & Young LLP.
The Audit Committee has considered
what work should not be carried out by
the external auditor and have concluded
that certain services, including internal
audit, acquisition due diligence and IT
consulting services, will not be carried
out by Ernst & Young LLP.
Disclosure of information to auditor
The directors have taken all reasonable
steps to make themselves aware
of relevant audit information and to
establish that the auditor is aware of that
information. The directors are not aware
of any relevant audit information which
has not been disclosed to the auditor.
Going concern
After making enquiries, the directors
have a reasonable expectation that the
Company and the Group have adequate
resources to continue in operational
Independent auditor’s statement
to the members of Whitbread PLC
29
Basis of opinion
We conducted our examination in
accordance with Bulletin 1999/6 ‘The
auditors’ statement on the summary
financial statement’ issued by the
Auditing Practices Board for use in the
United Kingdom.
Opinion
In our opinion the summary financial
statement is consistent with the
full annual financial statements, the
Directors’ Report and Directors’
Remuneration Report, of Whitbread
PLC for the year ended 26 February
2009 and complies with the applicable
requirements of section 251 of the
Companies Act 1985, and regulations
made thereunder.
Ernst & Young LLP
Registered auditor
London
27 April 2009
We have examined the Group’s summary
financial statement for the year ended
26 February 2009 which comprise the
summary consolidated income statement,
the summary consolidated statement
of recognised income and expense, the
summary consolidated balance sheet
and the summary consolidated cash
flow statement.
This report is made solely to the
company’s members, as a body, in
accordance with Section 251 of the
Companies Act 1985. To the fullest
extent permitted by law, we do not
accept or assume responsibility to
anyone other than the company and
the company’s members as a body, for
our audit work, for this report, or for the
opinions we have formed.
Respective responsibilities of
directors and auditors
The directors are responsible for
preparing the Summary Report in
accordance with applicable law.
Our responsibility is to report to you
our opinion on the consistency of the
summary financial statement within the
Summary Report with the full annual
financial statements, the Directors’ Report
and Directors’ Remuneration Report,
and its compliance with the relevant
requirements of section 251 of the
Companies Act 1985 and the regulations
made thereunder.
We also read the other information
contained in the Summary Report and
consider the implications for our report
if we become aware of any apparent
misstatements or material inconsistencies
with the summary financial statement.
www.whitbread.co.uk/annualreport0809
30
Summary accounts
Summary consolidated income statement
Year ended 26 February 2009
Year to
26 February
2009
Continuing operations
Revenue
Cost of sales
Gross profit
Distribution costs
Administrative expenses
Operating profit
Share of loss from joint ventures
Share of profit from associate
Operating profit of the Group, joint ventures and associate
Finance costs
Finance revenue
Profit before tax
Analysed as:
Underlying profit before tax
IAS 17 ‘Leases’ – impact of future minimum rental uplifts
Finance cost of cash flow hedges
IAS 19 Income Statement credit for pension finance cost
Profit before tax and exceptional items
Exceptional distribution costs
Exceptional administrative expenses
Exceptional finance costs
Profit before tax
Underlying tax expense
Exceptional tax and tax on continuing non GAAP adjustments
Tax expense
Net profit from continuing operations
Discontinued operations
Net profit on disposal of businesses
Profit for the year from discontinued operations
Profit for the year
Attributable to:
Parent shareholders
Equity minority interest
Earnings per share
Earnings per share
Basic for profit for the year
Diluted for profit for the year
Earnings per share before exceptional items
Basic for profit for the year
Diluted for profit for the year
Underlying earnings per share
Basic for profit for the year
Diluted for profit for the year
*Restated for deferred tax, see note 3 of the Directors’ Report and Accounts
www.whitbread.co.uk/annualreport0809
£m
1,334.6
(193.0)
1,141.6
(782.3)
(132.1)
227.2
(2.1)
1.1
226.2
(35.4)
7.8
198.6
228.2
(3.4)
(0.4)
5.5
229.9
(15.5)
(13.3)
(2.5)
198.6
(69.2)
(39.1)
(108.3)
90.3
–
–
–
90.3
91.8
(1.5)
90.3
Year to
28 February
2008
(Restated*)
£m
1,216.7
(185.5)
1,031.2
(740.7)
(115.5)
175.0
(0.5)
0.6
175.1
(51.6)
11.1
134.6
203.8
(0.4)
(0.1)
7.0
210.3
(46.8)
(8.0)
(20.9)
134.6
(59.1)
20.1
(39.0)
95.6
440.8
20.7
461.5
557.1
557.9
(0.8)
557.1
Year to 26 February 2009
Year to 28 February 2008 (Restated*)
Continuing
operations
p
Total
operations
p
Continuing
operations
p
Total
operations
p
52.82
52.76
52.82
52.76
93.10
92.99
93.10
92.99
92.35
92.24
92.35
92.24
50.92
50.63
294.72
293.01
79.23
78.78
89.59
89.08
76.86
76.42
87.22
86.71
31
Summary consolidated statement
of recognised income and expense
Year ended 26 February 2009
Year to
26 February
2009
£m
Year to
28 February
2008
(Restated*)
£m
Cash flow hedges:
Loss taken to equity
Exchange differences on translation of foreign operations
Actuarial (losses)/gains on defined benefit pension schemes
Tax on items taken directly to or from equity
Net (loss)/gain recognised directly in equity
Profit for the year
Total recognised income and expense for the year
Attributable to:
Parent shareholders
Equity minority interest
*Restated for deferred tax, see note 3 of the Directors’ Report and Accounts
(29.6)
5.3
(255.5)
79.8
(200.0)
90.3
(109.7)
(108.2)
(1.5)
(109.7)
(4.5)
(0.8)
95.5
(29.3)
60.9
557.1
618.0
618.8
(0.8)
618.0
www.whitbread.co.uk/annualreport0809
32
Summary accounts
Summary consolidated balance sheet
At 26 February 2009
Assets
Non-current assets
Intangible assets
Property, plant and equipment
Investment in joint ventures
Investment in associate
Other financial assets
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Total assets
Liabilities
Current liabilities
Financial liabilities
Provisions
Derivative financial instruments
Income tax liabilities
Trade and other payables
Non-current liabilities
Financial liabilities
Provisions
Derivative financial instruments
Deferred income tax liabilities
Pension liability
Trade and other payables
Total liabilities
Net assets
Equity
Share capital
Share premium
Capital redemption reserve
Retained earnings
Currency translation reserve
Other reserves
Equity attributable to equity holders of the parent
Equity minority interest
Total equity
26 February
2009
£m
28 February
2008
(Restated*)
£m
118.9
2,301.1
22.8
1.3
0.9
2,445.0
16.5
67.0
44.5
128.0
101.2
2,127.4
3.5
0.8
0.9
2,233.8
13.2
62.9
107.1
183.2
2,573.0
2,417.0
1.9
19.3
11.8
16.4
243.6
293.0
665.7
21.6
27.6
195.7
233.0
7.9
1,151.5
1,444.5
1,128.5
145.3
46.1
12.3
3,038.8
5.3
(2,120.0)
1,127.8
0.7
1,128.5
377.0
30.9
1.8
6.8
241.3
657.8
155.9
27.4
7.6
213.7
33.0
4.4
442.0
1,099.8
1,317.2
148.8
43.8
8.5
3,261.2
–
(2,145.1)
1,317.2
–
1,317.2
*Restated for deferred tax and resulting impact on goodwill, see note 3 of the Directors’ Report and Accounts
Alan Parker
Chief Executive
Christopher Rogers
Finance Director
27 April 2009
www.whitbread.co.uk/annualreport0809
Summary consolidated cash flow statement
Year ended 26 February 2009
Year to
26 February
2009
Profit for the year
Adjustments for:
Taxation charged on total operations
Net finance cost
Total loss from joint ventures
Total income from associate
(Gain)/loss on disposal of property, plant and equipment and property reversions
Net profit on disposal of businesses and investments
Depreciation and amortisation
Impairment of property
Pension credit
Reorganisation provision
Other non-cash items
Cash generated from operations before working capital changes
Increase in inventories
Increase in trade and other receivables
Increase/(decrease) in trade and other payables
Payments against provisions
Additional payment to pension fund
Cash generated from operations
Interest paid
Taxes paid
Net cash flows from operating activities
Cash flows from investing activities
Disposal of subsidiaries – discontinued
Purchase of property, plant and equipment
Purchase of intangible assets
Costs from disposal of property, plant and equipment
Business combinations, net of cash acquired
Capital contributions to joint ventures
Dividends from associate
Interest received
Net cash flows from investing activities
Cash flows from financing activities
Proceeds from issue of share capital
Costs of purchasing own shares
Repayment of preference shares
Decrease in short-term borrowings
Proceeds from long-term borrowings
Issue costs of long-term borrowings
Repayment of long-term borrowings
Dividends paid
Net cash flows used in financing activities
Net increase/(decrease) in cash and cash equivalents
Opening cash and cash equivalents
Closing cash and cash equivalents
Reconciliation to cash and cash equivalents in the balance sheet
Cash and cash equivalents shown above
Add back overdrafts
Cash and cash equivalents shown within current assets on the balance sheet
*Restated for deferred tax, see note 3 of the Directors’ Report and Accounts
£m
90.3
108.3
27.6
2.1
(1.1)
(6.9)
–
96.3
16.7
–
2.8
12.1
348.2
(3.3)
(0.6)
10.6
(20.2)
(50.0)
284.7
(35.8)
(37.0)
211.9
–
(275.7)
(0.6)
(1.0)
(30.4)
(17.1)
0.6
2.3
(321.9)
2.6
(25.7)
–
(9.2)
231.1
(2.3)
–
(64.1)
132.4
22.4
20.3
42.7
42.7
1.8
44.5
33
Year to
28 February
2008
(Restated*)
£m
557.1
45.7
40.5
0.7
(0.6)
27.2
(440.8)
89.0
–
(10.0)
19.4
(6.7)
321.5
(0.9)
(18.6)
(20.1)
(6.1)
(50.0)
225.8
(34.5)
(25.8)
165.5
984.3
(283.4)
(1.3)
(0.3)
(52.2)
(1.6)
0.7
4.2
650.4
6.4
(354.6)
(3.3)
(42.7)
–
–
(376.8)
(60.7)
(831.7)
(15.8)
36.1
20.3
20.3
86.8
107.1
www.whitbread.co.uk/annualreport0809
34
Shareholder services
Shareholder services
For further information about the
Company and its businesses please
visit the Whitbread website at
www.whitbread.co.uk
‘A’ limited voting shares of 25p each:
103.75p
‘B’ limited shares of 25p each: 103.75p
Whitbread has had discussions with the
Inland Revenue concerning the capital
gains tax cost of Whitbread shares
following the reduction of capital on 10
May 2001. It is confirmed that the market
value of each Whitbread share on 10 May
2001 for these purposes was 606.5p and
the market value of each Fairbar share
was 230p.
For the purposes of calculating UK tax
on chargeable gains which may arise
on a disposal of shares in the Company,
subsequent alterations to the Company’s
capital should be taken into account. In
particular, the special dividend and share
consolidation in May 2005, the share
consolidation and B share issue effected
in June 2006 and the share consolidation
and C share issue in January 2007
should be considered in accordance with
the information provided in the related
shareholder circulars. Further information
on capital gains tax allocations in relation
to the B and C share issues can be found
in the investors/private shareholders
section of the Company’s website
www.whitbread.co.uk.
General Counsel and
Company Secretary
Simon Barratt
Registered Office
Whitbread PLC
Whitbread Court
Houghton Hall Business Park
Porz Avenue
Dunstable
Bedfordshire
LU5 5XE
Shareholder enquiries: 0844 855 2327
Share dealing service
Capita Share Dealing Services
Tel: 0871 664 0446
www.capitadeal.com
These details have been provided for information
only and any action you take is at your own risk.
If you are in any doubt about what action to take,
please consult your own financial adviser. Should
you not wish to use these services you could find a
broker in your local area, on the internet or enquire
about share dealing at any high street bank or
building society. The availability of this service should
not be taken as a recommendation to deal.
Financial diary – 2009/10
(dates subject to confirmation)
28 April
Results announcement
Unsolicited mail
We are aware that some shareholders
have had occasion to complain of
the use, by outside organisations, of
information obtained from Whitbread’s
share register. Whitbread, like other
companies, cannot by law refuse to
supply such information provided that
the organisation concerned pays the
appropriate statutory fee.
6 May
8 May
16 June
10 July
Ex dividend date for
final dividend
Record date for final
dividend
AGM at QEII
Conference Centre
Payment of final
dividend
If you are a resident in the UK and
wish to stop receiving unsolicited mail
then you should register with the Mailing
Preference Service, telephone: 020 7291
3310 or you may prefer to write to: The
Mailing Preference Service, Freepost 22,
London W1E 7EZ.
3 September Half year-end
13 October
Announcement of half
year results
21 October
Ex dividend date for
interim dividend
23 October
Record date for interim
dividend
5 January
2010
Payment of interim
dividend
4 March 2010 End of financial year
Registrars
Capita Registrars, Northern House,
Woodsome Park, Fenay Bridge,
Huddersfield, West Yorkshire HD8 0GA
The website address is
www.capitaregistrars.com
For enquiries regarding your shareholding
please telephone
0844 855 2327, or email
whitbread@capitaregistrars.com
You can also view up-to-date information
about your holdings by visiting
www.whitbread-shares.com
Please ensure that you advise Capita
promptly of any change of address.
Dividend payment by BACS
We can pay your dividends direct to your
bank or building society account using
the Bankers’ Automated Clearing Service
(BACS). This means that your dividend
will be in your account on the same day
we make the payment. Your tax voucher
will be posted to your home address.
If you would like to use this method of
payment please ring the registrars on
0844 855 2327.
Sharegift
If you have a small number of Whitbread
PLC shares, with a value that makes
it uneconomical to sell them, you may
donate the shares to charity through
the Sharegift scheme operated by the
Orr Mackintosh Foundation. Further
information on Sharegift can be obtained
from their website www.sharegift.org
or by calling 020 7930 3737.
Capital gains tax
Market values of shares in the Company
as at 31 March 1982 were as follows:
www.whitbread.co.uk/annualreport0809
35
For your information, we have reproduced below advice from the FSA and ICSA about boiler room scams:
Warning to shareholders – boiler room scams
Over the last year, many companies have become aware that their shareholders have received unsolicited phone
calls or correspondence concerning investment matters. These are typically from overseas based ‘brokers’ who
target UK shareholders, offering to sell them what often turn out to be worthless or high risk shares in US or UK
investments. These operations are commonly known as ‘boiler rooms’. These ‘brokers’ can be very persistent and
extremely persuasive, and a 2006 survey by the Financial Services Authority (FSA) has reported that the average
amount lost by investors is around £20,000.
It is not just the novice investor that has been duped in this way; many of the victims had been successfully
investing for several years. Shareholders are advised to be very wary of any unsolicited advice, offers to buy
shares at a discount or offers of free company reports. If you receive any unsolicited investment advice:
• Make sure you get the correct name of the person and organisation
• Check that they are properly authorised by the FSA before getting involved by visiting www.moneymadeclear.fsa.gov.uk
• Report the matter to the FSA either by calling 0845 606 1234 or visiting www.moneymadeclear.fsa.gov.uk
• If the calls persist, hang up.
If you deal with an unauthorised fi rm, you will not be eligible to receive payment under the Financial Services
Compensation Scheme. The FSA can be contacted by completing an online form at
www.fsa.gov.uk/pages/doing/regulated/law/alerts/overseas.shtml
Details of any share dealing facilities that the company endorses will be included in company mailings.
More detailed information on this or similar activity can be found on the FSA website
www.moneymadeclear.fsa.gov.uk
July 2008
www.whitbread.co.uk/annualreport0809
36
Awards
Premier Inn won Best Business
Hotel Brand – Business Travel World
Premier Inn beat off stiff competition
from Marriott International and Q
Hotels to be crowned ‘Best Business
Hotel brand’ for the second year
running.
Premier Inn won Best Customer
Satisfaction in Leisure and
Tourism – Institute of Customer
Service Customer Satisfaction
The winners were the top performers
in the UK Customer Satisfaction Index
(UKCSI) in a survey of more than
24,000 people.
Premier Inn won Best Business
Expense Management Process
– Business Travel World
Premier Inn’s Business Account was
named as ‘Best Business Expense
Management process’. This award
makes Premier Inn the first brand to
have its own expense management
solution recognised above global
payment solutions.
WINNER
Applications of Research
Premier Inn, in conjunction with
BDRC and TRI, has won the award for
Applications of Research at the Market
Research Society Awards, for ‘Project
Shooting Star: Shaping the Growth
Strategy for Premier Inn’.
Premier Inn was voted Most
Improved Brand at the annual
Hotel Marketing Awards
An unprecedented third time in
four years that Premier Inn has
won this award.
Whitbread won International
Award at Peach Network’s Hero
& Icon Awards.
RETAILERS’
RETAILER
of the year
AWARDS 09
coffee chain
tracking programme
Costa was recognised as
‘Most Revitalised Brand’
Costa won in the M&C Retailers’
Retail Annual Awards event.
Costa won “Best Coffee Chain By
Customers” from him!’s Coffee
Chain Tracking Programme.
Table Table’s popular children’s
menu won the Kid’s Menu category
at the MIDAS (Menu Innovation
and Development) Awards.
www.whitbread.co.uk/annualreport0809
Food Operator of the Year (branded)
– Whitbread Hotels and Restaurants
beat off stiff competition from
Marston Inns and Greene King.
WHR won two of the most important
awards in the industry – Food Operator
of the Year (branded) and Food
Concept of the Year for Taybarns.
2
Welcome to Whitbread
In this Annual Review, we report on our performance during
the past twelve months. We also show you a ‘Whitbread day’,
and the many different ways we touch the lives of thousands
of customers every day.
contents
Financial Highlights
1
2
4
8
10
11
12
14
18
19
20
22
23
27
29
30
34
Total revenue from
Continuing operations1
(£m)
Profit before tax and
exceptional items for
Continuing operations1
(£m)
1,173.5
1,216.7
1,334.6
229.9
210.3
166.5
Chairman’s statement
Group at a glance
Chief Executive’s review
Whitbread Hotels
and Restaurants
Costa
Our markets
Finance Director’s review
Corporate responsibility
06/07
07/08
08/09
06/07
07/08
08/09
Key performance indicators
Risks and uncertainties
Diluted pre-exceptional
EPS for Continuing
operations1 (p)
Full year dividend (p)
Board of directors
Senior management
Summary
remuneration report
Summary directors’ report
Independent auditor’s report
Summary financial statements
Shareholder services
92.99
78.78
30.25
36.00
36.55
48.24
06/07
07/08
08/09
06/07
07/08
08/09
1 Continuing operations
Continuing operations comprises Whitbread
Hotels and Restaurants and Costa plus the
supply chain sales to third parties but excludes
any discontinued businesses (David Lloyd
Leisure disposed of during 2007/08).
The Annual Review aims to give shareholders a clear and concise overview of the Group’s business and
prospects, but does not contain sufficient information to allow for as full an understanding of the results
and affairs of the Group as would be provided by the full Whitbread Annual Report and Accounts 2008/09.
Throughout this document there may be references to the notes to the accounts. These notes
can be found in the Directors’ Report and Accounts but are not contained within this document.
The full Whitbread Report and Accounts 2008/09 (comprising this document together with the
Directors’ Report and Accounts) are published on our website (www.whitbread.co.uk) and can
also be obtained, free of charge, by telephoning Capita Registrars on 0844 855 2327.
www.whitbread.co.uk/annualreport0809
Annual Review and
Summary Report 2008/09
Whitbread Plc
a year in
the life of
Whitbread
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