Whitbread plc

Hello, everyone. Thank you for joining us today for the Whitbread Full Year 26 Q3 Trading Update Call. My name is Sammy, and I'll be coordinating your call today. During the presentation, you can register a question by pressing star followed by one on your telephone keypad. If you change your mind, please press star followed by two on your telephone keypad to remove yourself from the question queue. I'd now like to hand over to your host, Dominic Poole, CEO of Whitbread, to begin. Please go ahead, Dominic.

Thank you, Sammy. Good morning everyone and thank you very much for joining the call for our Q3 full year 2036 trading update. I'm joined by Hemant Kel, our group CFO. Hope 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. I'll start with a few comments on our balance of performance in the quarter. We saw strong trading momentum in both the UK and Germany. And as I'll come on to shortly, I'm pleased to say this has strengthened into the current trading period. In the UK, the return to market growth that we saw in the summer has continued, and occupancy remains high at 83%. Redpile is up 3%, and we maintain a healthy premium, versus the rest of the mid-scale and economy market. We traded particularly well in London, where we increased both occupancy and rates, resulting in Redpile up 7%, versus the prior year. UK food and beverage sales were in line with our expectations as we continued to make excellent progress on our accelerating growth plan that will both improve the guest experience and drive higher returns to shareholders by transforming some of our lower returning brand restaurants into higher returning hotel extensions. Our German business also delivered a strong training performance in the period and we've remained confident in reaching profitability this year. Total accommodation sales up 12%, and rest power is up 7% in local currency. This performance reflects the increasing maturity of our estate and brand, supported by our commercial initiatives, and we continue to outperform the rest of the market on both accommodation sales and rest power growth. Now moving on to current trading and starting with new hits. Our performance has strengthened versus the third quarter, and in the six weeks from the 8th of January, 2026, total accommodation sales and rep par were both up 4%, and we outperformed the wider market. In Germany, trading during the first six weeks has also been strong, and total accommodation sales were 11% ahead of last year, and total estate rep par was up 5% to 56 euros. Our cohort of more standard hotels are also performing strongly, with rev par 66 euros up 8%. Now turning to costs, we have made great progress with our efficiency programme and certainly need to increase our expected savings in full year 20 states by a further £10 million to between £75 and £80 million. And looking forward to next year, Whilst there is no change to our underlying inflation assumptions, following clarification from the government on the mechanics of transitional relief on UK business rates across over 1,000 of our properties, we now expect the cost impact will be £35 million in full year 2027, which is lower than our preliminary estimate of £40-50 million. we continue to believe the proposed changes to business rates are punitive and will impact future investment and job creation, and we, along with the wider hospitality industry, are actively engaged in pressing the UK government for changes. Taking into account the £60 million of efficiency savings that we are on track to deliver next year, we therefore now expect net inflation in full year 27 at between 3% and 4%. And finally, a word on the outcome Starting with the UK, while forward visibility remains limited, our booked position for fall year 27 is building nicely and is ahead of last year, with positive long-leaved leisure bookings into peak periods. And in Germany, we are continuing to perform ahead of the market and remain on course to reach profitability this year. We are continuing to focus on what we can control and are making great progress on each of our strategic initiatives. Our accelerating growth plan is on track and we are building out our committed pipeline in the UK. We're growing our business in Germany and we're on track to become the country's number one hotel brand. Our commercial programs are continuing to drive life-like sales momentum. We're continuing to maintain a tight grip on costs with our ongoing efficiency program. And we are recycling capital by selling leasebacks into high-returning investments like the accelerating growth plan. As we said back in November, in response to the UK budget, we are exploring a variety of options to further drive profits, margins and returns. That work is ongoing and we expect to provide an update to the market regarding our five-year plan at the time of our full-year results in April. I'll now hand back to Sunny to host the Q&A. Could I please ask you to limit the questions to two per person so we can get through as many as possible? Thank you.

Thank you, Dominic. To ask a question, please press star followed by one on your telephone keypad now. If you change your mind, please press star followed by two. In preparing to ask your question, please ensure your device is unmuted locally. Our first question comes from Jamie Rollo from Morgan Stanley. Your line is open, Jamie. Please go ahead. Thanks. Good morning. The first question is just on UK Westpac, obviously encouraging to see that backing growth after six quarters of decline.