Whitbread plc

Good morning, everyone. Thank you very much for joining the call for our Q3 full year 2025 trading update. I'm joined by Hemant Patel, our group CFO. Hopefully you've had a chance to review our announcement this morning. I'm going to start with a brief overview for those who haven't seen it before opening up the call for Q&A when Hemant and I will be happy to answer your questions. Back in October, we announced our five-year plan. And by focusing on what we can control, we expect to deliver at least £300 million incremental profit and more than £2 billion for shareholder returns. I'm pleased to say that we're making great progress against these strategic priorities, including our accelerating growth plan and cost efficiencies. As I will come on to, we're also building great momentum in Germany. We're confident that we're on track to deliver a step change in our profits, margins and returns. Starting with our Q3 trading update, the third quarter saw the continued return to more normalised levels of demand in the UK, and as expected, trading improved throughout the quarter. Total UK accommodation sales were broadly in line with the prior year, which was still 51% ahead of full year 2020. Our brand strength and commercial initiatives meant that we increased our outperformance versus the market on both accommodation sales and restaurant growth. Our UK food and beverage sales were in line with our expectations, reflecting the impact of our accelerating growth plan. Germany traded strongly in what is always an important quarter. In local currency, total accommodation sales were up 23% and REVPAR was up 20%, reflecting the progressive maturity of our estate and our commercial initiatives. Our performance versus the market has also strengthened, with our more established cohort and our total estate outperforming the wider market on both accommodation sales and REVPAR. Now moving on to current trading, and let's start with the UK. Our performance has stepped up versus the third quarter and in the six weeks to the 9th of January 2025, total accommodation sales are up 2% and REVPAR was in line with last year. In Germany, current trading during the first six weeks has been strong with a good trading performance in the Christmas markets. In local currency, total accommodation sales were 37% ahead of last year and total estate REVPAR was up 28% to 53 euros. Rev path for our cohort of more established hotels was also up 31% to 61 euros. Now a word on costs. There is no change to our full year 2025 guidance. I'm looking forward to full year 2026 with 50 million pounds worth of cost efficiencies and steps taken to mitigate the impact of the UK budget. We expect net cost inflation to be between 2 and 3% on our UK cost base of 1.7 billion pounds. We have significant control over our cost base and have a strong record of delivering significant savings each and every year, and we expect to deliver £250 million worth of savings to full year 2030. Turning now to the outlook and starting with the UK. While Ford's visibility remains limited, our booked position for full year 2026 is building ahead of last year with positive long-lead leisure bookings into peak periods. In Germany, we're performing well, and with a clear plan to further increase our brand awareness, grow Red Car, and open more rooms, we are confident in our ability to become the country's number one hotel brand. In summary, we're pleased with our UK performance in what is a challenging environment, and we are building real momentum in Germany. We're making good progress against our strategic priorities, and we remain confident in our five-year plan. A vertically integrated model means that even with conservative market growth assumptions, we are on track to deliver at least £300 million incremental profit and more than £2 billion for shareholder returns. Before we move into Q&A, could I please ask you to keep to a maximum of two questions each so that we can get through as many as possible. With that summary, I'll now hand over to Siobhan to host the Q&A.

Thank you. To ask a question, please press style followed by one on your telephone keypad now. If you change your mind, please press style followed by two. When preparing to ask your question, please ensure your device is unmuted locally. Our first question is from Vicky Stern from Barclays. Vicky, your line is now open. Please go ahead. Yep.

Morning. Happy New Year. First one's just on RevPAR, obviously. So Q3 did see a sort of turn for the worse versus Q2 despite easier comps. Obviously it did accelerate through the quarter. Just keen to hear your reflections on where that shift came from. So it seemed to be more on the business travel side than leisure, but just keen for any colour you've got there on the drivers. And then obviously in December we saw quite a nice improvement, albeit starting to see a bit of normalisation now in January. But obviously you never have great visibility. You touched on a little bit there. Curious if there's anything you can call out there on what you're seeing, your sense of where things might land in coming months at least for the REVPAR. And then the second one on AGP disposals and selling these backs, just to check in, are you still confident in the cash proceeds? I think you targeted £175 to £225 million for this year. Yeah, how feeling about the disposals and then with that the headroom in terms of further cash returns?