Whitbread plc

Good morning, everyone. I'm Dominic Paul, Group Chief Executive. This is an important day for Whitbread, and we appreciate you joining us today in person, but also for those of you who've joined us online. I'd also like to welcome a number of my fellow EXCO colleagues and board members who are here today, and our Chair, Christine Hodgson. Alongside our full year results, we've made an important announcement today, setting out our new five-year plan. We've been looking hard at our business with a completely open mind and have considered all options to accelerate our strategy and deliver increased margins and returns. Our new five-year plan is bold, ambitious and deliverable, and we're excited to introduce it to you today. This is the agenda for today. I'm going to start with a brief summary of our performance in financial year 2026. and then provide an overview of the steps we're going to take before Helen takes you through the full year results in more detail. I will then set out the drivers for our business review, our conclusions, and the actions we will take as part of our new five-year plan that will maximise total shareholder returns over both the medium and the longer term. You will then hear from a number of my Exco colleagues who will take you through each element of our new plan, providing more detail on the key drivers for each one. We will then have a short 15-minute break before Hemant covers capital allocation, financials and guidance, before I wrap things up and then we can go into Q&A. I'll start with a few moments on last year's results. There's a lot to be proud of in these results, and we delivered a positive performance that was achieved despite significant external headwinds in the shape of substantial cost increases in the UK. We've been able to deliver this performance thanks to the power of our vertically integrated model, the strength of our brand and the impact of our commercial initiatives, highlighting the quality and the resilience of our business. After a challenging first quarter, UK market RepPAR returned to growth during the summer and we continue to outperform the wider market. Our acceleration growth plan is on track as we replace lower returning branded restaurants with a more efficient integrated offering and higher returning extension rooms. And as you'll hear shortly, we are proposing to build on this further. In response to higher than expected inflationary pressures, our teams have worked hard to deliver accelerated efficiencies during the year. In Germany, we reached a really important milestone, achieving profitability for the first time. reflecting the strong momentum and continued progress we are making. And last, but certainly not least, we returned over £400 million to shareholders through a combination of dividends and share buybacks. And today we are announcing our new five-year plan. This is an important moment in Whitbread's 280-year history. and mark some significant changes that we are making to the business. Changes that will make us even better and more profitable business, delivering stronger returns for our shareholders over the medium and longer term. It's a bold plan and we are highly confident in our ability to execute it. This plan delivers strong, profitable growth. And we will continue to take advantage of constrained supply to further strengthen our position in both of our core markets. By increasing our focus on the highest returning projects, like extending our acceleration growth plan in the UK, driving more efficiencies, and by focusing on our most successful formats in Germany, we will also grow our margins and our returns. We're going to be more aggressive in working our assets harder and reducing our capital intensity by over £1 billion. And by recycling more of our freehold property, we can increase our group return on capital by 500 basis points. A result that will generate £2 billion worth of free cash flow for shareholders by financial year 31. We've already made excellent progress in the transformation of WIPRED. despite some significant external headwinds outside of our control, and I'm really excited by what's coming next. Our new five-year plan is a step change for Whitbread and completes our journey to becoming a 100% pure play hotel business. We will go further and faster to deliver a great experience for our guests and high-quality growth, margins and returns for our shareholders. I'll come back later to go through the outcome of our business review and our future plans. But first, I'm going to hand over to Hemant, who will take you through the full year results in a bit more detail. Over to you, Hemant.

Thanks, Dominic.

Right. Good morning, everyone. I'm Hemant Patel. I'm Chief Financial Officer of WIPRED. I've been so for just over four years. I'll start with a summary of the group's financial performance before covering the UK and Germany in a bit more detail. A robust recovery in UK accommodation sales in the second half and positive momentum in Germany offset by expected lower food and beverage revenues as a result of the accelerating growth plan resulted in flat to group revenues year on year. Better than expected cost efficiencies and reductions in our cost base due to the AGP helped mitigate significant cost pressures, including above inflation increases in national living wage, national insurance and food and beverage. As a result, operating costs fell by 2%, supporting a 4% increase in EBITDA to £1.1 billion. Having returned £419 million to shareholders in a year, high interest costs meant the adjusted profit before tax was flat year-on-year at £483 million. Adjusting items increased to £185 million, the majority of which are non-cash and related to our accelerated growth plan, meaning statutory profit before tax was £298 million. Our vertically integrated model continues to generate significant operating cash flow. We were able to add to this with £313 million of property related disposals, helping to fund our investment in higher returning growth opportunities, such as our accelerating growth plan. We have a strong balance sheet with least adjusted leverage of 3.3 times, which remains within our investment grade threshold of 3.5 times. I'll now run through the drivers behind this performance, starting with the UK. Whilst accommodation sales increased by 1%, reflecting a strong recovery from the second quarter and continued outperformance versus the market, lower food and beverage as a result of the accelerating growth plan meant the total UK statutory revenue was down 1% year on year. We delivered significant efficiencies which helped drive a 2% increase in EBITDA, just over a billion pounds, and UK adjusted profit for tax was 499 million pounds. Our occupancy levels remained high, stepping up in the second quarter as we saw a return to market growth supported by strong demand over the summer months, reaching 79% for the year. Average room rate increased by 3% to £82, driven by the strength of our commercial initiatives and trading strategies. Both rev part and revenue were up 1%, with accommodation sales at £2 billion. Thanks to our brand strength, trading expertise and the benefit of several commercial initiatives, We outperformed the market on both the REVPAR and accommodation sales growth, and are continuing to command a healthy REVPAR premium of nearly £6. This positive performance has continued into the current trading period, and we continue to outperform the market with an increased REVPAR premium to the mid-scale economy market of nearly £7. Now onto Germany. Reaching profitability in Germany for the first time represents an important milestone for the group, with segment-adjusted profit before tax of £2 million. Our performance reflects the momentum and continued progress we are making in this large and exciting market. Revenues were up 13%, driven by the increasing maturity of our estate, further improvements to our trading strategies, broadening our distribution, and increasing food and beverage sales. Operating costs of the year increased to £177 million, reflecting our network expansion and cost inflation. However, with strong revenue growth, EBITDA increased by 28% to £85 million. Our cohort of more established hotels is continuing to mature and is a key driver of our overall performance. Local site profits increased to £20 million in the year, up from £16 million a year ago. As Eric will come on to later, we are now clear on what works really well and what doesn't in Germany, and expect our most established cohort to reach double-digit returns this year, and by fall year 31, the entire network will be delivering double-digit returns. we continue to outperform the rest of the German MISC and the economy market. As you can see, both our more established cohort and our network as a whole are outperforming the market in terms of Redpar growth. Our cohort of more established hotels grew Redpar by 6% in local currency, ahead of our total estate, reinforcing the point that it is not yet mature and giving us real confidence that it can and will grow further. Finally, turning now to group cash flow. Our vertically integrated model and strong market position meant that we delivered adjusted operating cash flow of over £700 million, helping to fund both our ongoing programme of investment in future growth and shareholder returns. During the year, we continued to invest in high returning growth opportunities, with the result that gross capex spend was higher than last year at £697 million. To fund this and other high returning growth opportunities, we recycled £313 million of proceeds from property-related disposals resulting in net capex of £384 million below our previous guidance. As a result, total cash flow before shareholder returns was just over £200 million, and having returned £419 million to shareholders via dividends and share buybacks, we maintain a strong balance sheet with net debt of £709 million and lease-adjusted leverage of 3.3 times. I want to hand back to Dominic, who will provide an overview of the outcome of our business review and new five-year plan.