21380099VMZKRMN3EX362022-03-042023-03-0221380099VMZKRMN3EX362022-03-042023-03-02whitbreadplc:BeforeAdjustingItemsMemberiso4217:GBP21380099VMZKRMN3EX362022-03-042023-03-02whitbreadplc:AdjustingItemsMember21380099VMZKRMN3EX362021-02-262022-03-03whitbreadplc:BeforeAdjustingItemsMember21380099VMZKRMN3EX362021-02-262022-03-03whitbreadplc:AdjustingItemsMember21380099VMZKRMN3EX362021-02-262022-03-03iso4217:GBPxbrli:shares21380099VMZKRMN3EX362021-02-25ifrs-full:IssuedCapitalMember21380099VMZKRMN3EX362021-02-25ifrs-full:SharePremiumMember21380099VMZKRMN3EX362021-02-25ifrs-full:CapitalRedemptionReserveMember21380099VMZKRMN3EX362021-02-25ifrs-full:RetainedEarningsMember21380099VMZKRMN3EX362021-02-25ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember21380099VMZKRMN3EX362021-02-25ifrs-full:OtherReservesMember21380099VMZKRMN3EX362021-02-2521380099VMZKRMN3EX362021-02-262022-03-03ifrs-full:IssuedCapitalMember21380099VMZKRMN3EX362021-02-262022-03-03ifrs-full:SharePremiumMember21380099VMZKRMN3EX362021-02-262022-03-03ifrs-full:CapitalRedemptionReserveMember21380099VMZKRMN3EX362021-02-262022-03-03ifrs-full:RetainedEarningsMember21380099VMZKRMN3EX362021-02-262022-03-03ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember21380099VMZKRMN3EX362021-02-262022-03-03ifrs-full:OtherReservesMember21380099VMZKRMN3EX362022-03-03ifrs-full:IssuedCapitalMember21380099VMZKRMN3EX362022-03-03ifrs-full:SharePremiumMember21380099VMZKRMN3EX362022-03-03ifrs-full:CapitalRedemptionReserveMember21380099VMZKRMN3EX362022-03-03ifrs-full:RetainedEarningsMember21380099VMZKRMN3EX362022-03-03ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember21380099VMZKRMN3EX362022-03-03ifrs-full:OtherReservesMember21380099VMZKRMN3EX362022-03-0321380099VMZKRMN3EX362022-03-042023-03-02ifrs-full:IssuedCapitalMember21380099VMZKRMN3EX362022-03-042023-03-02ifrs-full:SharePremiumMember21380099VMZKRMN3EX362022-03-042023-03-02ifrs-full:CapitalRedemptionReserveMember21380099VMZKRMN3EX362022-03-042023-03-02ifrs-full:RetainedEarningsMember21380099VMZKRMN3EX362022-03-042023-03-02ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember21380099VMZKRMN3EX362022-03-042023-03-02ifrs-full:OtherReservesMember21380099VMZKRMN3EX362023-03-02ifrs-full:IssuedCapitalMember21380099VMZKRMN3EX362023-03-02ifrs-full:SharePremiumMember21380099VMZKRMN3EX362023-03-02ifrs-full:CapitalRedemptionReserveMember21380099VMZKRMN3EX362023-03-02ifrs-full:RetainedEarningsMember21380099VMZKRMN3EX362023-03-02ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember21380099VMZKRMN3EX362023-03-02ifrs-full:OtherReservesMember21380099VMZKRMN3EX362023-03-0221380099VMZKRMN3EX362021-03-042022-03-03
Annual Report and Accounts 2022/23
Investing to win
Performance
Statutory revenue Adjusted profit/
(loss) before tax†
Statutory profit before tax
£2,625m £413m £375m
2021/22 £1,703m 2021/22 £(16)m 2021/22 £58m
Adjusted operating cash flow† Total cash capex UK† Total cash capex Germany†
£719m £447m £99m
2021/22 £404m 2021/22 £171m 2021/22 £90m
Lease adjusted net debt
toFFO†
Net cash† Adjusted basic earnings/
(loss) per share†
2.7x £171m 162.9p
2021/22 4.4x 2021/22 £141m 2021/22 (2.5)p
Statutory basic earnings
pershare
Dividend per share Total dividend
138.4p 74.2p £149m
2021/22 21.1p 2021/22 34.7p 2021/22 £70m
† See pages 206 to 210 for definitions ofalternativeperformance measures.
This footnote is referenced throughout the report.
Throughout this report all percentage growth comparisons are made comparing the current year (2022/23
performance for to 2021/22 that was partially impacted by the pandemic and 2019/20, with 2019/20 being the
last financial period before the onset of the pandemic)
Whitbread is the owner of Premier Inn, the UK’s biggest
hotel brand, with over 83,500 rooms in over 840 hotels
and a growing presence in Germany with 9,000 rooms in
51 hotels, offering quality accommodation at affordable
prices in great locations.
People are at the heart of our business. We employ over
40,000 team members in over 1,600 Premier Inn hotels
and restaurants across the UK and Germany and serve
over five million customers every month.
We are investing to win.
New
leadership
  Read more on pages 8 to 11
Structured
governance
  Read more on pages 68 to 115
Investing
to win
  Read more on pages 31
People
and culture
  Read more on pages 36 to 41
Embedding
sustainability
  Read more on pages 42 to 53
Strategic report
2 Whitbread at a glance
4 Our investment case
6 Chairman’s statement
8 Chief Executive’s review
12 Business model
14 Our strategic framework
16 Growth and innovation
intheUK
18 UK market, strategy
andperformance
22 Focus on our strengths
togrow in Germany
24 German market, strategy and
performance
28 Enhance our capabilities
tosupport long-term growth
30 Long-term growth strategy
and performance
32 Chief Financial
Officer’sreview
36 Chief People Officer’s review
40 Whitbread Inclusion Networks
42 Force for Good
52 Taskforce on Climate Related
Financial Disclosure
53 Transition Plan
54 Section 172 statement
55 Stakeholder engagement
andsustainability
59 Non-financial
informationstatement
60 Principal risks
anduncertainties
67 Viability statement
Governance
68 Governance at a glance
70 Chairman’s introduction
togovernance
72 Corporate governance
74 Board of Directors
78 Executive Committee
79 Board activities during
theyear
80 Board evaluation
84 Q&A with Horst Baier
86 Audit Committee report
90 Nomination Committee
report
92 Remuneration Committee
report
95 Remuneration at a glance
98 Directors’ remuneration
policy
103 Annual report on
remuneration
116 Directors’ report
121 Directors’ responsibility
statement
122 Assurance report
124 Independent auditor’s report
Consolidated accounts 2022/23
133 Consolidated
incomestatement
133 Earnings per share
134 Consolidated statement
ofcomprehensiveincome
135 Consolidated statement
ofchangesinequity
136 Consolidated balance sheet
137 Consolidated cash
flowstatement
138 Notes to the consolidated
financialstatements
Whitbread PLC
Company accounts 2022/23
193 Company balance sheet
194 Company statement
ofchanges inequity
195 Notes to the Company
financialstatements
Other information
205 Glossary
206 Alternative performance
measures
211 Shareholder services
Our year at a glance
2022/23 has been an
outstanding year forWhitbread
Our strategy of investing
through periods of uncertainty
has underpinned our strong
performance in the UK and
provided real momentum as we
continue to expand in Germany.
We have a long track record
of generating attractive and
consistent rates of return for our
shareholders whilst also ensuring
we remain a Force for Good.
We have emerged from the
pandemic with a strong balance
sheet and significant opportunities
for growth, and remain confident
in delivering attractive long-term
returns for shareholders.
Strategic report
Whitbread Annual Report and Accounts 2022/23
1
Other informationFinancial statementsGovernance
Whitbread at a glance
What sets us apart?
Our ambition
To be the world’s best budget
hotelbrand
Where we operate
The German hotel market is 40% larger than the UK
and shares many ofthe attractive structural
characteristics that drove Premier Inn’s success in
theUK. Germany represents a significant growth
opportunity and we are committed tobecoming the
number one budget hotel brand and delivering
attractive long-term returns on capital.
Having just six hotels open in March 2020, Premier Inn
now has 51 operational hotels
1
and a committed pipeline
of 37 further hotels that are planned to open over the
next few years. With approximately £1 billion already
committed
1
, we have a growing national footprint and
aclear pathway to becoming Germany’s biggest
budgethotel chain.
1 Includes one site in each of Guernsey and the Isle of Man and two sites in each of Jersey and Ireland.
2 As at 2 March 2023
3 Includes one site in Austria.
United Kingdom
1
The UK is a large and profitable hotel market that is
supported by high levels of domestic and inbound travel.
The market has evolved in recent years, especially
following the pandemic, with a significant decline in the
independent sector. In contrast, the branded budget
hotel sector, including Premier Inn, has grown.
Premier Inn is the clear market leader in the branded
budget sector with over 83,500 rooms in 847 hotels
across the UK and Ireland.
2
As a result, wherever our
guests want to stay, there is always a Premier Inn nearby.
Whether travelling for business or leisure, you can always
rely on getting a great night’s sleep at an affordable
price and know you will receive a warm welcome from
our friendly teams.
Germany
3
Our purpose
To provide quality, affordable hotel
rooms for our guests, to help them to
live and work well and to positively
impact the world around us. With no
barriers to entry or limits to ambition,
we will provide meaningful work, skills
and career development opportunities
for our teams
Our operating model
We own, operate and manage a large network of hotels
andrestaurants. With significant asset-backing, our
verticallyintegrated model ensures the consistent delivery
ofahigh-quality product for our guests, attractive and
sustainablerates of return for our shareholders whilst
having a positive impact on our other key stakeholders.
  Read more on pages 12 and 13
Our values
We care passionately about our guests, our teams and
the communities we serve. Our culture is driven by each
of our core values below:
Genuine
Really caring about our customers and team
Confident
Striving to be the best at what we do
Committed
Working hard for each other
  Read more on pages 22 to 27  Read more on pages 16 to 21
Whitbread Annual Report and Accounts 2022/23
2
Our brands
Our hotel brands
Premier Inn is the UK’s largest hotel brand and has a growing
presence in Germany. Our consistent customer proposition
issynonymous with high-quality, great value and excellent
customer service. We offer comfort that everyone can count
on, with a choice of rooms, flexible rates and a great
breakfastto start your day.
‘hub by Premier Inn’ is one of our more recent hotel concepts,
offering a compact, digitally-advanced in-room experience at
agreat price. We now have 15 hub hotels open across London
and Edinburgh, and a committed pipeline to open more over
the next few years. Meanwhile, at ‘ZIP by Premier Inn’, you get
acompact room, a simple stay and, best of all, a price to match.
Our food and beverage brands
Our quality food and beverage offer, especially breakfast,
isakey part of the overall guest experience. Our hotel guests
have access to either a restaurant within the hotel or just next
door. We have a wide range of brands enabling a broad and
tailored food and beverage offer for both our hotel guests and
external customers, all at an affordable price.
Opportunity
We want all of our team
memberstoreach their
potential withno barriers to
entryand no limitstoambition
We will be for everyone, championing
inclusivity across the organisation
andimproving diversity
Team member wellbeing will
beconsidered across all of
ourbusinessareas
We will have industry-leading training
and development schemes
 Read more on pages 46 and 47
You will find references to the three elements of our sustainability programme throughout this Annual Report,
each is identified by its own distinctive icon below:
Force for Good
Community
Making a meaningful
contribution tothe
customers and communities
we serve
We will make a positive contribution
tothecommunities we serve
Working collaboratively with our
teams and supply chain, we will
support our charity partners to
meettheir goals
We will support the wellbeing of
ourcustomers and team members
 Read more on pages 48 and 49
Responsibility
Always operating in a way
that respectspeople
andtheplanet
We will source responsibly
andwithintegrity
We will reduce our
environmentalimpact
We will always do business
therightway
 Read more on pages 50 and 51
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
3
79k
28k
84k
42k
59k
11.2%
10.0%
10.9%
12.9%
13.5%
Number of UK rooms Premier Inn UK ROCE
FY15
FY20
FY23
FY10FY05
Value score
Premier Inn
Hilton
Travelodge
Holiday Inn
Airbnb
Holiday Inn Express
Ibis
Best Western
Marriott
Crowne Plaza
Quality score
35
30
25
20
15
10
5
0
0
45403530252015105
Whitbread is the UK’s largest hospitality
business,employing approximately 40,000
people, and a long-term constituent of the
FTSE100 index. We own and operate the UK’s
We deliver attractive returns on a
growing asset base
Our vertically integrated business model, continued
capital discipline and diligent execution of our business
strategy have combined to deliver strong growth and
rates of return on a growing assetbase.
Since 2019/20, we have added over 6,000 rooms across
the UK and Ireland whilst maintaining a return on capital
employed
† (ROCE) within our target range of 10-14%,
excluding years affected by the pandemic. In 2023, our
estate stood at 83,576 rooms and we achieved a return
on capital of 12.9% in the UK.
Whilst still in its early stages of development, we believe
that our German business, once mature, willdeliver a
similar profile of growth and attractive long-term returns.
Our vertically integrated operating
modeldrives a winning
customerproposition
Our model provides us with significant competitive
advantage. Ownership of all aspects of our operations
ensures the delivery of a consistent, high-quality product,
whilst our scale and financial discipline mean we can
provide it at a great price. We also offer more choice by
hotel concepts such as ‘hub by Premier Inn’ and new
room formats such as Premier Plus. Our food and
beverage offer drives additional RevPAR, whilst our Force
for Good sustainability programme drives our
environmental, socialand governance (ESG) agenda.
Premier Inn was again voted number one for customer
satisfaction, impression, value and likelihood-to-
recommend
1
, a positioning that drives brand strength and
customer loyalty, both of which are supported by our
brand and digital marketing initiatives. As a result, almost
all of our bookings are made direct, significantly lowering
our acquisition and retention costs.
1
2
number onehotel chain with a quality food and
beverage (F&B) offer. We are also expanding rapidly
in Germany. Wehave identified five core
elementsofour investment case:
Premier Inn UK Return on capital†
1 YouGov BrandIndex Satisfaction, Impression, Value, Recommended and
Quality scores as at 2 March 2023 based on a nationally representative
12-week moving average.
YouGov BrandIndex
2
2 YouGov BrandIndex Quality & Value scores as at 2 March 2023 based on a
nationally representative 52-week moving average
Whitbread Annual Report and Accounts 2022/23
4
Why invest?
Our investment case
125,000
83,500
91,000
Network
potential
Current
network +
committed
pipeline
Current
network
Profitability of hotels open > 12 months
H1 FY23 MAT
€5m
FY23
€(5)m
FY22
€(19)m
Open
Germany
Total estate (open and committed)
78%
77%
22%
23%
Open
Group
Total estate (open and committed)
46%
49%
54%
51%
Open
UK
Total estate (open and committed)
43%
45%
57%
55%
Operational and financial flexibility
Freehold Leasehold
We have significant growth potential
intheUK and Ireland
During 2022/23, we updated our detailed network plan
for the UK and Ireland, which identified an increase in
our long-term market potential from 110,000 rooms to
125,000 rooms. We plan to open rooms in locations
where we currently have no hotels and also in high-
demand locations where we already have a presence.
We are on track to become the
number one hotel chain in Germany
Since opening our first hotel in 2016, our network has
grown rapidly through a combination of organic growth
and Mergers and Acquisitions (M&A). As at the end of
2022/23, we had 51 operational hotels and a further 37 in
the pipeline. Whilst our pace ofexpansion means that our
German business as a whole remained loss-making in
2022/23, our established hotels reached profitability
1
inaggregate in the year and we remain confident in
reaching our long-term target of 10-14% return on capital.
1 Adjusted profit before tax excluding administration and overhead costs for
hotels that have been open and trading for a full 12 months as 4 March
2022 (see alternative performance measure (‘APM’) in the glossary and
reconciliation at the end of this document)
Strong balance sheet with significant
assetbacking
We have been rated investment grade
1
and as at 2 March 2023
had net cash of £171m†. We have a strong balance sheet that
underpins ourinvestment programme and gives us
confidence to invest, even through periods of increased
uncertainty. We have a substantial freehold property portfolio
that provides operational flexibility and is a potential source
of future funding through selective sale and leaseback
transactions. Afurther advantage of a large freehold estate is
our ability to optimise our portfolio by extending existing
sites, closing sub-scale hotels andopening bigger, more
efficient hotels, thereby maximisingreturns.
3 4
5
1 Fitch Ratings – as at 20 February 2023
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
5
Our teams have again delivered
an outstanding performance and
our business has emerged from
the pandemic in a strong market
position. We have increased our
market share, delivered an
excellent operational and
commercial performance in our
core UK market and grown our
presence in Germany. At the
same time, we have maintained
strong corporate governance and
continued to deliver our industry-
leading ESG programme, Force
for Good.
The nature of our business requires that
we invest for the long term. This can be
more challenging during periods of
macroeconomic difficulty or stress,
when the proximity of short-term
concerns may appear to outweigh more
distant but significant, long-term
benefits. However, we remain
committed to our approach of
‘investing to win’ that combines
rigorous strategic planning, prudent
financial management and excellent
execution. Our latest financial results
are the product of each of these factors
working together and represent a
team-driven performance. Whilst
delighted with our results, I don’t see
the past year as being exceptional and
believe it is what our investors and
other stakeholders can and should
expect from us.
Full-year results
The Group’s financial performance in
2022/23 was driven by Premier Inn UK.
Group statutory profit before tax was
£375m, an increase of £317m versus the
prior year that benefited from COVID-
related Government support schemes in
the UK and Germany. The Group
received no Government support,
related to the 2022/23 financial year.
Our business model continued to
generate strong free cash flow during
the year with the result that our ongoing
programme of investment, with capex
totalling £546m in 2022/23, was entirely
self-funded and our net cash balance at
the end of the year increased to £171m
(2021/22: £141m).
Dividend
Against this backdrop, the Board is
recommending a final dividend of 49.8p
per share or £100m in total, a 43%
increase from last year. The final
dividend will be paid on 7 July 2023 to
shareholders on the register on 26 May
2023. As in previous years, the Dividend
Reinvestment Plan will enable eligible
shareholders to receive their dividend
entitlement in the form of additional
Whitbread shares. Details of how to
participate in this plan can be found
onthe Company’s website.
Adam Crozier
Chairman
Whitbread Annual Report and Accounts 2022/23
6
Outstanding team
performance
Chairman’s statement
Capital allocation
The Board is committed to maintaining
astrong balance sheet with investment
grade metrics that provide long-term
financial and commercial benefits to the
Group. These benefits are underpinned
by our capital discipline and the regular
application of a clear capital allocation
framework. Given the strength of the
Group’s performance and its financial
position, the Board believes that it is
now possible to return excess capital to
shareholders and we have announced a
£300m share buyback to be completed
during H1 2023/24. Details regarding
the share buyback and the Group’s
capital allocation framework can be
found in the Chief Executive’s review
onpages 8 to 11. Future capital returns
will be subject tothe Group’s financial
performance, the business outlook and
the availabilityof alternative, more
valueenhancing opportunities.
Force for Good
The breadth of our sustainability
programme is a real source of pride and
we are determined to continue to drive
it forwards across all areas of our
business. As summarised on pages 42 to
51, the Group has made great progress
across each of our three pillars of
opportunity, community and
responsibility over the past year.
Opportunity
Given their importance for our long-term
success, it is vital that our 40,000 team
members have the opportunity to
succeed, feel valued, are listened to and
are able to perform at their best.
Ensuring our teams are financially secure
during a cost-of-living crisis is hugely
important and during the year we
brought forward an annual pay increase
ahead of the National Living Wage and
paid a cost-of-living support payment.
Responsibility
At the core of our responsibility
programme is our commitment to reach
net zero carbon for our Scope 1 and 2
emissions by 2040. As we own or
control almost all areas of the value
chain, we are able to drive the changes
required to meet our goals and are
working closely with our suppliers to
reduce our Scope 3 emissions by 50% by
2035 and 64% by 2050. Consistent with
our overall approach, this year’s Annual
Report is recyclable, for further details
please see the inside back cover.
Community
Given the scale and breadth of our
operations, we are determined to make a
positive contribution to the communities
we serve. Having renewed our long-
standing partnership with Great Ormond
Street Hospital Children’s Charity (GOSH
Charity) during the year, our teams have
increased the total funds raised over the
past 11 years to nearly £22m. In support of
the ongoing humanitarian crises in
Ukraine, we also donated over 50,000
duvets and pillows and raised over
£680,000 from our team members and
guests that has been donated to the
Disaster Emergency Committee (DEC)
insupport of Ukraine.
The Board
There have been several changes to the
Board over the past year, including a
change of leadership, with Alison Brittain
stepping down as Chief Executive on
17 January 2023. During Alison’s tenure,
she delivered the sale of Costa for £3.9bn
and the subsequent return of funds to
shareholders, steered the Group through
the pandemic and drove our market-
leading position in the UK as well as
expanded our business in Germany. This
outcome was in large part down to
Alison’s excellent leadership, her strategic
thinking as well as her unwavering focus
on operational excellence. On behalf of
the Board and all of the Group’s
stakeholders, I want to thank Alison for
her enormous contribution over her
seven-year tenure and wish her every
success for the future.
Having anticipated that Alison would at
some point wish to step down from the
Board during the past financial year, we
conducted a thorough executive search
and shortlisted a small number of
candidates, each of whom was
interviewed by the Board and presented
their assessment of the Group’s strategy
and plans. Dominic Paul was our
unanimous choice and we are delighted
that he has taken over as Chief Executive.
He brings a wealth of experience from his
time in the airlines and cruise industries
as well as having been CEO of Domino’s
Pizza Group plc. Dominic is well known to
Whitbread, having been the CEO of
Costa prior to its sale back in 2019. He
therefore has a good understanding of
our culture, our values and our overall
business approach. Whilst we do not
expect any significant changes to our
overall strategy, Dominic brings great
drive and energy to the Group, with a
fresh perspective and a clear operational
focus. He includes his early reflections as
part of his Chief Executive’s review on
pages 8 to 11.
During the year, we were pleased to
appoint two non-executive directors:
Dame Karen Jones and Dame Cilla
Snowball. Both have had distinguished
careers in their respective fields and
have brought some additional and
complementary skills to the Board.
In terms of Board diversity, the Board is
now 33% female and we are committed
to achieving our 40% target in the near
future. We plan to add another female
director to the Board later this year,
improving our balance further. We are
also committed to having a female
appointee in at least one of the top four
senior Board positions in the near future.
I will provide further updates on our
progress in futureannual reports.
Governance
It is clear from our ongoing programme
ofengagement that corporate
governance remains a key area of focus
for investors. Having held a number of
face-to-face meetings with investors
over the past year, I have been able to
hear first hand views on a range of
topics including strategy, succession,
corporate governance, remuneration,
environmental and social issues as well
asoperational and financial
performance. We have again sought to
enhance our disclosures in this Annual
Report and Ilook forward to hearing
how we can continue to improve.
Having taken on board feedback received
following the 2022 AGM, executive
remuneration remains a key area of focus
for both the Board and the Remuneration
Committee. In accordance with the
remuneration policy that was approved
at last year’s AGM, we have sought to
ensure that our executives are
appropriately incentivised to achieve
stretching targets and that the structure
of such incentives best aligns with the
interests of shareholders and supports
the delivery of long-term, sustainable
returns. In agreeing the levels of
achievement set out in the remuneration
report, we have considered carefully the
strong performance of the business as
well as the Group’s impact on a wide
range of interested parties including our
staff, customers, shareholders, suppliers,
landlords and other stakeholders. Frank
Fiskers, the Chair of the Remuneration
Committee, sets out our approach on
pages 92 to 115.
Annual general meeting
The AGM will take place at 2.00pm on
Thursday 22 June 2023 at our head
office in Dunstable. I look forward to
welcoming those of you who are able to
join us there. Alternatively, if you prefer,
you can attend via the online platform,
full details of which are included in the
formal Notice of Meeting that is
enclosed with this document.
Outlook
We have made a strong early start to
2023/24, driven by our market-leading
position in the UK and a growing
presencein Germany. Our ongoing
programme of investment means that,
whilst macroeconomic uncertainties
remain, we have good long-term
prospects, underpinning our confidence
in the outlook. With a strong,
asset-backed balance sheet, we are
wellplaced to continue to make good
progress in the current financial year.
Adam Crozier
Chairman
24 April 2023
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
7
Whitbread has had an
outstanding year. Whilst the
recovery in market demand,
inconjunction with a structural
decline in the independent hotel
sector has provided a helpful
backdrop, it is the combination
of our own initiatives and our
clearly differentiated business
model that has delivered such
an impressive operational and
financial performance.
These results reflect the strength of our
business model and our persistent focus
on delivering an excellent and consistent
guest experience across all of our hotels
and restaurants. That focus is embedded
within our business strategy, that my
predecessor, Alison Brittain and the
whole Executive team executed
brilliantly through one of the Group’s
most challenging trading periods. It has
also created a platform for future
growth, both in the UK and in Germany.
This sets us apart from our competitors
as we continue to invest through the
cycle with a clear focus on capital
discipline and operational excellence.
Having now spent some time out in the
business operations, both in the UK and
Germany, I am clear that our strategy is
the right one and I am hugely excited
about the opportunities we now have in
front of us. I want us to strengthen
further our position as the UK’s leading
hotel brand, improve our F&B
performance, deliver on some important
technology projects and replicate our
UK model at scale in Germany.
I am confident that we can deliver on
each of these tasks and more. To do so
will require the continued dedication
and hard work of our Executive team
and all of our 40,000 team members,
each of whom plays a vital role in driving
our success. I am excited to be leading
such a great team and I am optimistic
about our prospects.
2022/23 Financial Performance
Premier Inn UK was the key driver behind
the Group’s strong financial performance
in 2022/23. Total statutory revenue
increased by 27% versus 2019/20 to
£2,625m and adjusted operating profit
increased to £544 million, up 12% versus
2019/20. This performance reflects the
strength of our brand and operating
model as well as our ability to mitigate
inflationary pressures with strong pricing,
estate growth and our continued focus
on cost efficiency. An interest credit from
the pension fund surplus and higher
interest receivable on our cash balances,
see page 155, resulted in a 15% increase in
adjusted profit before tax to £413 million
(2021/22: loss of £16 million and 2019/20:
profit of £358 million). Adjusting items in
the period resulted in a charge of
£39 million, including net impairment
charges of £33 million, to deliver
statutory profit before tax of £375 million
(2021/22: £58 million and
2019/20: £280 million). A tax charge of
£96 million led to a statutory profit after
Dominic Paul
Chief Executive
Whitbread Annual Report and Accounts 2022/23
8
Chief Executive’s review
Investing to win
tax of £279 million (2021/22: £43 million
and 2019/20: £218 million) resulted in an
adjusted basic earnings per share of
162.9p (2021/22: (2.5)p and
2019/20: 166.3p) and a statutory basic
earnings per share of 138.4p
(2021/22: 21.1p and 2019/20: 125.3p).
This strong performance generated
substantial free cashflow in the period,
funding our continued programme of
investment. While total capital
expenditure of £546 million was
£285 million higher than 2021/22,
reflecting further investments in our
estate, infrastructure and product, net
cash also increased to £171 million
(2021/22: £141 million).
Against this backdrop and with strong
current trading and a positive outlook,
the Board is recommending a final
dividend of £100 million, an increase of
43% versus 2021/22. The final dividend
of 49.8p per share will be paid to eligible
shareholders on 7July 2023 and further
details can be found on page 160.
UK – Extending our market
leadingposition
Having continued to invest in our estate,
teams and infrastructure during the
pandemic, we were well-placed to
capitalise on the uplift in demand once
restrictions were lifted. Total
accommodation sales rose by 37% versus
2019/20, driven by increased occupancy,
higher average room rate (‘ARR’) and
estate growth. Whilst the performance
across the year was evenly spread
between London and the Regions, London
revenue performance lagged the Regions
during the first quarter of the year, but
quickly recovered thanks to a rebound in
office-based business demand and ended
the year 40% ahead of 2019/20 while the
Regions were 36% ahead of 2019/20.
The strength of our trading performance
continues to be driven by our ‘investing
to win’ strategy that is enabling us to
capitalise on the structural opportunities
in the market, increase revenue and
continue to deliver annual cost savings.
F&B remains an important element of
the Premier Inn proposition and also
helps drive incremental RevPAR in our
hotels. Whilst the hotel market has
recovered strongly, the UK pub
restaurant market remains challenging
with the cost-of-living crisis and high
inflationary pressures impacting the
recovery in demand. Although higher
levels of hotel occupancy meant that
F&B sales were 40% ahead of 2021/22,
they remained 4% behind 2019/20.
Despite an increase in spend per head,
customer volumes at our branded
restaurants, that are focused at the
value-end of the market, remained
below pre-pandemic levels.
Premier Inn Germany – Pathway to
profitability
In Germany, pandemic-related restrictions
lasted longer than in the UK and were
only lifted during the first quarter of
2022/23. Once lifted, the market
rebounded strongly with an increasing
number of leisure events, trade fairs and
the return of business travel. This led to a
strong trading performance throughout
the first half and into the third quarter
with our cohort of 18 established hotels
(those which had been trading for more
than 12 months at the start of 2022/23)
trading in line with the M&E market.
Whilst the fourth quarter is traditionally
our lowest occupancy quarter, market
demand was a little softer than expected.
Having executed an ambitious growth
strategy over the last three years, that
included two large acquisitions being
completed during the pandemic, most of
our hotels traded ‘restriction-free’ for the
first time in 2022/23. The pace of our
expansion also means that the majority
of our hotels are not yet mature and will
take some time to reach their full profit
potential. We are however encouraged by
the performance of our cohort of 18
established hotels, which was profitable
in aggregate† in 2022/23. Given our pace
of growth over the last three years,
together with inflationary pressures,
operating costs increased significantly
versus 2019/20 resulting in an adjusted
loss before tax of £50 million, which was
within our previous guidance.
We have a clear plan and having
invested and committed £1 billion on our
open estate and committed pipeline, we
are determined to become the largest
hotel chain in Germany and remain
on-track to achieve our long-term target
of between 10-14% return on capital.
Strong balance sheet underpinning our
investing to win strategy
The strength of our balance sheet gives
us the confidence to continue to invest
and seize opportunities which meet our
strict investment criteria. Total capital
expenditure was £546 million
(2021/22: £261 million) and included
three freehold purchases and other
expansionary capex totalling
£362 million. Non-expansionary capex of
£184 million included the planned
replacement of 25,000 new beds across
our UK estate, our ongoing refurbishment
programme and a number of ongoing IT
projects including the upgrade to our
hotel management system.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
9
These results reflect the strength of our
business model and our persistent
focus on delivering an excellent and
consistent guest experience across all
of our hotels and restaurants.
Premier Inn Essen City Limbecker Platz
Our teams
As I mentioned in my introduction, at
the heart of our business are our teams.
They deliver outstanding experiences for
our guests and are key to our excellent
operational and financial performance,
underpinning our position as the UK’s
number one hotel brand. With record
levels of occupancy, our teams have
been working harder than ever to ensure
we continue to deliver a consistent,
high-quality experience for our guests.
We remain committed to supporting our
people and safeguarding their mental,
physical and financial wellbeing in
addition to helping them develop their
careers. Recognising the impact of the
challenging macroeconomic
environment and cost-of-living crisis, we
continued to invest in team member pay,
reward, development and wellbeing,
helping to support our teams during this
difficult time. In return, we have seen
high levels of engagement, an increase
in average tenure and a sustained quality
experience for our guests. We are
delighted to have been recognised as a
‘Top Employer’ from the Top Employers
Institute for the thirteenth consecutive
year, which is a testament to our efforts
and the strength of our business culture.
A clear business strategy
Our strategy is focused on driving
long-term, sustainable returns for our
shareholders whist working with our
stakeholders to ensure we are driving
positive change through our Force for
Good sustainability programme. Our
vertically integrated model and strong
balance sheet underpin the three pillars
of our business strategy:
• continuing to grow and innovate in
theUK
• focus on our strengths to grow in
Germany; and
• enhancing our capabilities to support
long-term growth.
In the UK, the decline in the independent
hotel sector, combined with our
projected view of strong hotel demand,
has extended our runway for growth to
125,000 rooms versus the c.83,500
rooms we have open today. While we
will only invest where we see attractive
long-term returns, our recent track-
record of adding more rooms and filling
them at good rates reflects our scale,
our leading customer proposition, brand
strength and the benefit of our direct
distribution model. It also demonstrates
the power of our proprietary pricing
engine and in-house marketing expertise
that together underpin our confidence in
being able to continue to deliver
profitable growth in our core market.
In Germany, we are on course to
replicate our UK success and are making
good progress with over 9,000 rooms
now open and almost 7,000 in the
committed pipeline. Our near-term focus
includes continuing to build our brand,
refine our operating model and tailor our
proposition for the German market. We
remain on-track to reach break-even
with our current estate on a run-rate
basis during 2024 and remain on course
to reach our longer-term goal of 10-14%
return on capital.
Our model and strong balance sheet
means we can continue to invest in
strengthening our position in the UK,
fulfilling our potential in Germany and
delivering significant long-term benefits
for shareholders whilst also executing our
Force for Good sustainability programme.
Force for Good
Being a Force for Good is vital to the
sustainable and long-term growth of our
business. This is why our sustainability
programme is embedded across all
business functions, ensuring that
responsible business practices are
integrated into our operations. We have
set some stretching targets and while
our programme is broad, it is based on
robust materiality analysis and focuses
on our commitment to enable everyone
to live and work well and to look after
the environment and resources on which
we, and our business depend.
Last year we committed to obtaining SBTi
accreditation, this year both short-term
and net zero targets for Scopes 1, 2 and 3
have been submitted and are undergoing
review. We hope to receive validation
early in the next financial year. In the
meantime we have been making good
progress against all our carbon targets.
We have also published our first
Transition Plan, in line with the Transition
Plan Taskforce guidance, which presents
our action plan for how we will to get to
net zero carbon over the coming years.
We have also been working on two new
targets to reduce our environmental
impact and have set a water reduction
target to both minimise water usage
across our estate and to prioritise water
management in high-risk areas, see page
51 for further details.
Having raised a nearly £22 million for
Great Ormond Street Hospital Charity
(GOSH Charity) over the past 12 years,
we have reset our commitment to
continue to fundraise for the charity and
set new fundraising targets of £3 million
per year with an overarching total of
£20m. We are excited to start this new
phase in our partnership with GOSH
Charity as we continue to help them to
raise money to support some of the
most seriously ill children across the UK.
We continue to make good progress on
bringing to life our eight Diversity and
Inclusion commitments across
Whitbread. We are on-track to meet our
female representation target, with 40%
of senior leadership positions already
held by women and are working
towards our target to have 8% ethnic
minority representation.
Whitbread Annual Report and Accounts 2022/23
10
Chief Executive’s review
Outlook
Despite ongoing macroeconomic
uncertainty, with strong current trading,
a healthy balance sheet, significant
structural opportunities in both the UK
and German M&E hotel markets and an
ongoing programme of cost efficiencies,
we remain confident in the outlook for
2023/24.
UK hotel demand remains strong, as
evidenced by our current trading
performance and the strength of our
forward booked position, where we see
booked occupancy levels broadly in-line
with the previous year but at much
higher room rates. With a strong pricing
environment, and some scope to grow
occupancy as we annualise a softer Q1 in
2022/23, we remain confident in being
able to deliver sufficient like-for-like
sales growth† in 2023/24 to offset the
impact of inflation.
We continue to expect net cost inflation
between 7% and 8% in 2023/24,
including labour, F&B and utilities, that
are now 100% hedged for 2023/24,
partially offset by lower business rates.
These cost increases will be mitigated by
our efficiency programme and we
remain on-track to deliver further
savings in the current financial year.
In Germany, the outlook is also
encouraging. With a promising start to the
year, we are confident in being able to
deliver an improved financial performance
in 2023/24. We continue to expect our
existing estate in Germany to deliver a
pre-tax loss of between £20 million -
£30 million in 2023/24 with an additional
£10 million adverse profit before tax
impact to refurbish the six newly acquired
hotels at the end of 2022/23. We remain
on course to reach break-even on a
run-rate basis, including the newly
acquired hotels, during calendar year
2024 and achieve a longer-term return
oncapital target of 10-14%.
We will continue to invest through the
cycle and plan to add 1,500 – 2,000
rooms in the UK, most of which are
expected to open in the second half of
the year. In Germany, we plan to open
1,000 – 1,500 rooms, in addition to
refurbishing the recently acquired 900
rooms during 2023/24. We will continue
to invest in our IT infrastructure and
refurbishment programme which will
deliver attractive revenue growth and
cost savings in future years and expect
total capital expenditure in 2023/24 to be
between £400 million and £450 million.
Capital allocation and share buyback
signalling confidence into 2023/24
At the time of our interim results in
October 2022 and having reconfirmed
our investment grade status, we set out
our framework for capital allocation,
outlining our key priorities over the next
few years, based upon future profit and
cash generation under a range of
potential scenarios.
Having applied the framework at the
year-end as planned, and underlining
our confidence in the outlook, we have
announced an initial £300 million share
buy-back to be completed during the
first half of 2023/24. Future returns
willbe subject to the Group’s financial
performance, outlook and the
availability of alternative, more
value-enhancing opportunities.
Maintaining our momentum into 2023/24
As we move into 2023/24, with a strong
balance sheet and significant
opportunities both in our core UK market
as well as in Germany, we are in a great
position to continue to deliver attractive,
long-term returns for shareholders and
Ilook forward to driving the business
forward with pace and ambition.
Dominic Paul
Chief Executive
24 April 2023
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
11
Introduction
We have a highly structured and differentiated business model that is sustained by a continuous
programme of ‘investing to win’ across all areas of our operations. The diligent execution of our
three-pronged strategy, in conjunction with the strengths of our operating model, have combined
todeliver an impressive track record of consistent rates of return from a growing capital base that
weinvest back into the business and return toour shareholders.
Investing to win
83,500
Open rooms
c.39,000
Team members
9,000
Open rooms
c.1,300
Team members
Germany
£1,165m
Cash and cash
equivalents
£400-
450m
Annual capex
programme
Long-term growth
UK
FOCUSED STRATEGY
THE PROFIT WE CREATE
Driving profitable growth and attractive return on capital
How we operate
THE VALUE WE SHARE
£
HOW WE OPERATE
Network scale
Low-cost distribution
Owner operator
Flexible property model
Highly invested brand
Proprietary trading engine
F&B proposition
Force for Good
1
7
5
3
2
8
6
4
Guests People Communities
Investors
Whitbread Annual Report and Accounts 2022/23
12
Business model
Focused business strategy
The power of our business model
isunderpinned by our
three-prongedstrategy:
1. Grow and innovate in the UK
2. Focus on our strengths to grow
inGermany
3. Enhance our capabilities to
support long-termgrowth
Leveraging our leading market
position in the UKmeans we can
continue to grow, both in the UK
andinternationally. Our focus on
maintaining market-leading guest
scores, alongside our dedication to
excellent customer service, means
werank highly amongst our
competitors on both the value and
quality we provide. Our hotel pricing
strategy enables us to optimise our
occupancy and rate mix across the
booking curve, while our food and
beverage (F&B) offering is a core
element ofour customer proposition.
How we operate
Network scale
With over 840 hotels open, Premier
Innis the UK’s largest hotel chain,
withextensive national coverage and
arange of scale benefits, meaning we
are well placed to service the needs of
our guests, wherever they might need
to stay. In Germany our business has
grown rapidly and we remain one
ofthe fastest growing hotel chains
inGermany.
Highly invested brand
Premier Inn is regularly voted as
theUK’s favourite hotel brand,
synonymous with high quality, great
value and excellent customer service.
We are growing our brand awareness
in Germany, building customer loyalty
and achieving encouraging customer
scores as we seek to expand our
portfolio further.
Low-cost distribution
With less than 1% of bookings being
made via third-party online travel
agents (OTAs) in the UK, our direct
distribution model provides us with
complete ownership of the customer
relationship and is a clear competitive
advantage by minimising our customer
acquisition costs. In Germany, while the
vast majority of our bookings come to
us direct, our brand is still inits infancy,
meaning we make selective use of
third-party channels tohelp capture
demand and grow market share.
Proprietary pricing model
maximisesyield
Our proprietary and fully automated
trading engine (ATE) is a major
sourceof competitive advantage,
enabling us to actively manage our
pricing strategies, increase yield and
maximise RevPAR across both the UK
and Germany. Our direct distribution
model means we can integrate ATE
with our digital marketing, optimising
promotional spend, maximising yield
and minimising costs.
Owner operator
We own all aspects of our hotel and
restaurant operations, ensuring greater
control over the customer
experience,resulting in a high-quality
offering delivered on a consistent basis.
This consistency drives high customer
scores, brand loyalty and also means
we can price ahead of competitors.
F&B proposition
Our F&B offer is central to the
PremierInn guest experience, with
ahot breakfast at the heart of our
customer proposition, increasing
occupancy and adding incremental
RevPAR. With a variety of different
F&B propositions across our UK
estate, wecontinue to seek ways in
which wecan increase returns further.
Flexible property model
Approximately 54% of the
Group’shotels are freehold, with
theremaining 46% operated as
leasehold. Our flexible approach
toproperty ownership improves our
ability to manage our estate, optimise
our network and secure hotels in the
right locations helping us to generate
attractive long-term returns.
Force for Good
Our long-established Force for Good
programme is our Company-wide
sustainability strategy. Fully embedded
within our operating model and across
all areas of our business, we have
industry-leading targets against
whichwe are measured and that
holdus accountable for the changes
we are seeking to make.
The value we share
Guests
The fact that 75% of all UK bookings are
made by guests who have stayed with
us before tells us our model is working.
We serve over five million guests every
year and continue to attract market-
leading guest scores.
People
Our people are at the heart of our
business. We believe in giving
everyone the opportunity to grow,
develop and be their best, with no
barriers to entry, and no limits to
ambition. We employ over 40,000
team members and helped 234 team
members complete their
apprenticeships within the last year.
Communities
Our hotels and restaurants are in
hundreds of communities across the
UK and Germany. Wehave a big part
to play in making them a great place to
live, work and dobusiness. Each year
we donate thousands of meals to
FareShare, our new site teams
undertake many hours of volunteering
in local projects and we create many
new jobs in our new hotels.
Investors
A strong and efficient balance sheet is
essential for our ‘investing to win’
strategy that is delivering attractive
returns on an expanding capital base.
This year we have increased our
dividend payments to 74.2p per share
and announced a £300m share
buy-back to be completed in the first
half of 2023/24.
The profit we create
The size of our operations mean we
drive significant economies of scale and
cost efficiencies, helping to mitigate
inflationary pressures and deliver
attractive operating margins. We
generate strong free cash flow,
underpinning our continued programme
of investment that in turn drives
profitable and sustainable growth with
attractive returns oncapital.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
13
2023 priorities 2023 progress 2024 priorities
Key performance
indicators (KPIs)
Risks
Find out more on pages 60 to 66
Force for Good
examples
Find out more
on pages 42 to 51
Grow and innovate in the UK
Continued market
share gains
Premier Inn remained ahead of the M&E sector, consolidating our
market-leading position and underpinned by our continued
programme of ‘investing to win’
Continue to outperform the M&E sector
• +25.2pp total accommodation sales
outperformance of the UK M&E sector
• +2pp market share gains
1. An uncertain economic outlook leads to
possible changes in consumer demand
andsignificant inflation
2. Extended stagnation of the UK property
market slows UK growth
3. Failure to deliver technology-led business
change projects
4. Divergence of performance across our hotels
and restaurants driving an increased focus on
our F&B proposition
5. Structural shifts and threats from new
disruptor brands impacting brand strength
In line with our long-term
target ofcarbon net zero
by 2040, in 2022/23 we
began construction in
Swindon of our first
gaslesshotel.
Find out more about
Responsibility at
Whitbread
onpages50 and 51
Hotel and restaurant
profit recovery and
margin recovery
Our UK business delivered an outstanding trading performance in
2022/23, with revenues and profit before tax above 2019/20. Margins
recovered to be well ahead of 2021/22, and almost back to pre-
pandemic levels despite high inflation
Continued margin recovery through revenue
growth and cost efficiencies into 2023/24
• £492m adjusted UK profit before
tax, +£78mversus 2019/20
• 19.6% UK profit margin, +15.1pp
versus2021/22
Expand consumer
choice
We have increased the number of Premier Plus rooms across our UK
estate from just over 2,000 to over 4,000 in 2022/23, with plans to
add more rooms in 2023/24
Continue to roll out Premier Plus rooms, twin
rooms, new beds, trial new room type (ID5)
and integrated ground floor concepts
• Opened 2,300 Premier Plus
roomsin2022/23
Maintain excellent
guest scores
We have maintained excellent guest scores and market-leading
brand and value for money ratings this year, meaning that we have
retained our ‘Best Value Hotel Chain’ award in the UK from YouGov
Brand Index for the 12th consecutive year
Expand our business customer base by driving
volumes through Business Booker, Business
Account and increasing the number of travel
management companies (TMCs) with whom
we have a relationship
• Winner of YouGov Brand Index ‘Best
Value Hotel Chain’ for 12th
consecutive year
• Consistently high net
promoterscores
Focus on our strengths to grow in Germany
Continue to build a
network across key
towns and cities
We opened over 2,000 rooms across ten hotels in Germany
inaddition to completing the acquisition of six hotels at the end
of2022/23, increasing our national footprint to just over
9,000rooms.
Continue to extend current network reach by
seeking additional sites in key cities
• 51 hotels now open with
9,000rooms
• Six hotel bolt-on
acquisitioncompleted
1. An uncertain economic outlook leads to
possible changes in consumer demand and
significant inflation
2. Impact of a prolonged downturn in the
German economic climate impacting
profitability growth
3. Failure to deliver technology-led business
change projects
4. Withdrawal of key third-party
supplierarrangements
5. Structural shifts and threats from new
disruptor brands impacting brand strength
We are continuing to invest
in growing and developing
careers for our team
members. This year we
introduced our Assistant
Hotel Manager training
programme in Germany.
Find out more about
Opportunity at Whitbread
onpages 46 and 47
Build brand
awareness in
Germany
We have made good progress in attracting corporate customers,
with an increasing number of Business Booker accounts in Germany
and new partnerships with TMCs
Drive brand awareness through
business and leisure channels
• 14% YouGov brand awareness,
+7%vs last year
9,000 Business Booker accounts
Utilise freehold
andleasehold
flexibility strategy
todrivereturns
We added 1,500 rooms to the committed pipeline, taking our open
and committed pipeline to almost 16,000 rooms, and completed the
bolt-on acquisition of six hotels
Open 1,000-1,500 rooms, convert recent
acquisitions to the Premier Inn brand and
continue to grow committed pipeline
• Added four sites to the
committedpipeline, two freehold
andtwo leasehold
Enhance our capabilities to support long-term growth
Sustain a strong
balance sheet and
liquidity, including
maximising our
cashflow
The strength of our trading performance resulted in robust operating
cash flow for the year, funding our capital expenditure programme
Maintain a strong balance sheet whilst
continuing to invest in order to maximise
long-term cash flow
• £171m net cash†
• £546m capital expenditure
spendin2022/23
• 2.7x lease-adjusted net debt: FFO
†
1. An uncertain economic outlook leading to
possible changes in consumer demand and
significant inflation
2. Cyber attacks and databreachesresulting
inoperational disruption andlossof income
3. Failure to deliver technology-led business
change projects
4. Structural changes to the macro labour market
impacting talent attraction and retention
5. Withdrawal of key third-party
supplierarrangements
6. Structural shifts and threat from new disruptor
brands impacting brand strength
We strive to have a positive
impact in the communities
in which we operate. When
we open new hotels, not
only do we create new jobs
forthe local economy, we
also donate volunteering
hours to local projects.
Find out more about
Communityat Whitbread
onpages48 and 49
Demonstrate
continued capital
discipline in
everything we do
We set out our capital allocation framework this year, outlining our
key priorities for the next few years. This will be applied regularly and
the Board has announced a £300m share buy-back to be completed
during the first half of 2023/24
Regularly apply capital allocation framework
and review all capital projects in line
with our existing investment appraisal process
• 12.9% UK return on capital†
• £300m share buy-back
Retention and
engagement of teams
Having revamped our recruitment process, we reduced the number
of vacancies across our operations versus the previous year. We also
paid a one-off cost-of-living support bonus and raised our minimum
pay rates ahead of the National Living Wage
Continue to improve team retention
andengagement
• 79% engagement score in UK
operations
• Improved recruitment processes
through reduced time to hire
Improve technology
capabilities
In the year, we progressed the upgrade of our hotel management
system, which is now in test in the UK and Germany. We are also
upgrading our networks and our HR systems
Develop core platforms to enable revenue
growth, improve guest and team experiences,
and drive efficiencies
• Continued development of IT
systems, with trials and testing to be
undertaken in the first half of
2023/24
Build on our
efficiency programme
This year we continued to deliver against our four-year £140m
efficiency programme, with £80m achieved across the last twoyears
Continue to drive cost savings across all areas
of our business in line with our four-year £140m
efficiency programme
• £40m of efficiencies delivered
in2022/23
• £140m efficiencies to be delivered
between 2021/22 and 2024/25
How we are investing to win
Whitbread Annual Report and Accounts 2022/23
14
Our strategic framework
2023 priorities 2023 progress 2024 priorities
Key performance
indicators (KPIs)
Risks
Find out more on pages 60 to 66
Force for Good
examples
Find out more
on pages 42 to 51
Grow and innovate in the UK
Continued market
share gains
Premier Inn remained ahead of the M&E sector, consolidating our
market-leading position and underpinned by our continued
programme of ‘investing to win’
Continue to outperform the M&E sector
• +25.2pp total accommodation sales
outperformance of the UK M&E sector
• +2pp market share gains
1. An uncertain economic outlook leads to
possible changes in consumer demand
andsignificant inflation
2. Extended stagnation of the UK property
market slows UK growth
3. Failure to deliver technology-led business
change projects
4. Divergence of performance across our hotels
and restaurants driving an increased focus on
our F&B proposition
5. Structural shifts and threats from new
disruptor brands impacting brand strength
In line with our long-term
target ofcarbon net zero
by 2040, in 2022/23 we
began construction in
Swindon of our first
gaslesshotel.
Find out more about
Responsibility at
Whitbread
onpages50 and 51
Hotel and restaurant
profit recovery and
margin recovery
Our UK business delivered an outstanding trading performance in
2022/23, with revenues and profit before tax above 2019/20. Margins
recovered to be well ahead of 2021/22, and almost back to pre-
pandemic levels despite high inflation
Continued margin recovery through revenue
growth and cost efficiencies into 2023/24
• £492m adjusted UK profit before
tax, +£78mversus 2019/20
• 19.6% UK profit margin, +15.1pp
versus2021/22
Expand consumer
choice
We have increased the number of Premier Plus rooms across our UK
estate from just over 2,000 to over 4,000 in 2022/23, with plans to
add more rooms in 2023/24
Continue to roll out Premier Plus rooms, twin
rooms, new beds, trial new room type (ID5)
and integrated ground floor concepts
• Opened 2,300 Premier Plus
roomsin2022/23
Maintain excellent
guest scores
We have maintained excellent guest scores and market-leading
brand and value for money ratings this year, meaning that we have
retained our ‘Best Value Hotel Chain’ award in the UK from YouGov
Brand Index for the 12th consecutive year
Expand our business customer base by driving
volumes through Business Booker, Business
Account and increasing the number of travel
management companies (TMCs) with whom
we have a relationship
• Winner of YouGov Brand Index ‘Best
Value Hotel Chain’ for 12th
consecutive year
• Consistently high net
promoterscores
Focus on our strengths to grow in Germany
Continue to build a
network across key
towns and cities
We opened over 2,000 rooms across ten hotels in Germany
inaddition to completing the acquisition of six hotels at the end
of2022/23, increasing our national footprint to just over
9,000rooms.
Continue to extend current network reach by
seeking additional sites in key cities
• 51 hotels now open with
9,000rooms
• Six hotel bolt-on
acquisitioncompleted
1. An uncertain economic outlook leads to
possible changes in consumer demand and
significant inflation
2. Impact of a prolonged downturn in the
German economic climate impacting
profitability growth
3. Failure to deliver technology-led business
change projects
4. Withdrawal of key third-party
supplierarrangements
5. Structural shifts and threats from new
disruptor brands impacting brand strength
We are continuing to invest
in growing and developing
careers for our team
members. This year we
introduced our Assistant
Hotel Manager training
programme in Germany.
Find out more about
Opportunity at Whitbread
onpages 46 and 47
Build brand
awareness in
Germany
We have made good progress in attracting corporate customers,
with an increasing number of Business Booker accounts in Germany
and new partnerships with TMCs
Drive brand awareness through
business and leisure channels
• 14% YouGov brand awareness,
+7%vs last year
9,000 Business Booker accounts
Utilise freehold
andleasehold
flexibility strategy
todrivereturns
We added 1,500 rooms to the committed pipeline, taking our open
and committed pipeline to almost 16,000 rooms, and completed the
bolt-on acquisition of six hotels
Open 1,000-1,500 rooms, convert recent
acquisitions to the Premier Inn brand and
continue to grow committed pipeline
• Added four sites to the
committedpipeline, two freehold
andtwo leasehold
Enhance our capabilities to support long-term growth
Sustain a strong
balance sheet and
liquidity, including
maximising our
cashflow
The strength of our trading performance resulted in robust operating
cash flow for the year, funding our capital expenditure programme
Maintain a strong balance sheet whilst
continuing to invest in order to maximise
long-term cash flow
• £171m net cash†
• £546m capital expenditure
spendin2022/23
• 2.7x lease-adjusted net debt: FFO
†
1. An uncertain economic outlook leading to
possible changes in consumer demand and
significant inflation
2. Cyber attacks and databreachesresulting
inoperational disruption andlossof income
3. Failure to deliver technology-led business
change projects
4. Structural changes to the macro labour market
impacting talent attraction and retention
5. Withdrawal of key third-party
supplierarrangements
6. Structural shifts and threat from new disruptor
brands impacting brand strength
We strive to have a positive
impact in the communities
in which we operate. When
we open new hotels, not
only do we create new jobs
forthe local economy, we
also donate volunteering
hours to local projects.
Find out more about
Communityat Whitbread
onpages48 and 49
Demonstrate
continued capital
discipline in
everything we do
We set out our capital allocation framework this year, outlining our
key priorities for the next few years. This will be applied regularly and
the Board has announced a £300m share buy-back to be completed
during the first half of 2023/24
Regularly apply capital allocation framework
and review all capital projects in line
with our existing investment appraisal process
• 12.9% UK return on capital†
• £300m share buy-back
Retention and
engagement of teams
Having revamped our recruitment process, we reduced the number
of vacancies across our operations versus the previous year. We also
paid a one-off cost-of-living support bonus and raised our minimum
pay rates ahead of the National Living Wage
Continue to improve team retention
andengagement
• 79% engagement score in UK
operations
• Improved recruitment processes
through reduced time to hire
Improve technology
capabilities
In the year, we progressed the upgrade of our hotel management
system, which is now in test in the UK and Germany. We are also
upgrading our networks and our HR systems
Develop core platforms to enable revenue
growth, improve guest and team experiences,
and drive efficiencies
• Continued development of IT
systems, with trials and testing to be
undertaken in the first half of
2023/24
Build on our
efficiency programme
This year we continued to deliver against our four-year £140m
efficiency programme, with £80m achieved across the last twoyears
Continue to drive cost savings across all areas
of our business in line with our four-year £140m
efficiency programme
• £40m of efficiencies delivered
in2022/23
• £140m efficiencies to be delivered
between 2021/22 and 2024/25
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
15
Investing
in our
core business
Whitbread Annual Report and Accounts 2022/23
16
Growth and innovation
inthe UK
Our strategy in action
Diversity and Inclusion
Diversity and Inclusion sits at the heart
ofourcommitment to being a Force
forGood,and plays a critical role in
ourstrategy.Internal inclusion networks,
including GLOW, which
representsWhitbread’s LGBTQ+ network,
help lay the foundations for creating
aninclusive environment for Whitbread’s
teams and guests. We have been ranked
asthe highest business in the hospitality
sector and 53rd overall in Stonewall’s
Workplace Equality Index in recognition
ofour commitment to the inclusion of
LGBTQ+ people in the workplace.
  Read more on pages 36 to 41
Rest Easy with Premier Inn
Premier Inn’s favourite brand ambassador,
Sir Lenny Henry, returned this year
tofrontthe second instalment of our
‘RestEasy’ brand campaign, highlighting
the quality and consistency that can be
found at every Premier Inn.
Withtheriseinthe cost-of-living, the
campaign emphasised the great value
andhigh-quality offering, synonymous with
Premier Inn, and helped to maintain our
leading brand awareness scores whilstalso
supporting our strongsales growth.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
17
Strategic report
The UK is a large and mature
hotel market with close to
162million rooms booked each
year and a total room supply of
approximately 686,000 rooms.
Themarket has evolved in recent
years, especially following the
pandemic, with a significant
decline in the independent sector.
In contrast, the branded budget
hotel sector, including Premier Inn,
has grown.
Hotel room demand isstrongly
correlated with economic growth
and RevPAR typically grows in
line with GDP. Whilst current
macroeconomic forecasts predict
a fall in GDP, this needs to be
viewed in the context of a decline
in total hotel supply. In line with
previous cycles, we expect to
seea rise in hotel demand once
GDP recovers, with increasing
occupancy followed by
averageroom rates.
Highly fragmented market with
accelerated independent decline
Following the pandemic, we believe
thattotal UK hotel supply contracted by
4% between 2019 and 2022, led by a
decline in the independent sector that
reduced by over 10%. The decline of the
independent sector accelerated as
customers migrated from independent
to budget branded hotels. Premier Inn
has grown significantly over the past
decade, supported by a major
investment in new rooms, and has
increased its market share of rooms
from 6% in 2010 to 12% in 2022.
Outlook for UK hotel supply
The UK is a highly attractive marketfor
Premier Inn, with large volumes of
domestic short-stay travel for both
business and leisure. Having declined
inthe pandemic, we believe
theindependent sector may continue to
contract as a result of high inflationary
pressures and a difficult economic
environment. It is therefore unlikely
thatthe total market will return to
pre-pandemic supply levels until 2026,
creating further opportunities for
Premier Inn. Thereafter, we expect total
supply to grow in line with previous
trends and we are confident in our
abilities to capture market share.
Structural advantages of the budget
hotel market
The budget branded hotel sector has the
highest room growth, reflecting
customers’ increasing preference for
quality and value for money. The sector
also has a proven resilience during
consumer and economic downturns, as
guests trade down to lower-cost
alternatives. The non-branded sector
declined over the last few years as larger
operators rebranded existing hotels into
the budget sector. We see a compelling
opportunity to continue to invest in new
capacity to grow our market share of
rooms and drive long-term sustainable
returns for our shareholders.
67m
population
686k
hotel rooms (4% decline in
total supply versus 2019)
12%
Premier Inn market
share of UK rooms
>10%
decline in independent
supply versus 2019
2026
Supply back to
2019 levels
162m
room nights booked
in the UK market
Total hotel supply
Premier Inn
2
010
678k
676k
685k
686k
692k
700k
698k
705k
706k
715k
686k
6%
7%
8%
8%
9%
9%
10%
10%
11%
11%
12%
2011 2012 2013
Total hotel supply ’000
2014 2015 2016 2017 2018 2019 20
22
Total supply contracted after the pandemic
Company data, 2022
Whitbread Annual Report and Accounts 2022/23
18
UK market, strategy and performance
UK market
UK strategy
Our strategy in the UK
andIreland is focused on
maintaining our position as the
UK’s leading budget branded
hotel chain, driving revenues
and maximising returns through
a number of key initiatives:
Expand and optimise our estate
The reduction in independent supply,
combined with projected strong hotel
demand, has created an increased
opportunity to grow our UK and Ireland
footprint from 110,000 to 125,000
rooms. We have identified a number
ofcatchments where we do not
currently have a presence or where we
can add more rooms without
cannibalising our existing estate. The
pace and extent of expansion will be
driven by the levels of potential financial
return, drawing upon our suite of
development options, including new
builds, conversions, single-site
acquisitions and extensions.
Highly effective marketing driving
website volumes
Our latest ‘Rest Easy’ advertising
campaign, launched in September 2022,
strengthened our brand positioning and
increased the volume of website visits.
Our brand campaigns are a powerful tool,
driving bookings, reducing customer
acquisition costs and strengthening
ourleading brand awareness scores.
Wehavealso established strong
relationships with a number of TMCs
which drive incremental booking volumes
and we believe can drive revenues further
though a number of planned incentives.
Develop our operational
andcommercial initiatives
Our proprietary automated trading
engine is a significant competitive
advantage. As we accumulate more
trading data and assimilate our
learnings, we are improving our trading
techniques, capabilities and pricing.
Bylinking our ATE’s performance
directly to our digital marketing, we are
also able to deploy promotional spend
only where it is needed. Building on
these trading improvements will create
opportunities to increase RevPAR and
lower customer acquisition costs.
Focus on operations
Ownership of all aspects of our
operations ensures the delivery of a
consistent, high-quality product at a
great price. Our significant
refurbishment, repair and maintenance
programmes ensure the consistency of
our offer. The operational focus of our
teams is pivotal to our success, with
process and product improvements
driving cost efficiencies and enhancing
the guest experience.
Improve our customer journey
andonline offer
We believe we can improve certain
aspects of the online journey for our
guests with more features, pricing
options and increased levels of flexibility.
Approximately 85% of all bookings
arenow made using one of our flexible
No 1
Best value hotel chain for the
12th year running
75%
of bookings are made by
returning guests
89,000
‘Beds of the Future’ in our
hotels by the end of 2023/24
8%
of accommodation sales
in2022/23 through
BusinessBooker
pricing options that offer guests the
opportunity to amend their bookings
fora price premium. We have also
reintroduced our ‘non-flex’ rate, which
isour lowest pricing option, offering
ourguests great value.
Enhance our in-room experience
The latest iteration of our standard
Premier Inn room (ID5) is achieving
higher guest scores than previous
versions and is expected to deliver
meaningful operational savings when
itis rolled out during 2023/24. We have
also launched our ‘Bed of the Future’
with our new supplier, Silentnight, and
will replace 89,000 beds by the end of
2023/24. These improvements are in
addition to the opening of more Premier
Plus rooms and twin rooms, both of
which broaden our appeal and attract
apremium to our standard room rate.
Aswe look forward, we believe that
each of these exciting innovations will
help us to maintain our high-quality
customer proposition and stay ahead
ofthe wider market.
Further improve our proposition for
business customers
Business customers who tend to drive
higher RevPAR and travel more
frequently than leisure guests. Having
grown our Business Booker and Business
Account programmes substantially over
the past few years, we plan to drive
revenues further through website
improvements and by integrating both
programmes into a single offering for
thebenefit of users.
Grow F&B revenue
All of our UK hotels have a bar and
restaurant, either within the hotel or
located next door. Our restaurants help
drive higher RevPAR in our hotels and
generate additional revenue from
non-hotel guests. We continue to roll
out various commercial initiatives to
increase sales, including new bar
formats within our hotels as well as
newmenus and targeted marketing
initiatives in our restaurants.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
19
Grow and innovate in the UK
Premier Inn UK
1
£m FY23 FY22 FY20 vs FY22 vs FY20
STATUTORY REVENUE 2,508 1,668 2,050 50% 22%
Other income (excluding rental income)
2
5 70 14 (93)% (65)%
Operating costs before depreciation, amortisation and rent (1,595) (1,249) (1,270) (28)% (26)%
ADJUSTED EBITDAR† 918
490 794 87% 16%
Net turnover rent and rental income 1 4 2 (77)% (57)%
Depreciation: Right-of-use asset (134) (125) (103) (7)% (30)%
Depreciation and amortisation: Other (169) (169) (163) 0% (3)%
ADJUSTED OPERATING PROFIT† 617 200 529 209% 17%
Interest: Lease liability (125) (125) (115) 0% (9)%
ADJUSTED PROFIT BEFORE TAX† 492 75 414 557% 19%
PBT MARGINS† 19.6% 4.5% 20.2% 1,510bps (60)bps
ROCE† 12.9% 2.3% 11.2% 1,060bps 170bps
Premier Inn UK
1
KPIs
FY23 FY22 FY20 vs FY22 vs FY20
Number of hotels 847 841 820 1% 3%
Number of rooms 83,576 82,286 78,547 2% 6%
Committed pipeline (rooms) 7,425 8,332 13,011 (11)% (43)%
Occupancy 82.7% 68.3% 76.3% >1,000bps 640bps
Average room rate† £71.84 £56.67 £61.50 27% 17%
Revenue per available room† £59.45 £38.69 £46.91 54% 27%
Sales growth
3
:
Accommodation 37%
Food and beverage (4)%
TOTAL 22%
Like-for-like† sales
3
growth:
Accommodation 27%
Food and beverage (7)%
TOTAL 14%
1 Includes one site in each of: Guernsey and the Isle of Man and two sites in each of: Jersey and Ireland
2 FY22 includes Government support – see page 156 of the accompanying financial statements for further details
3 Total and like-for-like on a three-year basis versus FY20
UK performance vs M&E market
FY23
Q1
FY23
Q2
FY23
Q3
FY23
Q4
FY23
PI accommodation sales performance (vs FY20)
1
+25.2pp +25.6pp +25.0pp +23.9pp +26.9pp
PI occupancy performance (vs FY20)
1
10.7pp 11.6pp 10.9pp 9.9pp 10.7pp
PI ARR performance (vs FY20)
1
(2.8)pp (2.6)pp (2.7)pp (1.9)pp (3.6)pp
PI RevPAR performance (absolute)
1
£9.63 £9.90 £10.50 £9.70 £8.48
PI market share
2
8.9% 9.5% 8.8% 8.7% 8.9%
PI market share gains pp (vs FY20)
2
1.7pp 2.0pp 1.7pp 1.5pp 1.8pp
1 STR data, full inventory basis, Premier Inn accommodation revenue, occupancy, ARR and RevPAR, 4 March 2022 to 2 March 2023, M&E market excludes Premier Inn
2 STR data, revenue share of total UK market, 4 March 2022 to 2 March 2023
Whitbread Annual Report and Accounts 2022/23
20
UK performance
UK market, strategy and performance
The impact of the pandemic on the
2021/22 results meant that the 2022/23
comparative performance was stronger
than versus 2019/20. Total statutory
revenue was 22% ahead of 2019/20,
driven by the strength of our UK hotel
performance. UK accommodation sales
were 37% ahead of 2019/20, driven by a
640bps increase in occupancy and 17%
increase in average room rates as well as
the addition of over 6,000 rooms to our
estate. Factors behind our strong
performance included external drivers
such as strong consumer demand, a
reduced level of supply and a robust
pricing environment.
While these factors benefited the M&E
sector as a whole, Premier Inn remained
well-ahead of the M&E market
throughout the period thanks to the
inherent strengths of our vertically
integrated operating model, direct
distribution, market-leading position
and the execution of several
commercialinitiatives.
F&B sales were well-ahead of 2021/22,
driven by the commercial initiatives we
implemented during the year and the
market recovery following the pandemic.
Despite this recovery and the benefits of
high hotel occupancy and a number of
commercial initiatives helping to drive
F&B sales, the value pub restaurant
sector remains challenging with the
result that overall F&B sales were 4%
behind pre-pandemic levels.
Other income of £5 million related to a
provision release following the
completion of an HMRC review of the
Group’s COVID-related support claims,
for further information see page 156.
Whilst in 2021/22, other income of
£70 million included £62 million benefit
from the Coronavirus Job Retention
Scheme and £8 million benefit from
other COVID-related grants, no claims
for COVID-related Government support
were made in 2022/23.
Operating costs of £1,595 million were
28% higher than 2021/22 driven by
increased occupancy across a higher
number of rooms, higher inflation, the
absence of any benefit received in
relation to the Government’s business
rates holiday (2021/22: £56 million) and
after the benefit of our ongoing cost
efficiency programme. EBITDAR margins
recovered strongly to 37%
(2021/22: 29%) and total EBITDAR
increased to £918 million which was 16%
above pre-pandemic levels. Right-of-use
asset depreciation was £134 million and
lease liability interest was £125 million
reflecting the addition of net 1,495 more
leasehold rooms during the year. A total
of ten new hotels and an extension
added 1,722 new rooms while four hotels
totalling 432 rooms were closed as the
Group continues to optimise its estate
when suitable opportunities arise. At the
end of the year, the UK and Ireland
estate stood at 847 hotels with a total
of83,576 rooms and a committed
pipeline of 7,425 rooms.
The increase in EBITDAR meant that
adjusted profit before tax increased to
£492 million, significantly ahead of
2021/22 and 19% ahead of 2019/20.
Despite the challenge of sector-wide
inflationary pressures, pre-tax profit
margins reached 19.6% which was a
marked increase from 2021/22 and
almost back to the 20.2% achieved
in2019/20.
The strong profit performance coupled
with our disciplined approach to capital
allocation fed through into a marked
recovery in ROCE that was 12.9% for the
year, up from 2.3% in 2021/22 and 11.2%
in 2019/20
Premier Inn Manchester City (Piccadilly) – our new check-in kiosks
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
21
Investing
ingrowing
atscale
Whitbread Annual Report and Accounts 2022/23
22
Our strategy in action
Focus on our strengths
togrow in Germany
Flagship Premier Inn now
openatBerlin Alexanderplatz
In April 2022, we opened our new flagship
Premier Inn at Berlin Alexanderplatz, in the
heart of Germany’s capital city. This 403 room
hotel is the largest in our German estate and
also features Premier Plus rooms and trials of
the latest iteration of our standard room type
(ID5), as we continue to tailor our offer for
German consumers. Alexanderplatz is our third
site in Berlin and, with another two sites in the
pipeline in great locations, we are increasing
our brand presence in the city.
Charity partnership
Last year, we announced our German
charitypartnership with Children.de to helpfight
child poverty. This year our teamsin Germany
donated nearly €400,000 through arange of
fundraising activities inour hotels andin our
German Support Centre. Initiatives include our
Save the Planetcampaign, where guests staying
inourhotels for more than one night canoptto
not have their room cleaned andinstead a
donation is made ontheir behalf toChildren.de.
  Read more on pages 48 and 49
403
room hotel is thelargest
in our German estate
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
23
Strategic report
We believe the opportunity
tocreate substantial value
inGermany is significant. The
German hotel market today is
very similar to where the UK
was15-20 years ago: it is highly
fragmented, with a large
independent hotel sector and a
relatively small branded budget
hotel segment, but with a large,
prosperous economy and
significant volumes of business
and leisuretravel.
Market structure
The market is 40% larger than theUK in
terms of room nights and hasachieved
similar levels of RevPAR to the UK. Having
reopened successfully following the
pandemic at the end of April 2022, led by
strong leisure demand, the M&E market is
broadly back to pre-pandemic levels.
With a large independent sector (67%),
the market is more fragmented than the
UK. During the pandemic, whilst the
independent sector declined in the UK,
the German sector was well-supported
by the German Government. Now that
this support has ended, with rising
inflation and interest rates, we expect
that the independent sector may come
under pressure, creating further
opportunities for market share gains.
Based upon our market analysis, we
believe that the share held by
independent hotels has fallen to
approximately 67% of the total,
havingdeclined by approximately
5%ptssince pre-pandemic.
Regional dispersion drives short-stay
domestic travel
Germany is much larger than the UK and
is more regionally dispersed, with a
federalised political and industrial
structure. This greater geographic
spread, together with a larger
population drives greater demand for
short-stay, domestic travel. Germany has
both a large domestic leisure travel
market and a large business travel
market due to the number of sizeable
trade fairs and conferences which
continue to drive volumes and attract
millions of visitors each year.
Structural advantage for owner operators
Limited new capacity has been added
inthe budget sector in recent years
dueto the structure of the German
property market, with fewer property
financing structures such as Real
EstateInvestment Trusts (REITs).
Whilstasset-light operators, which have
struggled to add meaningful numbers
offranchised hotels in the budget
sector, owner operators such as Premier
Inn are better placed to acquire, lease,
convert or build new hotels and so have
been able to expand at a faster rate.
Attractive RevPAR outlook
Market RevPAR in Germany is broadly
similar to UK levels, albeit there can be
some intra-period volatility depending
upon the phasing of business and leisure
events. Prior to the pandemic, budget
branded RevPAR in Germany grew at a
compound annual growth rate of 2.3%
between 2015 and 2019 compared with
1.3% in the UK. Following the pandemic,
RevPAR is recovering back to
pre-pandemic levels, and we expect
thisto continue to grow as business
confidence recovers and economic
activity increases.
Further acquisition opportunities
Following the withdrawal of the
Government support scheme during the
pandemic, we are starting to see more
opportunities to acquire individual
assets and bolt-on M&A transactions
atgood long-term returns.
83m
population
966k
hotel rooms (3% decline in
total supply versus 2019)
1%
Premier Inn market
share of German rooms
67%
market share held by
independent hotels
12%
market share held by
branded budget hotels
234m
room nights booked in
the German market
Germany
Inbound
business
Supply by segment
(no. of rooms available per day)
9%
11%
12%
26%
34%
28%
45%
35%
Inbound
leisure
Domestic
business
Domestic
leisure
UK
Germa
ny
12%
31%
21%
24%
67%
45%
Branded
budget (inc. PI)
Branded
non-budget
Independents
UK
Market size by business vs leisure
Company data, 2022 Company data, 2022
Whitbread Annual Report and Accounts 2022/23
24
German market
German market, strategy and performance
February
Foremost hospitality
acquisition (19 hotels)
2020
2014
October
Launched Premier Inn
Germany
2016
February
Opened our first
hotel in Frankfurt
2019
September
Acom acquisition
(three hotels)
2020
December
Centro Hotel
Group acquisition
(13 hotels)
2022
August
Cohort of 18 hotels
reached profitability
2023
April
51 hotels open to
date and 37 in the
committed pipeline
July
Traded restriction
free(end of
vaccination status
dependency)
2022
April
Flagship hotel in
Germany opened –
Berlin Alexanderplatz
2022
March
completed
acquisition of five
leasehold hotels
inGermany and one
freehold in Austria
2023
Germany M&E Premier Inn sites > 12 months Total Premier Inn
Q1 FY23
€42
€35
€44
€56
€47
€57
€63
€55
€64
€40
€35
€42
Q4 FY23Q3 FY23Q2 FY23
2022/23 RevPAR performance
Germany strategy
Having now established a
meaningful presence in the
German M&E sector, our
immediate focus is on executing
the following strategic initiatives.
These will accelerate ourpathway
to becoming Germany’s number
one hotel brand and replicating
our UK success, achieving 10-14%
returns on our £1 billion of
committed capital.
Increasing our network coverage
With over 9,000 rooms open in 51
hotels, we have established a broad
national network. We will continue to
pursue an ambitious growth strategy in
Germany, both organically and through
bolt-on acquisitions. Our total open and
committed pipeline stands at 16,000
rooms and we believe there is ample
opportunity to grow further.
Building our brand
With hotels in many major towns and
cities, Premier Inn can now start to
build brand awareness. Our proposition
in Germany is similar tothat of the UK:
synonymous with a great night’s sleep,
and excellent customer service, all at an
attractive price. As we approach scale,
we can start to build a growing
customer base through digital
marketing and other promotional
campaigns and channels.
Improving our business proposition
Premier Inn already has a broad customer
reach in Germany, with asimilar customer
mix to the UK. Domestic leisure is driven
by short-stay trips and leisure events.
Business volumes continue to be
influenced by trade fairs, our Business
Booker and Business Account
programmes, as well as strengthening
ourrelationships with TMCs.
Tailoring our customer offer
We recognise the need to continue to
refine our offer for localised preferences
such as breakfast menus and payment
methods. We arealso trialling the
addition of new products, including
Premier Plus, additional pricing options
and our newstandard room format (ID5)
to helpdrivecustomer volumes.
Investing to win and refining
ouroperating model
Launching into a new territory requires
asignificant level of infrastructure
investment. Since opening our first
hotelin 2016, we have committed to
£1 billion ofcapital, made
severalacquisitions, hired experienced
management and a team of over 1,000
employees. We are continuing to apply
our learnings to refine our operating
model and driveprofitability.
Pathway to scale
Replicating our UK model in Germany
requires scale, and while we have made
good progress, we still have further to go.
The performance of our 18 established
hotels, that have been trading for more
than 12 months, has been particularly
encouraging and this cohort became
profitable† in aggregate during 2022/23.
This performance underpins our
confidence in reaching break-even on
arun-rate basis in 2024 and achieving
our long-term returns targets.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
25
Focus on our strengths to grow in Germany
Premier Inn Germany
1
£m FY23 FY22 FY20 vs FY22 vs FY20
STATUTORY REVENUE 118 35 12 234% 896%
Other income (excluding rental income)
2
0 44 0 (100)% (33)%
Operating costs before depreciation, amortisation and rent (110) (66) (24) (68)% (362)%
ADJUSTED EBITDAR† 7 14 (12) 46% 163%
Net turnover rent and rental income 0 4 1 (97)% (88)%
Depreciation: Right-of-use asset (32) (23) (1) (41)% >(1,000)%
Depreciation and amortisation: Other (11) (10) (2) (13)% (600)%
ADJUSTED OPERATING LOSS† (36) (15) (13) (133)% (168)%
Interest: Lease liability (14) (9) (0) (62)% >(1,000)%
ADJUSTED LOSS BEFORE TAX† (50) (24) (14) (108)% (265)%
Premier Inn Germany
1
KPIs
FY23 FY22 FY20 vs FY22 vsFY20
Number of hotels 51 35 6 46% 750%
Number of rooms 9,042 5,875 1,085 54% 733%
Committed pipeline (rooms) 6,907 8,454 8,709 (18)% (21)%
Occupancy 59.4% 40.7% 58.3% 1,870bps 110bps
Average room rate† £62.36 £40.53 £69.47 54% (10)%
Revenue per available room† £37.04 £16.49 £40.53 125% (9)%
Sales growth
3
:
Accommodation 924%
Food and beverage 738%
TOTAL 892%
Like-for-like† sales
3
growth:
Accommodation 32%
Food and beverage 13%
TOTAL 29%
1 Includes one site in Austria
2 FY22 includes Government support – see page 156 of the accompanying financial statements for further details
3 Total and like-for-like on a three-year basis versus FY20
Premier Inn Düsseldorf City Friedrichstadt
Whitbread Annual Report and Accounts 2022/23
26
Germany performance
German market, strategy and performance
Pandemic-related restrictions were
finally lifted during the first quarter
which prompted an uplift in leisure
demand throughout the summer
months. This continued into the third
quarter with leisure demand remaining
buoyant, supported by a high number of
leisure events, as well as a rebound in
business travel including the return of a
number of large international trade fairs.
Despite the popularity of Christmas
markets in a number of German cities,
market demand in the seasonally quiet
fourth quarter was softer than expected.
The net result was that total statutory
revenue increased by 234% versus
2021/22 and given the increase in the
size of our estate, was significantly
ahead of 2019/20.
Other income was significantly less than
last year, with no claims being made for
COVID-related Government support in
2022/23 (2021/22: £44 million).
Operating costs increased by £44 million
versus 2021/22 reflecting the continued
growth in our estate and inflationary
pressures. We made good progress on
continuing to refine our operating model
and tailor our customer proposition. We
also continued to drive cost efficiencies
without compromising our ability to
drive revenue growth. The addition of
2,706 new leasehold rooms to the estate
meant that right-of-use-asset
depreciation increased by 41% to
£32 million and lease liability interest
increased by 63% to £14 million. During
the year we opened ten hotels and
acquired six hotels including a freehold
hotel in Austria, ending the period with
51 hotels and 9,042 rooms open.
With the softer than expected market
demand in the fourth quarter, the
adjusted loss before tax of £50 million
was towards the upper end of our
previous guidance. Whilst the overall
result is heavily influenced by our pace
of opening and the fact that most of our
hotels are not yet mature, we remain
encouraged by the performance of our
cohort of 18 established hotels, which
became profitable in aggregate† during
the year.
Premier Inn Nürnberg City Nordoft
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
27
Investing in
ourfuture
Whitbread Annual Report and Accounts 2022/23
28
Enhance our capabilities to
support long-term growth
Our strategy in action
Bed of the Future
During 2022 we launched our ‘Bed of the Future’
in partnership with Silentnight. Designed with
sleep scientists to give our guests the best-ever
night’s sleep, our ‘Bed of the Future’ is our most
technologically advanced bed yet, with comfort,
durability and sustainability at the heart of the
design process. We have been through a
rigorous testing and validation process over
thelast two years, resulting in very positive
feedback from our guests. We have begun
theroll-out across our estate, with a total of
89,000 beds being replaced across the UK,
Germany and the Middle East.
89,000
‘Beds of the Future’ to be
rolled out across the UK,
Germany and the
MiddleEast
Sustainability
When designing our ‘Bed of the Future’,
sustainability was a key consideration. Our new
beds feature a zippable, removable topper
which is refreshed at the end of its life,
extending the life of our beds from six to 12
years and significantly reducing the number
ofbed disposals required each year. Our new
beds are also 92% recyclable versus our
previous bed which was 72% recyclable,
reducing the proportion of our beds going
tolandfill attheend of their life.
  Read more on pages 50 and 51
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
29
Strategic report
£
With a strong, asset-backed
balance sheet, a robust
programme of investment and
significant growth potential in
both the UK and Germany,
weremain confident in our
abilityto deliver long-term
valuefor all our stakeholders
Annual capital expenditure programme
£400-450m
UK return on capital employed†
12.9%
KPIs
Net cash†
£171m
Group freehold mix
54%
Lease adjusted net debt:
FFO†
2.7x
Cost efficiencies 2021/22
to2024/25
140m
£
£
Funding
Investment grade status ensures access tothe debtmarkets
Cost of funding remains competitive
Selective sale and leasebacks if required
Strength of
covenant
Makes us a highly attractive partner
Strong advantage in competitive situations
Favourable lease terms
Strategic and
financial
flexibility
Resilience during periods of macroeconomic uncertainty
Quick execution without external finance
Control over network planning and customer proposition
Everyday efficiency programme
Whitbread Annual Report and Accounts 2022/23
30
Long-term growth strategy and performance
Enhance our capabilities to support long-term growth
Number of UK rooms Premier Inn UK ROCE
FY21 FY22 FY23FY20FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19
(14.4)%
12.4%
10.0%
10.6%
11.7%
11.6%
11.5%
10.9%
12.3%
12.4% 12.4%
13.3%
13.5%
12.9%
13.0%
13.4%
13.3%
11.2%
12.9%
Premier Inn UK Return on Capital†
2.3%
18k
28k
30k
33k
36k
40k
42k
43k
47k
52k
55k
59k
65k
68k
72k
76k
79k 79k
82k
84k
Investing to win drives long-term
growth initiatives
Our ongoing investments in growing
ourestate, customer proposition,
technology, teamsand Force for Good
sustainability programme mean that we
can continue to strengthen our market-
leading position and drive long-term
returns. Each of these is described in
more detail below.
Estate growth andoptimisation: Wehave
identified significant potential for further
room growth both in the UK andin
Germany. This will be achieved through a
combination of new builds, conversions,
extensions as well as bolt-on M&A in
Germany. We will continue to optimise
our existing estate by disposing of
sub-scale locations where opportunities
allow and importantly where returns
canbe improved.
Customer proposition: The Premier
Innbrand is synonymous with high
quality, great value and excellent
customer service. It is therefore essential
that we continue to maintain our existing
estate to a high and consistent standard.
With over 83,500rooms and 800
restaurants inthe UK, this requires a
significant programme of refurbishments,
repairs and maintenance. We are
continuously looking for new ways
thatwe can increase choice for our
guests. Our innovative ‘hubby Premier
Inn’ hotel format, our Premier Plus room
concept and our new standardised
ID5Premier Inn room, as well as
pricingoptions forflexibility and
value,are all examples of recent
developments that have significantly
improved our customer offer.
Technology: We continue to invest
inourIT platforms and related
infrastructure, enhancing our digital
capability, and driving additional revenue
growth and cost-saving opportunities.
This year we will continue with the
upgrade to our hotel management
system inboth the UK and Germany, as
well asbegin the process of upgrading
ournetworks and HR system. These
projectsare ongoing and are expected
torelease significant operational and
financial benefits in the future.
Teams: Our 40,000 team members are
atthe heart of our operations and we
are determined to ensure that they are
engaged, well trained, well paid and
focused on delivering a great customer
experience for our guests. Our investments
in team member pay, recruitment, training,
wellbeing and rewards improve our
teamretention, and drive greater
operational efficiency.
Force for Good: Our ambitious
programme drives our ESG agenda. Our
stretching targets are fully embedded
within our business strategy and hold us
accountable for thechange we seek to
implement. Our investment in this
programme not only ensures we are
having a positive impact on our
communities, but also delivers
operational efficiencies in support of
ourlonger-term strategy.
Lean and agile cost model
supportscontinued expansion
Whitbread has a long track record of
delivering material cost efficiencies
andour teams are continuing to find
newandalternative ways of working to
drive savings through procurement and
process improvements. With heightened
inflationary pressures, these initiatives are
more important than ever, and we remain
on track to deliver £140m of planned
savings between 2021/22 and 2024/25.
Long-term growth generates
sustainable returns
The strength of our balance sheet, our
investing to win programme, vertically-
integrated operating model and our
strict approach to capitaldiscipline all
support a platform for sustained growth.
We remain focused on sustaining our
market-leading position in the UK,
progressing our plans to unlock
significant future value inGermany
aswell as delivering long-term returns
for our shareholders.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
31
Investing to win
Hemant Patel
Chief Financial Officer
Statutory revenue
Statutory revenues were up 54%
compared to 2021/22 and 27% ahead of
2019/20 driven by our continued estate
growth and the continued
outperformance by our UK hotels
ofthewider M&E market.
Adjusted EBITDAR
Other income was £5 million in 2022/23
(2021/22: £115 million), as the Group
made no claims for any COVID-related
support in the UK or in Germany
(2021/22: £114 million). Operating costs
were 30% higher than 2021/22, driven by
an increase in revenue-related variable
costs as a result of higher occupancy,
estate growth, cost inflation and no
benefit being received relating to the UK
Government’s business rates holiday
(2021/22: £56 million credit). Adjusted
EBITDAR was £888 million, up 88%
versus 2021/22 reflecting strong trading
in the UK and the lifting of pandemic-
related restrictions.
Adjusted operating profit
The leasehold estate in the UK grew by
net 1,495 rooms and in Germany by 2,706
rooms resulting in a 12% increase in
right-of-use asset depreciation charges to
£166 million. Other depreciation and
amortisation charges were in line with
2021/22. The strength of our UK trading
performance meant that adjusted
operating profit increased to £544 million,
significantly ahead of 2021/22 and 12%
ahead of 2019/20, even after increased
operating losses in Germany of £36 million
(2021/22: £15 million loss).
Net finance costs
Higher interest receivable on the Group’s
cash balances and an interest credit of
£14 million on the pension fund surplus
resulted in a net finance credit
(excluding lease liability interest) of
£9 million (2021/22: charge of
Financial highlights
£m 2022/23 2021/22 2019/20 vs 2021/22 vs 2019/20
STATUTORY REVENUE 2,625 1,703 2,072 54% 27%
Transitional service agreement revenue – – 9 0% (100)%
ADJUSTED REVENUE† 2,625 1,703 2,062 54% 27%
Other income (excluding rental income)
1
5 115 14 (96)% (65)%
Operating costs before depreciation, amortisation and rent (1,742) (1,345) (1,323) (30)% (32)%
ADJUSTED EBITDAR† 888 473 753 88% 18%
Net turnover rent and rental income 1 8 3 (87)% (66)%
Depreciation: Right-of-use asset (166) (148) (104) (12)% (59)%
Depreciation and amortisation: Other (180) (179) (165) (0)% (9)%
ADJUSTED OPERATING PROFIT† 544 153 487 255% 12%
Net finance costs (excluding lease liability interest) 9 (36) (13) (124)% (165)%
Interest: Lease liability (139) (133) (115) (4)% (20)%
ADJUSTED PROFIT/(LOSS) BEFORE TAX† 413 (16) 358 >(1,000)% 15%
Adjusting items (39) 74 (78) (152)% (51)%
STATUTORY PROFIT BEFORE TAX 375 58 280 544% 34%
Tax expense (96) (16) (62) (512)% (55)%
STATUTORY PROFIT AFTER TAX 279 43 218 556% 28%
1 Includes UK and German Government support received in 2021/22 (£nil Government support was received in 2022/23). See page 156 of the accompanying financial
statements forfurtherdetails.
Whitbread Annual Report and Accounts 2022/23
32
Financial review
Chief Financial Officer’s review
£36 million). Lease liability interest of
£139 million was marginally ahead of
2021/22 reflecting the growth in our
leasehold estate in the UK and Germany.
Adjusting items
Total adjusting items resulted in a
£39 million charge (2021/22: credit of
£74 million) and includes £33 million of
net property impairment charges
(2021/22: £36 million net impairment
credit), £14 million of technology-related
project costs, £4 million profit from
property disposals (2021/22: £33 million
credit) and other adjusting items credits
of £5 million (2021/22: £5 million credit).
Rising interest rates have driven higher
discount rates and increased levels of
impairment in both the UK and Germany.
Gross impairment losses of £46 million in
the UK impacted 13 standalone
restaurants and those sites where F&B
revenues represent a more significant
proportion of total sales. The
consequential increase in the WACC
resulted in further impairments of
£9 million which were offset by
impairment reversals of £55 million as a
number of previously impaired sites
returned to more normal levels of trading.
The result was a total net impairment
reversal of £1 million being recorded in
the UK. In Germany, the increase in
market discount rates and the pace of
our expansion resulted in a £31 million
impairment charge relating to a small
number of hotels.
During the year, the Group has assessed
the presentation of costs incurred in
relation to the current and future
implementation of strategic IT
programmes. The programmes currently
scheduled include upgrades to the
Group’s hotel management system and
HR & payroll system. These represent
significant business change costs for the
Group rather than replacements of IT
systems, with the system products being
Software as a Service (‘SaaS’). The start
date of these projects varies and as such
we expect costs to be incurred within this
category over the next few financial
years, with their strategic benefit seen as
lasting multiple years. The Group incurred
£14 million costs in 2022/23 and expects
to incur costs presented within adjusting
items across future financial years as
follows: 2023/24: £15 million to
£25 million; 2024/25: £5 million to
£15 million; and FY26: £0 million to
£5 million.
On 7 March 2022, the Group disposed of
a property in Marylebone as part of a
property transaction, receiving gross
proceeds of £46 million. A profit of
£1 million was recognised on disposal of
the property. During the period, the
Group has recorded aggregate profits on
other property disposals of £3 million.
Other adjusting items include a
settlement of £5 million in relation
toalegal claim.
Taxation
The tax charge of £85 million on the
profit before adjusting items
(2021/22: £11 million credit) represents
an effective tax rate on the profit before
adjusting items of 21% (2021/22: 68%).
This is higher than the UK statutory
corporate tax rate of 19%, primarily due
to the impact of overseas tax losses for
which no deferred tax has been
recognised, partially offset by the
impact of the super deduction tax relief.
The statutory tax charge for the period of
£96 million (2021/22: £16 million charge)
represents an effective tax rate of 26%
(2021/22: 27%). This effective tax rate is
driven by the impact of overseas losses
not yet being recognised as well as the
tax impact of certain adjusting items,
primarily relating to the effect of the
in-year UK rate differential and gains on
property disposals, partially offset by the
impact of the super deduction tax relief.
Statutory profit after tax
Statutory profit after tax for the year
was £279 million, compared to a profit
of £43 million in 2021/22, which was
impacted by COVID-related restrictions
in the UK and Germany.
Earnings per share
2022/23 2021/22 2019/20
1
vs 2021/22 vs 2019/20
Adjusted basic
earningspershare† 162.9p (2.5)p 166.3p >1,000% (2)%
Statutory basic
earningspershare 138.4p 21.1p 125.3p 556% 10%
1 Restated to include the impact of the Rights Issue completed in June 2020.
Earnings per share
Adjusted basic earnings per share of
162.9p and statutory basic earnings per
share of 138.4p reflect the adjusted and
statutory profits reported in the period
(see page 159).
Dividend
The Board has recommended a final
dividend of 49.8p per share, reflecting
the Group’s strong 2022/23
performance, its strong balance sheet,
continued momentum of current trading
and confidence in the full year outlook. If
approved by shareholders at the AGM to
be held on 22 June 2023, this would
result in a total dividend payment for the
year of £149 million and the final
dividend will be paid on 7 July 2023 to
all shareholders on the register at the
close of business on 26 May 2023.
Shareholders will be offered the option
to participate in a dividend re-
investment plan. The Group’s dividend
policy is to grow the dividend broadly in
line with earnings across the cycle. Full
details are set out in page 160 to the
accompanying financial statements.
Events After the Balance SheetDate
The Board of Directors approved a
share buy-back on 24 April 2023 for
£300 million and is in the process of
appointing the relevant brokers to
undertake the programme in
accordance with that approval.
Pension
The Group’s defined benefit pension
scheme, the Whitbread Group Pension
Fund (the ‘Pension Fund’), had an IAS19
Employee Benefits surplus of £325 million
at the end of the year
(2021/22: £523 million). The lower
funding position was primarily driven by
asset performance being lower than the
discount rate and the remeasurement
effect of entering into a pensioner buy-in
contract. This was partially offset by a
decrease in the assumed rates of future
inflation and an increase in corporate
bond yields resulting in an increase in the
discount rate and changes to the
mortality assumptions which reduced the
value of the pension obligations.
During the year, the Pension Fund
became fully funded on the Secondary
Funding Target basis, following which
the Trustee has reduced the investment
risk in line with the de-risking journey
agreed between the Trustee and
Whitbread. There has been further risk
reduction as a result of the Trustee
entering into a £661 million buy-in with
Standard Life. There are currently no
deficit reduction contributions being
paid to the Pension Fund, however
annual contributions of approximately
£10 million continue to be paid to the
Fund through the Scottish Partnership
arrangements. The Trustee holds
security over £532 million of Whitbread’s
freehold property which will remain at
this level until no further obligations are
due under the Scottish Partnership
arrangements, which is expected to be
in 2025. Following that, the security held
by the Trustee will be the lower of:
£500 million; and 120% of the buy-out
deficit and will remain in place until
there is no longer a buy-out deficit.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
33
Debt funding facilities and liquidity
£m Facility Utilised Maturity
Revolving credit facility (775) – 2027
Bond (450) (450) 2025
Green Bond (300) (300) 2027
Green Bond (250) (250) 2031
(1,775) (1,000)
Cash and cash equivalents 1,165
TOTAL FACILITIES UTILISED, NET OF CASH
1
165
NET CASH† 171
NET CASH AND LEASE LIABILITIES† (3,787)
1 Excludes unamortised fees associated with debt instrument.
Cashflow
Adjusted EBITDAR increased by 88% to
£888 million (2021/22: £473 million),
driven by the strength of the trading
performance of Premier Inn UK, resulting
in an adjusted operating cashflow of
£719 million (2021/22: £404 million).
Expansionary and maintenance capital
expenditure increased to £546 million in
2022/23 (2021/22: £261 million) resulting
in total cashflow before shareholder
returns and debt repayments of
£182 million broadly in line with last year
(2021/22: £187 million).
The £99 million working capital inflow
was driven by an increase in trade
creditors, accruals and customer
deposits as a result of the strong trading
performance. This was partially offset by
an increase in debtors driven by an
increase in the volume of Business
Accounts and accrued income relating
to property disposals.
Corporate tax outflows of £30 million
relate to payments on account for the
2022/23 UK corporation tax liability.
Non-expansionary capital expenditure
was £184 million and expansionary
capital expenditure was £362 million
which included the purchase of three
freehold properties. Lease liability
interest and lease repayments increased
by £11 million to £269 million reflecting
the increase in our leasehold estate.
Other items include an inflow of
£4 million (2021/22: £3 million) of
non-cash pension scheme administration
costs. Disposal proceeds of £60 million
include £46 million relating to a property
transaction in Marylebone and the
disposal of other properties as the
Group continues to optimise its estate
when suitable opportunities arise.
Following the recommencement of
dividend payments at the 2021/22
results, the Board recommended a final
dividend of 34.7 pence per share on
27 April 2022. This resulted in a dividend
payment of £70 million paid on 1 July
2022. At the interim results in October
2022, the Board declared an interim
dividend of 24.4 pence per share,
resulting in a £49 million total interim
dividend payment. During the year,
Cash flow
£m 2022/23 2021/22
ADJUSTED EBITDAR† 888 473
Change in working capital 99 183
Net turnover rent and rental income 1 8
Lease viability and principal lease payments (269) (258)
ADJUSTED OPERATING CASH FLOW† 719 404
Interest (excluding IFRS 16) (9) (18)
Corporate taxes (30) (0)
Pension (16) (15)
Capital expenditure: non-expansionary (184) (94)
Capital expenditure: expansionary
1
(362) (168)
Disposal proceeds 60 56
Other 4 20
CASH FLOW BEFORE SHAREHOLDER RETURNS AND DEBT REPAYMENTS 182 187
Dividend (119) –
Shares purchased for Employee Share Ownership Trust (‘ESOT’) (32) –
Replacement of long-term borrowings – (304)
NET CASHFLOW 31 (117)
Opening net cash/(debt)† 141 (47)
Issuance of debt – 304
CLOSING NET CASH† 171 141
1 2022/23 includes £2m loans advanced to joint ventures and £25m payment of contingent consideration (2021/22 includes £2m loans advanced to joint ventures, £36m
payment of contingent consideration and £1m capital contributions to joint ventures).
Whitbread Annual Report and Accounts 2022/23
34
Financial review continued
Chief Financial Officer’s review
1.3 million shares were purchased by the
Group’s independently managed
Employee Share Ownership Trust
(‘ESOT’) for consideration of £32 million.
Net cash at the end of the period
was£171 million.
Debt funding facilities and liquidity
The Group received confirmation of its
investment grade status on 20 February
2023 and aims to manage to investment
grade metrics of lease adjusted net debt
of less than 3.7x
1
funds from operations†
over the medium term. During the first
half, the Group returned to below this
level and as at the end of 2022/23 the
ratiowas 2.7x.
Revolving credit facility
During the first half of 2022/23, the
Group entered into a new £775 million
revolving credit facility (‘RCF’), replacing
the previous £850 million facility that was
due to expire in September 2023. The
new five-year facility, with two one-year
extension options, is a multi-currency
revolving credit facility and is provided
by a syndicate of seven banks led by
Banco Santander, Barclays, NatWest and
Bank of China. The RCF has variable
interest rates with GBP linked to SONIA
and EUR being linked to EURIBOR.
Going concern
The directors have concluded that it is
appropriate for the consolidated
financial statements to be prepared on
the going concern basis. Full details are
set out on page 138 of the attached
financial statements.
Hemant Patel
Chief Financial Officer
24 April 2023
1 Fitch methodology post-IFRS 16
Capital investment
£m 2022/23 2021/22
UK maintenance and product improvement 182 91
New/extended UK hotels
1
265 80
Germany and Middle East
2
99 90
TOTAL 546 261
1 FY23 includes £2m and FY22 includes £2m loans advanced to joint ventures
2 FY23 includes £25m payment of contingent consideration, FY22 includes £36m payment of contingent
consideration and £1m capital contributions to joint ventures
Total capital expenditure in 2022/23 was £546 million driven by the development of
new sites and extensions in the UK including freehold purchases in London and
Dublin. UK maintenance and product improvement spend was focused on investing
in the refurbishment programme of our core UK estate, a number of transformational
technology projects and the roll-out of our new bed proposition. In Germany, capital
expenditure of £99 million was driven by the development of our committed
pipeline in addition to the acquisition of six hotels made at the end of 2022/23.
Property, plant and equipment of £4,554 million was ahead of 2021/22
(£4,227 million), with an increase in capital expenditure partially offset by
depreciation charges.
Property backed balance sheet
Freehold/leasehold mix Open estate Total estate
1
Premier Inn UK 57%:43% 55%:45%
Premier Inn Germany 22%:78% 23%:77%
Group 54%:46% 51%:49%
1 Open plus committed pipeline
The current UK estate is 57% freehold and 43% leasehold and once the committed
pipeline has been constructed the estate will be 55% freehold and 45% leasehold.
The higher leasehold mix in Germany reflects the greater proportion of city
centrelocations.
Our continued expansion in the UK and Germany resulted in right-of-use assets
increasing to £3,505 million (2021/22: £3,268 million) and lease liabilities increasing
to £3,958 million (2021/22: £3,702 million).
Return on capital1 – Premier Inn UK
Returns 2022/23 2021/22 2019/20
UK ROCE† 12.9% 2.3% 11.2%
1 Germany ROCE not included as losses were incurred in the year
Return on capital
We remain confident in being able to deliver long-term sustainable returns on
incremental investment. We believe that our vertically integrated business model
means we are particularly well-placed to capitalise on the significant structural
opportunities in both the UK and Germany. Despite ongoing inflationary pressures,
we believe that such headwinds can be mitigated through a combination of
continued estate growth, our long-standing efficiency programme and our ability to
drive ARRs through improvements to our proprietary pricing engine and the
continuous evolution of our product.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
35
Rachel Howarth
Chief People Officer
We believe in giving everyone the
opportunity to grow, develop and
be their best with no barriers to
entry and no limits to ambition.
At the heart of our business are our
people, who are passionate and proud to
deliver amazing guest experiences every
day. We see reflected in our continued
market leading guest scores across the
UK and Germany. The highest rated
questions in our guest surveys are all
about our teams – friendliness, service,
and warmth of welcome – and this fills
me with pride as it showcases our
special culture here at Whitbread.
Our exceptional trading year would not
have been possible without the
fantastic contribution of our team of
over 40,000 people.
Economically it has been a tough year
within the UK and Germany, with rising
inflation and cost-of-living challenges
impacting our teams. It has been an
important part of this year’s ‘People
strategy’ to support our teams
financially, and we have made significant
investments in our teams this year –
investment in our teams this year in pay,
reward and cost-of-living payments, in
addition to investments in personal
development, career growth
andwellbeing.
I am really pleased to see our continued
progress on inclusivity and diversity,
demonstrating that Whitbread is truly a
place where everyone is welcome. I also
believe that Whitbread is the best place in
hospitality to grow your career. Our focus
on career growth and development
continues to be demonstrated through
the 64% of our managers in Operations
who were internally promoted into the
role this year.
Our special culture has been recognised
through our ‘Top Employer’ award from
the Top Employers Institute – incredibly
for the 13th consecutive year. This is an
amazing milestone. It is testament to our
commitment to create an exceptional
working experience and environment for
our people, as well as future talent
joining our business.
As we move forwards, it is an exciting
time to be part of Whitbread. Combining
our long heritage, our culture and our
values with our ongoing investment into
our teams, technology and estate, to
drive our three business priorities, we
can continue to ensure there are no
barriers to entry and no limits to
ambition for our teams.
40,000
people who work
for Whitbread
Whitbread Annual Report and Accounts 2022/23
36
Investing in our teams
Chief People Officer’s review
We have made good progress
againstour Diversity and Inclusion
(D&I)commitments
This is an area of particular importance
to me and I am proud to be part of a
business that truly cares about being
diverse and inclusive.
It is really pleasing to see how our
internal efforts to drive progress are
making a real difference to our teams
and guests. Our Diversity and Inclusion
commitments continue to be the core of
our strategy and it is pleasing to see
how they are becoming embedded
across our People strategy.
Our progress has been recognised
externally in recent months:
• Top 100 status in the Stonewall
Workplace Equality Index (number
53), alongside a Gold Award and 1st in
the Hospitality Sector;
• Ranked 7th in the FTSE Women
Leaders index, for our female
representation in Executive
Committee/Direct Reports;
• Diversity Leader in the 2023 Financial
Times Diversity Leaders Index; and
• Top 25 Advanced Employer in the
Investing in Ethnicity Awards.
We are on track to meet our 2023
leadership targets for both gender and
ethnicity. This has been a consistent
focus for all our leaders over the past
three years. We continue to drive
progress through a combination of our
recruitment strategy alongside the
fantastic work our inclusion networks
continue to do to drive greater
inclusionof our minority communities
across Whitbread.
Investing in our teams’ pay,
rewardandbenefits
There has not been a time in recent
history where financial wellbeing has
been more important and we take our
responsibility to our teams very seriously.
We have made a significant investment in
pay and reward this year, as we continue
to navigate a challenging labour market
in both the UK and Germany.
In UK Operations, we have made a
significant investment this year in our
hourly and salaried paid teams,
recognising the exceptional cost-of-
living situation facing our entry level
employees. The majority of this
investment, totalling £28 million
(£46 million annualised) has been to our
entry level team members, where we
have increased minimum pay rates by
6.4% in the last 12 months, as well as
making a one-off cost-of-living payment
in November 2022. This includes
£4 million in year investment in our
‘Hotspot’ pay model, which gives us
flexibility with targeted reward for
critical roles and exceptional local
market conditions.
We recognise the importance of capable
managers that contribute to exceptional
business performance. Our salaried
managers received a pay increase, with
a core award of 3%, in May 2022. We
also had a strong level of payout on the
annual incentive scheme and our entry
level team members received a further
increase in November 2022.
In Germany, we have invested over
€5 million in pay awards, incentive
payments and aspecial annual payment
in November for all eligible Germany
team members, overand above the
regional tariffagreements.
On top of this extensive pay investment,
we have launched a series of financial
education modules and face-to-face
sessions to support our teams in
Operations and our Support Centre in the
current climate. Recently, we have
announced our Shariah pension fund
investment, ensuring we have the most
relevant pension offer for our diverse
communities that work across Whitbread.
In addition, over £140,000 in hardship
grants has been awarded to Whitbread
employees, through our partnership
with Hospitality Action. We are proud
to be continuing with this offer for our
teams when and if they need further
financial support.
Our commitments to
greaterdiversity:
• Have greater diversity in our
leadership community, with a
target of 8% ethnic minority and
40% female representation by
the end of 2023, stretching to
45% female representation and
10% ethnic minorities by the
endof 2026;
• Have targets for greater ethnic
diversity in our middle
management population through
stringent recruitment practices
that mitigate individual biases;
• Invest more in a diverse talent
pipeline to ensure we can
promote diverse talent
equitably; and
• Get better data and insight
tounderstand individual
experiencesfurther.
Our commitments to
greaterinclusion:
• Equip our teams to be fluent
around diversity and inclusion,
through mandated development
andhaving anaccessible D&I
hub;
• Amplify the voices of all our
minorities, through the sponsorship
of networks andforums;
• Review our policies and
practices to make sure they are
inclusive of minority groups; and
• Celebrate key events throughout
theyear.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
37
It is an exciting time to be part
ofWhitbread. Combining our long
heritage, our culture and our values
with our ongoing investment into our
teams, there are no barriers to entry
and no limits to ambition.
Investing in our Operations
ResourcingModel
This year the UK labour market has
noticeably tightened, which continues
tomake recruitment more challenging,
particularly as we have seen a progressive
reduction in the EU migrant labour pool.
In response, we have invested and
transformed our UK Operations
Resourcing Model. Through a new
centralised team we have reduced our
time to hire by 50% and increased
applications per vacancy by 60%. The
transformation has, most importantly,
streamlined processes that give our
candidates a better experience of
applying to Whitbread, as well as
making it easier for our hiring managers.
Being a force for good within the
communities we serve, through creating
job opportunities, has been an area of
focus this year. Our partnerships include
the following:
• Ongoing relationships with
Jobcentre Plus and the Department
for Work & Pensions;
• Restarting the use of sector-based work
academy programmes in partnership
with organisations like Shaw Trust. We
have successfully hired over 50 people
who were previously long-term
unemployed through this relationship;
• Working closely with the local councils,
focusing on hiring from the local
communities. For our new Premier Inn
in Canary Wharf, we worked with the
local borough and utilised their
programme to encourage working
parents back into employment;
• Building new relationships with schools
and colleges, with each of our regions
now having an aligned secondary school
and college through which to facilitate
work experience programmes and
encourage part-time working alongside
studies to build transferable skills; and
• Piloting partnerships with
organisations supporting
disadvantaged young people. In
Nottinghamshire, we worked with the
council to offer work experience and
employability skills to care givers.
In Germany, we have increased the
number of hotels to 51 and now have
1,300 people working in our German
business. We have focused time and
effort this year on increasing our
employer brand within hospitality,
through job fairs by launching social
media campaigns.
Gender
1
Women
25,123 64.9%
Men
13,600 35.1%
All employees
Women
1 14.3%
Men
6 85.7%
Executive Committee
Women
36 40.4%
Men
53 59.6%
Leadership community
Black
4.1%
Asian
6.6%
Mixed ethnic
4.6%
White
75.3%
All employees
3
Ethnic
minorities
14.3%
White
71.4%
Executive Committee
Ethnic
minorities
6.7%
Leadership community
White
88.8%
Ethnicity
2
Fast Track Chef
Programme
The recruitment market for
experienced kitchen team
members in the UK continues to
be challenging. Whilst we have a
plentiful source of applicants,
many have no experience.
A new programme was piloted this
year to address this challenge,
taking new kitchen team members
with no experience and giving
them the skills to become a chef
within 20 days, by providing them
with intensive training at one of
our local Chef Skills Academies.
This was piloted across three sites
in the UK, with 18 recruits who
started in July 2022. 16 of these
graduated the programme and
themajority remain with
Whitbreadtoday.
Creating stable and engaged teams,
that work together to serve our guests
Across the last year, we have given a
warm Whitbread welcome to c.24,000
new team members across the UK, and
c.900 new team members in Germany.
Our warm welcome includes a
comprehensive training programme
thatgives new team members the
skillsto do their job.
A stable team in our hotels and
restaurants leads to a better guest
experience and retaining our teams is
anarea in which we lead within the
hospitality, travel and leisure sector.
Whilst this is reassuring, we still want it
to be even better, particularly as the
labour market in the UK and Germany
remains competitive. We recognise the
increasing levels of choice for our team
members, particularly in certain
geographies, and we want to continue
tooffer our teams great reasons to
staywith us.
Because of the importance of retention,
this year weconducted detailed research
to understand the key reasons our teams
stay with us. As a result ofthisresearch,
we now know that relationships with line
managers, having a great experience as a
new starter, consistency of hours and
1 As an inclusive organisation, we recognise all
gender identities and understand that not all our
team members will identify as male or female.
2 The information provided is discretionary, and not
all members of the Executive Committee and
Leadership community have chosen to share their
ethnicity with us.
3 90.5% of our team members have chosen to share
their ethnicity with us.
Whitbread Annual Report and Accounts 2022/23
38
Investing in our teams continued
Chief People Officer’s review
Our apprenticeship
programmes
Our apprenticeship programmes
have helped us to be recognised by
The Department of Education as a
Top 100 Employer (ranked at
number 30), and rated no 1 in
Hospitality on the review website
Rate MyApprenticeship, and we
have been awarded the Multicultural
Apprentice award in Retail,
Hospitality and Tourism.
We continue to offer
apprenticeships across our Premier
Inns and restaurants from entry
level to level 5, with over 1,500
team members on a programme
and an increasing number in our
Support Centre. This enables our
people to increase their technical
knowledge and gain a qualification
to recognise their skills.
With our ‘no barriers to entry’
approach and tailored support for
our apprentices, our apprenticeship
scheme is a great talent pipeline,
and we see a higher level of
retentionofteam members who
complete apprenticeships.
opportunities to progress are important.
We now have a targeted plan to address
these key drivers.
To recognise our long-service heroes,
wehave re-launched our long-service
scheme, ‘Whitbread Heroes’, this year,
with a £700k investment in a greater
number of service milestones, and a
flexible scheme that allows managers
topersonalise the recognition for their
team. Our teams love the Whitbread
Heroes scheme, and in the last year we
have recognised 15,000 people (from
1year to 40 years’ service).
Our teams’ intention to stay continues to
be indicated through our engagement
surveys across the UK and Germany. Our
team engagement levels remain very
high, which is really pleasing. Traditional
areas of cultural strength that we have
seen through our listening – pride in the
organisation and the belief that we work
together to serve our guests – remain
very strong. Through our comprehensive
listening programmes, we are confident
that we have a strong ‘voice of the
colleague’ around key areas of employee
experience and retention.
We have now aligned our pulse survey
content and timings across UK
Operations, UK Support Centre and
Germany, giving us a Company-wide
view of engagement and clarity around
action plans. Our Employee Forum,
‘OurVoice’ representatives continue
toconnect senior leaders with the front
line of the business for two-way
conversations about the business.
Investing in growing &
developingcareers
One of the things that makes hospitality
such a brilliant sector to be part of is that
our teams can join at an entry level, and
have the opportunity to grow their
careers over a number of years, acquiring
skills and development along the way. We
do this through rigorous induction
training at entry level, followed by
development pathways across all levels
(front line through to director) with a
range of apprenticeships, development
programmes and self-directed
development available. This has resulted
in 64% of our managers in Operations
being recruited internally this year.
This year we have re-energised our
development programmes, recognising
the changing needs of our teams, and
have invested in our Operational leaders.
58 of our Regional Managers and
Operations Directors have been part of
an externally led leadership development
programme, which aims to develop our
leaders to lead high-performing teams,
reinforcing our values-based culture to
deliver our business objectives.
We also recognise the need to further
equip our site-based leaders and 630 of
our Hotel Managers and General
Managers have started their own
12-month leadership development
journey. Over the next 18 months, all our
UK-based Hotel Managers and General
Managers will participate in this.
In Germany we are committed to
becoming a leading employer in our
local regions As part of this effort, we
have launched a bespoke leadership
development programme to foster the
growth of our in-house talent and
prepare junior hotel managers for
success. The programme has been
created through a collaborative effort
involving our operations, people team,
and learning and development teams,
and includes a mentoring component
toprovide comprehensive support.
Thenine-month programme includes
modules on leadership, self-awareness,
coaching, and building teams. We take
our commitment to talent development
seriously and believe that this
programme will help us attract and
retain the best talent in the industry.
In our Support Centre teams, we
continue to offer a range of learning
opportunities, both face-to-face and
online. At our most senior levels, we
have started to work with Ashridge
Business School to provide high-quality
executive education for our high-
potential leaders and future leaders,
with programmes including a wide
range of strategy, leadership and
personal development.
Investing in our teams’ wellbeing
Helping our teams to be their best,
through a focus on wellbeing, is
important in all our people activity.
Afocus on the physical, mental and
financial wellbeing of our teams through
a mixture of education, support and
communication throughout the year
isanother area of investment.
Helping our teams understand the
importance of their own wellbeing, and
how to support those around them, has
been a focus this year, as well as support
with financial assistance and from a new
occupational health provider. It is
pleasing that over 2,000 of our salaried
managers have completed online
modules in wellbeing and supporting
their teams. We have extended our
Mental Health First Aider programme
and now have 121 active Mental Health
First Aiders across Operations and
Support Centre.
In Germany, we have placed similar
importance on the wellbeing of our
teams, through a focus on mental health,
in conjunction with our health insurance
provider. We carried out a comprehensive
survey followed by workshops.
There is more information on wellbeing,
along with further detail on diversity and
inclusion and training and development,
inour 2023 ESG report.
Rachel Howarth
Chief People Officer
24 April 2023
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
39
Our four inclusion networks are now well
established across Whitbread, which is pleasing
progress over the last 12 months. Theyhave two
keypurposes:
• to provide a safe space for our minority
communities, along with allies; and
Our mission is to be an inclusive
hospitality business for people living
with hidden and/or visible disabilities
by striving to remove the barriers to
access for our colleagues and guests.
Executive Sponsors:
Mark Anderson, MD of Property &
International
Simon Ewins, MD of UK Hotels
andRestaurants
Chairs:
Matthew Yates, General Counsel
(PI&Restaurants)
Tracey Bishop, Regional
OperationsManager
Highlights of the year:
• Launch of workplace adjustments
policy to our teams
• Launch of Hidden Disability
Sunflowers across Whitbread
• Signed up to Disability Confident
level 1 and working towards level 2
• Launched a new learning module,
‘Supporting Guests with Disabilities’
• In partnership with Hereward College,
started our first internship cohort,
supporting young people with
disabilities to find meaningful
employment
Our aim is to create an environment
where, whatever your gender identity,
we have consistency in equality
ofrepresentation, reward and
opportunity. We welcome women,
men and those who are gender
diverse or use another term.
Executive Sponsors:
Rachel Howarth, Chief People Officer
Hemant Patel, Chief Financial Officer
Chairs:
Sally King, Head of Internal Audit
Nathan Battle, HR Business Partner
Highlights of the year:
• Celebrated International Women’sDay,
International Men’s Day and World
Menopause Day with our teams
• GEN Superheroes Awards showcasing
amazing individuals who have driven
gender diversity in Whitbread
• Committed to becoming a Menopause
Friendly Employer and progressing
towards accreditation; with Support
Groups established across UK
Operations and Support Centre; and
training delivered to our internal
Menopause Champions
• Updated family related guidance and
policies to be more inclusive and our
parenthood buddy scheme launched
across the UK Support Centre.
• A focus internally on the following
three areas: flexibility, family friendly
and gender-related health
• to drive greater inclusion in Whitbread –
through listening groups, celebration of events
and taking anactive part in delivering training.
They are also regularly used across our
business to consult on business initiatives,
ensuring we are inclusive of our minority
communities in our approach. Over the last
year, they have been part of the design of the
Whitbread Celebrates awards event, our
Support Centre re-design, discussions around
uniform and work on our values.
Whitbread Annual Report and Accounts 2022/23
40
Our inclusion networks
Whitbread inclusion networks
GLOW is our LGBTQ+ network,
committed to creating an
environment at Whitbread
where,regardless of your sexual
orientationand gender identity,
youcan bring your best self to
work,through focusing on our
working practices. We recognise
andwelcome people of all sexual
orientations and gender identities.
Executive Sponsor:
Chris Vaughan, General Counsel
Chairs:
Katie Birchall, HR Business Partner
Matthew Case, PI&R
CentralOperations
Highlights of the year:
• Celebrated Pride month with our sites
• Attended Manchester Pride march,
ourfirst Pride event post-COVID
• Completed the Stonewall
WorkplaceEquality Index
Submission– and wereawarded
aGold Award for Excellence,
1stinsector and a Top 100
(no53)ranking
• Celebrated events across the year
such as LGBTQ+ History Month,
TransDay of Visibility, Trans
Awareness Week and International
Non-Binary People’s Day
• Launched the ‘We all need to be seen’
campaign, allowing our teams to
sharetheir gender identity and
sexualorientation on our HR system
inaconfidential way
Our mission is to ensure that
everyoneat Whitbread, regardless
oftheir race, religion or cultural
heritage, feels free to be their
authentic self.
Executive Sponsors:
Nigel Jones, Group
OperationsDirector
Simon Jones, MD forPremier Inn
&Restaurants, UK andGlobal
Commercial Director
Chairs:
Arash Kang, Commercial Counsel
Yasmin Mukhida, Head of
BrandMarketing
Highlights of the year:
• Led a UK-wide listening programme,
alongside our partners INvolve, to
understand more about ourBlack
colleague experience and how we can
improve it. Learnings fromthis were
translated into an action plan which
the network workedalongside the
Centre of Excellence on delivering
• Celebrated numerous religious and
cultural events with the Whitbread
communities, including Eid al-Fitr,
Diwali, Race Equality Week and
BlackHistory Month
• Achieved Top 25 ranking and
Advanced Employer status in
theInvesting in Ethnicity index,
duetomuch of the hard work
andactivity led by the network
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
41
Strategic report
Whitbread Annual Report and Accounts 2022/23
42
Force for
Good
What is Force forGood?
Force for Good brings together our approach
to environmental, social andgovernance issues
and it is at theheartof our business.
We focus on our three pillars, Opportunity,
Community and Responsibility, which helpsus
to drive meaningful change acrossa broad
spectrum of topics.
It is about enabling people to live and workwell
as we strive to ensure we have apositive
impact on the environment, andon the many
people and communities our business touches.
Scan below to find out more about our
Forcefor Good programme inour ESG report
Opportunity
79%
of our UK Support Centre
wouldrecommend Whitbread
asaplaceto work
Responsibility
52.5%
reduction in carbon emissions
intensity from base year
Community
£1.9million
raised for Great Ormond StreetHospital
Children’s Charity
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
43
Strategic report
Chris Vaughan
General Counsel
new targets and, of course, ensuring that
sustainability is embedded in teams and
processes across the business. Force for
Good is a vital investment, in the future
of the business, in our people and, of
course, the planet.
Looking back over the year, there are a
host of achievements and milestones to
be proud of. We have focused on
delivering against some of our core
targets and we are tracking well. We
have reduced our carbon emissions
intensity by 52.5% against our baseline
year, reduced food waste by 12%, are
making good progress on our diversity
and inclusion targets, and have set new
targets on water reduction. We have
also completed our annual materiality
assessment, and I am pleased to say
that this has confirmed that our Force
for Good programme is covering the
areas which are the most material to us
as a business. So I am not expecting
fundamental change next year on the
breadth or focus of the programme.
As a hospitality business, we are all
about people, and looking after our
teammembers is one of our top
priorities. In a cost-of-living crisis,
making sure that our teams are properly
looked after has been critical. Over the
year, we have made significant
investment in team reward, including
increasing minimum pay rates, making
one-off cost-of-living payments and
investing in our hotspot pay model, with
targeted reward for critical roles and
geographical areas.
As ever this year, the only thing
that is constant is change. With
the war in Ukraine impacting the
price of gas, continued challenges
across our supply chain and the
cost-of-living crisis, we have had
to re-focus our priorities against
an ever-changing landscape,
while at the same time pushing
forward with our core Force for
Good targets, which we know are
material to our business.
This year we have also really seen the
impacts of climate change starting
tomanifest. We experienced record
temperatures in the UK and across
Europe, which impacted harvests
andfood availability, and we had the
devastating floods in Pakistan impacting
crops and livelihoods. Climate change is
all around us and clearly part of the new
normal. COP27 and COP15 continued
tobring issues around climate and
biodiversity to the forefront, while new
regulation and reporting requirements
on a host of ESG issues ensures that
businesses are being heldto account
likenever before.
At Whitbread, we are determined to
ensure that we play our part in
addressing these issues and managing
our environmental and social impact.
Wehave been working hard on our
Force for Good strategy for over ten
years now; making good progress
against our existing targets, delivering
Whitbread has always had a brilliant
programme of charitable fundraising.
We raised over £680,000 for the
Disaster Emergency Committee (DEC),
to help support those displaced by the
war in Ukraine. This was a result of a
three-month, matched fundraising
period atthe beginning of the year and
it washumbling to see the enthusiasm
andcommitment with which team
members and guests took up the
challenge to support those impacted
bythe continued conflict. Following
thissupport for DEC, and an all-
Company vote, we were delighted to
announce the renewal of our charity
partnership with Great Ormond Street
Hospital Charity (GOSH Charity). We
have now raised £21.9 million for GOSH
Charity since 2012 and have committed
to raise £3 million a year over the next
five years. The money raised will help
build a new Children’s Cancer Centre.
Once again this year, we have been
recognised by Stonewall for our work on
diversity and inclusion, receiving a Gold
award again, and it is pleasing to see
thatwe have climbed up the rankings,
going from 110 to 53, which is a great
achievement from all around the
business. We have also retained our Top
Employer recognition from the global
certification company, the Top
Employers Institute for the 13th year
running.
Whitbread Annual Report and Accounts 2022/23
44
Sustainability is at the core
of what we do
Force for Good
This time last year we committed to
submitting our carbon reduction targets
for validation by SBTi. Our targets have
been submitted and are currently
undergoing rigorous scrutiny. As we are
seeking validation across all three
Scopes and for short-term and net zero
targets, we are still in the process of
gaining full approval. However, we are
confident we will receive this in the first
half of 2023/24. In the meantime we are
still working hard to reduce our
emissions and areexcited to publish our
Transition Planin line with this report,
ablueprint of how we will reduce our
emissions inthe short, medium and
long-term tomeet our targets.
Work has already begun on this
pathway,with our first gas-free hotel in
Swindon opening next year, andtrials
underway to retrofit some of our existing
properties. We have been trialling the use
of air source heat pumps in around 40
hotels which are powered by renewable
electricity, to replace aging gas boilers
which provide heat and hot water in our
hotels. We are also measuring
thefinancial and economic benefit of
investing in energy efficient systems and
processes – where environmental and
economic benefits come together is
where we see the most powerful impact
for our strategy. Programmes are also in
place across the business to support our
Scope 3 targets, a key source of our
overall emissions. The move to net zero
will impact every part of our business and
the Transition Plan lays out the challenge,
and opportunities, that lie ahead.
We have also made good progress
against two key areas on the
environmental side,biodiversity and
water. Biodiversity appeared last year as
an issue on our materiality matrix and is
fast becoming akey topic for businesses,
driven not only by increased awareness
about its role in fighting climate change,
but also by upcoming legislation,
increasing shareholder interest, and the
value it canprovide from a guest
perspective. AtWhitbread, we own over
150 gardens as well as untold
hedgerows, carparks, green roofs and
other unused green areas, and we know
we can have a largeimpact in this space.
We have spent thisyear undertaking a
study ofour impacts and dependencies
on biodiversity, building a biodiversity
baseline and analysing risks and
opportunities. We will use this analysis to
set the ground work to allow us to set a
‘Nature Positive’ target in the coming
financial year. Work has already begun
tobring this to life, and we are excited
about continuing this into the new year.
We have long been working hard to
reduce our water use, implementing
water stewardship programmes across
sites in areas of high water stress and
updating equipment where needed.
Themajority of our water use is in
ourhotels, through the use of showers
and baths. At the moment, most of
ourhotels still rely on gas to heat this
water, so reducing the amount we use
will also reduce the amount of carbon
we emit through our gas boilers. This
year we have set new targets to reduce
water use by 20% per sleeper by 2030
against a 2019 baseline and our targeted
approach will ensure we continue to
reduce water usein the regions where
we can have the most impact, and
ensure we holdourselves to account for
our use ofthis important resource.
All of this work is underpinned by our
governance and reporting mechanisms,
ensuring we are doing business the right
way and have the right systems in place
to hold us to account. We are currently
working internally to define a carbon
price and the mechanisms with which
we can embed carbon to help us
understand the environmental cost, as
well as the monetary cost, of our
business decisions. We are also pleased
this year to retain our AA rating with
MSCI, CDP B ratings for climate and
water,and to be included in the
DowJones Sustainability Index
forEurope and Worldwide.
This year once again, we have published
our full ESG report, where you can find
details on all our progress against the
Force for Good strategy. This report
sitsalongside our full Transition Plan
tonet zero, our Task Force on Climate-
related Financial Disclosures (TCFD)
Report, our Modern Slavery Statement
and our Green Bond Allocation Report,
and includes our SASBreport. These
reports really do bring together a
snapshot of the huge amount of work
that goes on at Whitbread to bring Force
for Good tolife, and I want to thank every
one of our colleagues, team members,
suppliers and industry partners who work
so hard to make it all happen.
Looking forward, I expect this
yeartobeanother year of focus on
thedelivery against our stretching
targetsand seeing our actions
delivermeaningful change. We have
thetools and teams in place to ramp up
our activity and to really drive progress
across so many areas. Force for Good is,
fundamentally, the right thing to do, but
it is also an investment – in our teams,
inthe communities that we work in,
inthe environment and in the future
ofour business.
Chris Vaughan
General Counsel
24 April 2023
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
45
A team where everyone can reach their potential with
no barriers to entry and no limitations to ambition.
Opportunity
Opportunity commitment Related targets Progress against targets in 2022/23*
We will be for everyone,
championing inclusivity
anddriving diversity
To have greater diversity in our
leadership community
1
, with a target
of40% female representation and
8%ethnicminority representation
bytheendof2023
Female representation:
40.4%
Ethnic minority (Asian, Black and mixed ethnicity):
6.7%
Through our apprenticeship
programmes, we will
support our people to find
and develop their
hospitalitycareers
Number of completed apprenticeships
in2022/23
237
apprenticeships completed this year
We aim to promote internal
succession above external
recruitment and will support
our teams in this endeavour
Percentage of internal promotions within
salaried operations management team
64%
internal progression (UK only)
We will listen genuinely to
our teams, ensuring that
their views help inform
decision making
Shows percentage positive response to
“Recommend Whitbread as a place to
work”
UK Operations:
78.7%
UK Support Centre:
79.5%
Germany:
78.0%
We will support the physical,
mental and financial
wellbeing of our teams
Number of Mental Health First Aiders
across Whitbread
121
Mental Health First Aiders
As a large business, we know
that every small action can
addup to a material change
toour people, the communities
and customers we serve, and
the planet.
We started the year with a series of
ambitious targets against our Force for
Good strategy. While this year has been
another challenging one, we are proud
that we have continued to move forward
with our targets, set new targets, and
ensured we remain focused on driving
positive change and creating value,
while mitigating any negative impact
that our operations might have.
More detailed information on our
targets, our progress against them and
the work we have done can be found in
our ESG report.
Opportunity
1 Leadership community is defined by all roles at grades C20+ that are UK based
* For progress vs targets and current actions, please see page 38
Whitbread Annual Report and Accounts 2022/23
46
Force for Good
2022/23 Annual Report sustainability targets
Our Opportunity pillar brings to
life the experience that we want
our teams to have when they
work for Whitbread, combining
positive wellbeing with career
development opportunities, all
underpinned by an environment
that is inclusive and allows
everyone to be themselves.
Here are some of our teams sharing their
experiences of working at Whitbread and
what this means to them.
We are proud to have been recognised
externally over the last 12 months
for the employment experiences
weareoffering to our teams.
Our awards:
Top Employers Award
for the13th
consecutiveyear
Stonewall Top 100
employer and Gold
Award for excellence
Investing in Ethnicity
Advanced Employer
Winner of the retail,
tourism and hospitality
employer inthe
Multicultural
Apprenticeship Awards
For more information,
seeour ESG report
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
47
Through our
apprenticeship
programmes,
wewillsupport
peopleto find
anddevelop their
hospitality careers
Kayla Millon – Deputy Hotel
Manager, Premier Inn
CardiffCityCentre
Having started at Whitbread
threeyears ago as a Duty Manager
studying a level 2 apprenticeship,
Ihave since completed my level 3
andstarted my level 4, earning a
promotion to Deputy Hotel Manager
along the way.
My apprenticeships have equipped
me with the knowledge and the
confidence needed to manage a
team and a busy hotel. Throughout
my learning, I have significantly
developed my management skills,
enabling me to adapt my approach
to individuals within my team.
Iamextremely grateful for the
opportunities provided to me by
Whitbread and I look forward to
completing my level 4 this year.
We will be
for everyone,
championing inclusivity
and drivingdiversity
Akshay Agawal – Regional
Operations Manager, Premier Inn
One of the main things that
attracted me towards Whitbread is
that, during my interview process,
Imet many Asian and Black Hotel
Managers and team members who
were talking about how it feels like
afamily to work at Whitbread.
Back in 2004, I took my first-ever
flight from India to the UK. Ihad
never sat on a plane before and
what I experienced then was such
aculture shock – people’s habits,
dialects and accents.
At Whitbread, all my line managers
always help me with my confidence,
and I have met senior leaders who
have sponsored me. Iam a proud
part of the Race, Religion and
Cultural Heritage network, to share
my experiences, and encourage
teams from diverse backgrounds
tohave their voices heard and
progress their career.
We listen genuinely to
our teams, ensuring
their views help inform
decision making
Mark Wallace – Duty Manager,
Premier Inn Preston Central and
National ‘Our Voice’ Representative
I became an ‘Our Voice’
Representative to be able to gain
more insight into how Whitbread
operates as a company and to try
andmake a positive difference.
What I found blew me away. To see
how much Whitbread and senior
leaders care, and how much they do
to be a Force for Good is amazing. It
hasmade me very proud to work
forWhitbread.
It is really exciting to see everything
that’s coming in the future. I can’t
wait to see it all in our hotels.
Everyone I have met going to various
Premier Inns, restaurants andthe
‘Our Voice’ meetings, from directors
to the front of house team are warm
and friendly. It really shows that,
when the company cares, its teams
at all levels, care too.
The community pillar is all about making a meaningful
contribution to the customers and communities we serve.
Community
Community commitments Progress against targets in 2022/23
£3 million
We will raise £3 million each year for Great Ormond Street
Hospital Charity
£1.9 million
raised for GOSH Charity this year, we also raised £688,000
forthe Disaster Emergency Fund (DEC) to support Ukraine
For every new site, we will donate our time to
activelysupporting local community activity
1,749
hours donated to local charities through new site openings
We will strive to be a leader in our sector for
delicious,appealing and healthier children’s food
We continue to be a signatory of Peas Please and have
beenexternally recognised for our children’s menus
We will improve the nutritional value of our menu by
continuing to reduce sugar, salt and calories
20%
by 2024 salt reduction programme (baseline 2017)
20%
by 2020 sugar reduction programme (baseline 2015)
20%
by 2024 calorie reduction programme (baseline 2017)
4.8%
reduction in salt across all brands from baseline year
24.1%
reduction in sugar in Beefeater and Brewers Fayre categories
(desserts/relevant Premier Inn breakfast items) from baseline
3.4%
increase in calories across all brands from baseline year
Whitbread Annual Report and Accounts 2022/23
48
Force for Good
Community
Our charity
partnerships
We have raised £21.9 million for
Great Ormond Street Hospital
Charity (GOSH Charity) over our
ten-year partnership. We are
pleased to announce that, having
renewed our partnership, we have
now set a new fundraising target
with GOSH Charity and have
committed to raise £3 million per
year over the next fiveyears. Funds
will go towards creating a world-
leading Children’s Cancer Centre at
Great Ormond Street Hospital,
caring for children from across the
country with some of the complex
and difficult-to-treat cancers.
We have also continued our
fundraising in Germany, supporting
national charity CHILDREN. This
year we have raised over €395,000
to help fight child poverty in
Germany through team member
fundraising and from customer
donations. Across the country,
Premier Inn sites have been forging
ties with local CHILDREN facilities
to organise events and to spend
time with young children from
disadvantaged backgrounds – from
Halloween parties, supporting
reading, toy donations and crafting
events. Anna Rachlitz, Head of
Partnerships at CHILDREN, said:
“In times like these, when more
and more poor families have to do
without the most basic
necessities…this support has an
incredible impact.”
Supporting local
communities
We know we can have a big impact
on local communities when we open
a new site and we want to ensure it is
a positive one. Each time we open a
new hotel or restaurant, team
members each donate three hours to
volunteer at a local charity or cause.
This year we donated 1,749 hours to
a variety of projects, such as running
IT and technology sessions for the
Alnwick Garden Trust, which aims to
combat loneliness and isolation in
the over 55’s, to repairing and
redecorating local community
centres in Llandudno, litter picks and
beach cleans in Porthmadog. At our
latest site in Keswick, our team
worked with the Cumbrian Rivers
Trust to repair riverbanks, plant new
trees and protect the saplings.
This year we also conducted
research to understand more about
the impact our hotels have on the
local economies they are part of.
Based on 12,600 responses from
guests staying at 357 Premier Inn
hotels across the UK and Ireland in
autumn 2022, we calculate that on
average £3.3 million of external
customer expenditure is generated
at each hotel location every year,
much of it in the local area within
which the Premier Inn is located. We
know we create local jobs too (425
from our new site openings this
financial year alone) and now will
aim to understand more about the
social impact our business and the
Force for Good programme has on
local communities.
Looking after our
guests
Alongside sugar, this year we are
reporting on our salt and calories
targets. We have been working on
these for many years and have been
working with the Government’s
Office for Health Improvement and
Disparities (OHID) targets.
We are pleased to have seen an
overall reduction of salt (4.8%) and
sugar (24.1%) in our meals; this is an
average across all brands from
baseline. This is due to reformulating
dishes with the highest salt and
sugar contents and working closely
with our suppliers to ensure that all
ingredients we source meet the
relevant Government salt targets,
wherever this does not compromise
on taste, quality or food safety.
This year we been improving the
granularity of our sources of
nutrition data for many of our dish
calculations to improve the accuracy
of the calorie values we declare this
year; we have moved from some
theoretical nutrition values to
analysed results as the resource in
the supply base has increased
post-COVID. This has resulted in an
overall average increase of 3.4% in
the calories in our dishes across all
brands. We are continuing to work
hard on driving down calories
through our menu development
process and in some areas, such as
Premier Inn main courses, we have
seen a calorie reduction of 10%. This
is due to reformulating or removing
our highest calorie dishes and
expanding the range of lower
caloriechoices.
For more information,
seeour ESG report
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
49
Always operating in a way that respects people and the planet.
Responsibility
Responsibility commitments Progress against targets in 2022/23
Whitbread’s critical commodities accredited against
robuststandards
100%
whole fish served in the UK is MSC or equivalentcertified
100%
of our raw beef range in the UK is produced to
arecognisedfarm assurance scheme in its country oforigin
100%
of whole shell eggs have cage-free status
70%
of our ingredient eggshave cage free status
1
, we have a
target to reach 100% by 2025
52.3%
of our cotton was sourced as Better Cotton
2
, we have a target
to reach 90% by 2025
69%
of Palm Oil in our own branded products is RSPO certified, we
have a target to reach 100% by 2025
100% of our suppliers will be risk assessed for inherent
human rights risk
3
100%
of suppliers risk assessed for human rights risks
3
We will eliminate unnecessary single-use plastic by 2025 We are now aligning the scope of our target with the UK
Plastics Pact and our working to eliminate its identified
‘problematic plastics’ (read more in our ESG report)
We will not send any waste to landfill
99.9%
of operational waste diverted from landfill
We will cut food waste by 50% by 2030
11.8%
reduction from our baseline year of 2018/19
We will become net zero for Scope 1 and 2 carbon emissions
by 2040
We will reduce Scope 3 emissions in our supply chain by 50%
by 2035 and 64% by 2050
52.5%
Scope 1 and 2 intensity reduction from the 2016/17
baselineyear
28.1%
intensity reduction against 2018/19 baseline year
We will minimise water use across our business and
champion water stewardship within high-risk areas
76,885m
3
of water saved through internal water auditing and supply
pipe leak detection
1 Relates to Whitbread own recipes only
2 Relates to cotton in rented linen, ‘guest buys the bed’ and duvet and pillow purchases annually, calculated within the calendar year rather than the financial year. Better
Cotton is sourced via a chain of custody system of mass balance and is not physically traceable to end products
3 Assessments are based on both the supplier’s country of operation and associated sector risk. 100% of suppliers receive a country risk assessment but only suppliers over
£10,000 in annual spend receive both assessments.
Whitbread Annual Report and Accounts 2022/23
50
Force for Good
Responsibility
Carbon emissions
This year we have reduced our
Scope 1 and 2 carbon intensity by
52.5%. This is in large part due to the
new electric grills which we have
been rolling out across the estate to
replace gas grills. This year we have
installed 236 new grills across 118
sites, bringing the total of new grills
to 756 since we started this project
in 2018. We have also been trialling
new technology, with over 40 air
source heat pumps installed across
the estate, and two full retrofits of
LPG powered sites planned for the
next year.
We have also re-calculated our
Scope 3 emissions for the first
time since our base year, 2018/19,
and have seen our emissions
intensity reduce by 28.1%. The
driving factor in this reduction is
an improvement in data
granularity, leading to a more
accurate representation of our
actual Scope 3 emissions. We
have also seen changes in
operations and behaviour since
COVID-19 leading to consolidation
of the supply chain, reduced
business travel and an increased
use of electric vehicles which have
all contributed. Alongside this
re-calculation, we have been
collecting data from suppliers to
help us understand where they are
on their carbon reduction journey.
Our focus in the coming year will
be on our most material supply
chain categories: food and
beverages, goods not for resale,
and the building of new sites, to
begin driving forward more
strategic carbon reduction in
these key supply chains. You can
find out more about our plans to
decarbonise our estate, our own
operations and supply chain in our
newly published Transition Plan.
Water and biodiversity
This year we are pleased to have
moved forwards in our efforts to
reduce out impact on the interlinked
areas of biodiversity and water.
Biodiversity has been a recurring
topic over the last year, with
upcoming regulation, such as the
TNFD (Taskforce on Nature-related
Financial Disclosures) and
increased stakeholder interest. At
Whitbread, we operate over 1,600
sites and our large footprint means
we can have a big impact in this
space. This year we worked with
external experts to baseline our
biodiversity impacts and to asses
related risks and opportunities. We
will use this analysis to lay the
ground work to allow us to set a
‘Nature Positive’ target in the
coming financial year. We have
already started to implement
projects across some of our sites,
including a partnership with the
RSPB to look at how we can
enhance wildlife as part of planned
garden refurbishments, and a
partnership with BugLife to
enhance biodiversity on unused
parcels of land. We will continue
this work into the next year.
We have worked for many years
toreduce our water use. Not only
does this conserve water but
supports our carbon targets as less
energy is needed to heat less
water. This also has a commercial
benefit as our water and energy
bills are reduced. These water
reduction projects have been
largely successful and we have
focused our efforts on regions with
high water stress. This year we
have committed to a time bound,
estate-wide reduction of 20%
water reduction per sleeper by
2030. This will mean bringing our
water saving technology across
the full estate as we continue to
ensure we are doing our bit to
protect this vital resource.
Responsible sourcing
We have a mature and well-
established strategy in place to
ensure we are sourcing sustainably
and ethically. This starts with the
people who work in our supply
chain as we seek to mitigate,
manage and remediate risk
associated with human rights. You
can find out more about this
programme and the work that we
do in our ESG report and also in
our Modern Slavery Act Statement.
We also work to ensure that our
critical commodities are sourced to
robust standards, with our eggs,
fish, beef, palm oil and now cotton
sourced to strict guidelines or
accredited to externally recognised
standards. Though we use
relatively little palm oil, we are
Roundtable Sustainable Palm Oil
(RSPO) members and this year set
a target to have 100% of our own
branded products in the UK to
come from certified palm oil
sources by 2025.
This year we set a target to source
90% of the cotton for our rented
linen, ‘guest buys the bed’ and
duvets and pillow as Better Cotton
by 2025. We have spent the last
year working with our suppliers to
agree a process for sourcing more
sustainable cotton for the laundry
industry. To do so, we will increase
the amount of cotton that we
source through Better Cotton. In
2022, we reached 52.3%, meaning
we are on track for our target of
90% by 2025.
We are now working to assess
other critical commodities,
including our timber supply, and
running a series of projects
focused on high-deforestation risk
commodities starting with soy.
For more information,
seeour ESG report
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
51
The impacts of climate change
are now being seen on a daily
basis. As a responsible business,
it is important that we play a
meaningful part in addressing
these risks and that we are clear
on those which will have the
most material impact on our
business. We understand that
clear and comprehensive reports
on the impact of climate change
are critical for our shareholders
and for the wider investment
community.
While climate change poses risks to
current business models across our
industry and beyond, it also creates
opportunities for companies that act
decisively in a competitive environment.
We are working to lead our industry
towards a sustainable future, while
transparently reporting our progress.
Last year we published our first full
TCFD Report and this year we are
building on this with the work we have
done to further mitigate our risks, our
performance against key metrics and
targets and how we have deepened our
understanding of the key risks and
opportunities our business faces.
Youcan see our full TCFD Report on
ourwebsite. This outlines our strategy,
governance structures, how we
approach risk management as well as
outlining our key climate-related risks
and opportunities.
The full TCFD Report reiterates the
process we undertook to identify the
principal climate-related issues which
have affected and will potentially affect
our businesses, strategy and financial
planning. It also outlines the process we
undertook this year to sense check the
materiality of these risks and
opportunities and how we have
progressed our scenario analysis and
quantification of each risk to provide a
more granular picture of possible
impacts to our business. Our process
identified a number of risks and
opportunities, which were categorised
by the following three risk types:
transition, physical and connected risks.
We identified the main climate-related
financial risks by reference to three core
global warming scenarios: an ‘Orderly
Transition’ (1.5-2°C), a ‘Disorderly
Transition’ (1.5-3°C) and a ‘Hot House
World’ (3-5°C). Key risks and
opportunities have been identified by
reference to these scenarios.
Our Compliance
Statement
Whitbread PLC has considered our
obligations in respect of climate-
related disclosure under the
Taskforce on Climate-related
Financial Disclosures (TCFD)
Recommendations and
Recommended Disclosures and
confirm that we have made
disclosures consistent with this
guidance, save for the following
item: Strategy Recommendation
disclosure b) relating to quantitative
climate-related scenario analysis.
We disclose the work we have
undertaken to analyse the relevant
climate scenarios against each risk,
with the data available to us. We
have found a breadth of
assumptions in much of the base
data we rely on to undertake this
scenario analysis and quantification.
While we continue to improve our
understanding and analysis in
relation to the quantification of
these risks, we look forward to the
market also continuing to mature its
approach to the data as this will
support the evolution of our more
comprehensive understanding of
the resilience of our business under
each climate scenario. The work we
have already done is outlined in the
Principle Risks table in our full
TCFDreport.
Network for
Greening the
Financial System
Approx.
temperature
increase Summary
Orderly
Transition
1.5-2°C Decisive global
policy action is
taken to limit
global warming
from early 2020s.
Disorderly
Transition
1.5-3°C Policy measures
are delayed until
late 2020s/early
2030s, meaning
increased costs,
e.g. higher
carbon prices.
Hot House
World
3-5°C+ No new policies
are introduced,
leading to
increasing
physical impacts.
Transition risk
• Policy, regulatory and legal changes
• Technology shifts
• Changing market demand
Physical risk
• Acute: event driven, e.g. extreme weather, flood risks
• Chronic: longer term shifts in climate patterns,
e.g.sustained higher temperatures
Connected risk
• Second order risks arising from transition or physical risk
impacts, e.g. recessionary pressures
For more information,
see our TCFD report
Whitbread Annual Report and Accounts 2022/23
52
Force for Good
Task Force on Climate-related Financial Disclosures
We are pleased to publish our first Net
Zero Transition Plan. This is our road
map to meeting our science-based
targets to achieve net zero by 2050
across all scopes. We have submitted
net zero targets to the Science Based
Targets initiative, which, once validated,
will commit us to near- and long-term
company-wide emission reductions in
line with science-based net zero.
These are all being rigorously validated
by the Science Based Targets initiative
to ensure they are in line with a
maximum 1.5 degree warming scenario
and we hope to receive validation in the
first half of 2023/24.
Our Net Zero Transition Plan has been
aligned to the Transition Plan Taskforce
disclosure framework and the
decarbonisation plans are now
embedded across our organisation and
supported by the Board. We follow a
three-stage process:
1. Reduce emissions: we will achieve this
through continued efficiencies and
innovations to reduce our usage of
fossil fuels, from LED lighting to using
additives to ensure our gas boilers work
at a higher efficiency. In particular, our
water reduction target will not only
drive reductions in water use, but also
in gas use, as less water needs to be
heated. From 2027, new builds will all
be built with net-zero specifications
and without a gas connection. We are
also trialling low-emissions fuel for our
logistics fleet.
2. Transition to renewables: We already
source 98% of our electricity in the UK
from renewable energy. Our next
challenge is to decarbonise our existing
estate, primarily through phasing out
gas equipment and switching to
renewable-powered alternatives. We
have already trialled air source heat
pumps in 40 of our hotels and have
installed solar panels across 20% of our
estate. Our next step is to undertake a
‘Net Zero Audit’ of the estate, to
document the existing set-up at each
site and the suitability of each site for
retrofitting to net zero. This has already
been conducted for all LPG-powered
sites, to select the most appropriate for
a full retrofit. The learning from this,
together with the audit results and
refurbishment plans, will enable us to
prioritise sites and meet our emissions
reduction goals.
3. Remove residual emissions: We will
make every effort to decarbonise and
reduce our emissions as close to zero
as possible, exploiting all available
opportunity to achieve this. However,
should some residual emissions remain
as we approach our 2040 Net Zero
goal, we have committed, through our
science-based targets, to neutralise
these by taking appropriate measures
to remove these from the atmosphere
and permanently store them.
We know that this will be an iterative
plan as we build our understanding of
our existing assets, technology develops
and the government’s decarbonisation
strategy evolves, and we look forward to
sharing our progress. You can see an
overview of our net-zero journey below.
• First air source
heat pump
(ASHP) installed
• First Building
Management
System installed
• Scopes 1 and 2
baseline
• Gas efficient grills trialled
in restaurant kitchens
• Switched to 100%
renewable energy
contracts across
UK estate
• Baselined Scope 3
2008 2010 2015 2016 2018
• First ‘green’
hotel opened in
Tamworth, with
high thermal
efficiency and
first ground
source heatpump
• Second ‘green’
hotel opened in
Burgess Hill with
first low-carbon
restaurant
2019
• Whitbread opens
first battery-powered
hotel in the UK –
Premier Inn Edinburgh
2020
• German estate increases
from 5 to 21 hotels, and
switches to renewable
electricity contract
• Whitbread commits
to BREEAMexcellent
standards inits
construction
• 20% of Whitbread’s UK
estate now have solar PV
2021
• Electric vehicles added
to company car list and
deal done to install EV
charging points
• Whitbread trials
electric grills in
restaurant kitchens
• Whitbread commits
to the Race to Zero
and SBTi
2022
• Released our first
TCFD report
• First supplier
engagement
onScope3
• Targets submitted
to SBTi for
validation
2023
• Release first Transition
Plan
• First gasless hotel
opening – Premier Inn
Swindon
• Retrofit to Net Zero
trials underway
• New water reduction
target set
2024
• 100% existing estate
audited for retrofit to
net zero ‘readiness’
2026
• 100% of new UK self-
build developments
constructed to net
zero specifications
• Company car fleet
choice 100% EV
• 100% renewable
electricity purchased
across entire estate
2030
• Near term
SBTi-validated
targets to be met
2040
• Net zero in
Scope 1 and 2
2050
• Net zero across
the value chain
(all Scopes)
For more information,
seeour Transition plan
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
53
Transition Plan
Maintaining and developing positive
relations with all the stakeholders who
may be impacted by the decisions we
make is a critical factor in ensuring
long-term sustainable success for our
business. Stakeholder engagement is
central to the formulation and delivery
of our strategy. As the strategy for the
Group is developed, the views and
interests of various stakeholders are
factored in to the strategic options,
including the views of customers,
employees, shareholders and suppliers.
Equally, the impact of Group strategy
onthe communities in which we operate,
and on the environment, is considered.
That way, the strategy of the Group is
developed directly with those interests
in mind.
Equally, the interests of all relevant
stakeholders are carefully considered by
the Board and the Executive Committee
as and when specific decisions are
madethroughout the year. In its decision
making, the Board considers what is
most likely to promote the success of
the Company for its stakeholders in the
long-term.
Our directors understand the
importance of their section 172 duty
toact in good faith to promote the
success of the Company.
Some examples of how the Board
considers these groups during Board
meetings and discussions include
thefollowing:
• As part of the monthly KPI pack,
theBoard considers data relating
tocustomer feedback and team
retention, as well as data
onshareholders and themes from
investor relations meetings.
• The Chief Financial Officer’s Board
reports give details on recent
engagement with shareholders
andPension Trustees discussions,
andqualitative feedbackon
specificconcerns.
• The Chief People Officers’ Board
reports provide details of all relevant
employee-related matters, including
recruitment, retention, diversity and
inclusion, listening, wellbeing, training
and reward.
• The General Counsel’s report contains
an update of key developments on
theForce for Good agenda, including
work in the community, charitable
fundraising, the environment,
plasticsand food waste. It also
includes best practice guidance
onsection 172 compliance.
• The Chief Executive’s report gives
details of any relevant interaction with
Government or regulators, and key
issues with suppliers and landlords.
• Board debate on possible mergers
andacquisitions include wider impact
assessments, considering issues
suchas integration with the current
business, management capabilities,
the impact on team members, and
theability of our supply chain to
reactwith the plan.
The Board also takes into consideration
the long-term consequences for both
the Company and its stakeholders when
making these decisions, making sure the
Company conducts its business in a fair
way, protecting its reputation and
external relationships.
This section provides some examples
ofdecisions taken by the Board this
year, and how stakeholder views and
interests, as well as other section 172
considerations, have been taken into
account in its decision making.
 Read more about our stakeholder
engagement on pages 55 to 58.
All decisions and actions are reviewed
to ensure the intended outcomes
areachieved
Board information
Board decision
The Board relies
on the diverse
experience of
the Board
members
The Board and its committees meet
atleast eight times a year and
additional meetings are held on
anadhoc basis as required
All decisions are
aligned to the
values and
culture of the
organisation and
keep in mind all
stakeholders
External advisers
The Board receives detailed agenda
papers a week ahead ofevery
meeting, giving directors sufficient
time to perform their duties in line
with section 172
Whitbread organises various training
programmes fordirectors to keep
them up to date on all aspects
ofthebusiness
The Board receives feedback from
employees, customers, investors and
other stakeholders so it is abreast with
the pulse of the business
Consideration of stakeholders in
decision-making process
Whitbread Annual Report and Accounts 2022/23
54
Our stakeholders
Section 172 statement
We are focused on driving long-term
sustainable success for the benefit of all
our stakeholders. We therefore need to
understand the needs of each stakeholder
and the most effective way to engage
withthem. This section provides insight
into how the Board and Company consider
our stakeholders, for a full section 172
statement, please see page 54.
Employees
Our people are at the heart of Whitbread. A talented,
engaged, motivated and diverse workforce is critical
inthedelivery of our strategy.
What matters to employees
• A healthy and safe working environment
• Industry-leading training and development programmes
• Market-leading reward and retention structures
• A business that considers team member wellbeing
(physical, mental and financial)
• An inclusive culture that values difference, allowing
everyone to be themselves at work
• Career development opportunities
• Open, honest and transparent management processes
Board considerations
• Over the year, the Board has focused discussions on
team member pay. Taking into consideration the current
cost of living and the impact on our entry level workers
in particular
• The Board receives monthly data in the monthly KPI
pack regarding team retention, and the monthly data is
considered carefully
• The Chief Executive in his report specifically mentions
team retention and reward strategies, and makes
proposals for approval
• ‘Our Voice’, a body made up of elected representatives
across the business, represent the views of employee
constituencies to senior management. The Board
receives reports of these meetings
• Review of the Speaking Out process, as requested by the
audit committee to ensure a better platform for
employees to raise concerns
• The Board has set eight specific Diversity and Inclusion
targets to ensure that the business is properly
representative of the communities in which we operate.
Good progress has been made in relation to these
targets. Read more on page 46
• In the monthly CPO report, the Board receives detail
around all areas of the People strategy
• Diversity and inclusion is considered as part of all Board
appointments. This is guided by the Board Diversity
Policy, which was introduced in 2021 and the Gender and
Ethnicity Pay Gap Report 2022. More detail on this can
be found on the Company’s website
• The Board reviewed diversity and inclusion as part of the
succession planning and People strategy. This also
included focus around creating a diverse pipeline at the
senior management level. The Board discussed the
various diversity inclusion networks, Glow, RRCH, eNable
and Gender Equality. For more on the inclusion
networks, see pages 40 to 41
• The Board receives reports on health and safety
management bi-annually; statistics are included in the
KPI pack, and any incidents are reported straight away
to the Board
Outcomes of engagement
• £28 million (£46 million annualised) investment in team
member pay, with minimum pay rates increasing by 6.4%
in the last 12 months, see page 37
• High engagement scores from our employees across the
UK and Germany see page 46
• On track to achieve our 2023 Diversity targets of 40%
female representation and 8% ethnic representation in
our leadership community (currently 40.4% female and
6.7% ethnic minorities)
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
55
Stakeholder engagement
Customers
Customers are at the heart of our business and
Boarddecisions are driven by providing our guests witha
consistent, high-quality experience at a great price to
ensure they keep coming back.
What matters to customers
• Consistent, high-quality hotels to stay in with a quality
food and beverage offering, for a great price
• Brilliant service from our teams
• Excellent standards in our hotels and restaurants which
are clean, safe and fit for the wishes of our customers
• Healthy menu choices including vegan and fish items
onthemenu
• Responsibly sourced food and beverages
Board considerations
• The Board receives data on customer satisfaction scores
each month
• The Board receives a monthly report on commercial,
pricing and operational performance each month
• Quarterly deep dives are provided into pricing and
commercial strategies in the UK and Germany as part of
the strategy day presentations,
• The Board approves the refurbishment schedule and
repairs and maintenance programmes. The Board also
continued with a programme of investment through the
cycle, to ensure the portfolio retains the high quality our
guests expect
• The Board considers room innovations periodically,
e.g.Premier Plus rooms, twin rooms
• The Board considers marketing campaigns and
digitalstrategies
• The Remuneration Committee includes customer
measures in the remuneration structures for key
teammembers
Outcomes of engagement
• Improved customer satisfaction scores, please see page 4
• Market outperformance and YouGov scores
demonstratethe quality and value of the brand
proposition and its popularity
Investors
The Investor Relations team holds regular investor
meetings centred around our Group strategy and
performance, and also around ESG strategy and
ForceforGood.
What matters to investors
• Clear and well communicated strategy for the Group
• Financial performance, particularly by reference to the
competitor set
• A proactive programme of engagement on keytopics
• Leadership and governance
• A leading ESG programme
Board considerations
• The Board receives monthly data on changes to the
share register and updates on engagement with
shareholders, other investors and sell-side movements
• The Chairman and General Counsel consulted with a
broad range of major shareholders in September, at
which topics such as strategy, performance, leadership
and ESG were covered
• The Company has contacts at the UK Shareholders
Association, allowing private shareholders’ views to be
taken into account
• The Chair of the Remuneration Committee and the
General Counsel have consulted on the new
remuneration policy. The new policy has been amended
in the light of the feedback from shareholders, and will
be presented for a shareholder vote at the AGM
• The Chief Executive, Chief Financial Officer and the
Investor Relations team have held numerous meetings with
shareholders, banks and bondholders throughout the year
• The Board receives a presentation at least once every
year from the brokers on the current views of investors
and on issues which need to be addressed
• The Board considers very carefully the Company share
price, and whether the Company is fairly valued, as well
as the matters which could be addressed to generate
incremental value. For example, accelerating the growth
of the German business, the value of the property
portfolio, and M&A transactions
Outcomes of engagement
• Changes to remuneration policy
• Enhancements in ESG programme, e.g. bringing forward
our net zero target by ten years
Whitbread Annual Report and Accounts 2022/23
56
Our stakeholders
Suppliers
The Board values its relationships with suppliers and
fosters these carefully to ensure the long-term
sustainablesuccess of the Company.
What matters to suppliers
• Payment on time and in full
• Good communication: strong and consistent levels of
demand and transparent feedback on performance
• Tackling modern slavery
• A plan to reduce carbon through the supply chain
Board considerations
• Given the supply chain issues and increased costs as we
have emerged from COVID-19, the Board has received
regular updates on issues such as shortages, security of
supply, the impact on the business and on other
stakeholders, cost inflation and strategies to tackle each
• The Board has discussed inflation along the supply chain
as part of the CFOs report.
• The Board approves a Modern Slavery Act Statement
each year
• The Board approves material contracts with suppliers
each year if they are of significant size and importance.
This year, the Board has reviewed and approved
contracts with Oracle, Fujitsu, laundry providers and
energy suppliers
• The Board has received presentations on sustainability,
which includes the responsible sourcing of critical
commodities, Scope 3 carbon emissions, the reduction
of single-use plastics, and the reduction of food waste
• This year, the Board has approved the delivery of over
42,000 meals to FareShare, a charity which delivers food
which would otherwise be wasted, to foodbanks
Outcomes of engagement
• Increased levels of engagement with the supply chain to
ensure continuity of supply
• Agreed measures to ensure suppliers are paid on time.
• Training and development for certain suppliers regarding
modern slavery and ethical sourcing
Communities and the Environment
Whitbread is committed to doing right by the communities
we operate in and the environment. This is embedded in
our Force for Good programme spearheaded by Chris
Vaughan, Company Secretary, and brought to life in our
ambitious sustainability targets.
What matters to communities and the environment
• An industry-leading health and safety programme for
team members and guests
• An environmental programme which is industry leading,
including a Scope 1 and 2 net zero carbon target by
2040, Scope 3 carbon targets in line with 1.5 degrees of
global warming, and targets to eliminate waste,
particularly food waste
• Tackling modern slavery and ensuring human rights are
respected throughout our business and supply chain
• That our critical commodities are sourced sustainably
• Supporting local communities with economic
opportunities and raising funds for our chosen charities,
national and local
Board considerations
• The Board has received presentations regarding our
sustainability programme, Force for Good, and has
challenged the targets which were proposed
• The Board receives regular updates on key
developments in the Force for Good programme and
provides comment and view on material issues
• The Board reviewed the Company’s Charity partnership
and has received information on the amount of
fundraising, with our chosen charity partner, Great
Ormond Street Hospital Children’s Charity
Outcomes of engagement
• The partnership with Great Ormond Street Hospital
Children’s Charity was renewed. Nearly £22m has now
been raised for the charity
• Carbon emissions intensity has reduced by 52.5% since
our base year of 2017
• Raising nearly £700,000 in aid of the humanitarian crisis
inUkraine.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
57
Lenders
The Board has identified our key lenders as our syndicate
ofbanks that participate within our revolving credit
facility,and our bondholders, who hold our 2015 and
2021issued bonds.
What matters to lenders
• Our current performance and financing strategy
• The nature and quantum of debt and level of liquidity
oftheCompany
• Our ability to service the debt interest payments
andrepayment at maturity
• Our credit rating and commitment to investment
grademetrics
• Our covenants and compliance certification
• The Green Bond Framework
Board considerations
• Once a year the Chief Executive and Chief Financial
Officer meet the key lenders within the revolving
creditfacility to discuss the annual results and
businessperformance
• The Group holds a fixed income call with our
bondholders after the annual results presentation
• Our Group Financial Controller is in regular contact with
our banks’ relationship teams, discussing operational
andstrategic financing requirements, and our Treasury
team engages to manage the Group’s
operationalrequirements
• We continue to monitor and discuss with the banks their
strategy and ability to lend to the Group in the future
and any changes that may impact this
Outcomes of engagement
• Debt capital structure that is optimum for the Group
• A base of lenders that can support the Group’s financing
and operational needs
• Robust relationships with lenders that are continually
monitored, and facilitate refinancing and access to
sources of finance when needed
• The support and access to product offerings that the
lenders provide
• A new 5 year revolving credit facility was signed in
May’22for an initial 5 year period, with 2 one-year
extension options
Pension Trustee
Whitbread is committed to maintaining its positive
andconstructive relationship with the pension scheme
Trustee and to ensuring security of members’ benefits
inthe pension scheme.
What matters to the Pension Trustee
• Pension scheme funding and investment strategy,
supported by a strong Whitbread covenant, that ensures
the long-term security of members’ defined benefits
• Value for money defined contribution arrangements
andengaging communications that support members
insaving for retirement
Board considerations
• The Chief Financial Officer attends a Trustee meeting
annually to present, and answer questions on, the
Company’s annual results and its ability to meet its
obligations to the pension scheme
• The Chief Financial Officer regularly interacts with the
Chair of the Trustee
• A Company representative attends the Trustee’s Benefit
Sub-Committee and the Funding & Investment
Sub-Committee meetings. Attendance at the latter
enables an understanding of any investment changes
that are planned and can provide a Company view
whereappropriate
• Each quarter, the UK Finance Director meets with the
Funding & Investment Sub-Committee to give an update
on Company performance and answer any questions
• The Board receives presentations in relation to pension
issues, including regarding the funding position, triennial
valuation and investment performance
• During the year, the Board received updates on the
pensioner buy-in transaction, having previously
confirmed it was supportive of the Trustee entering into
a buy-out policy to further derisk the pension scheme.
The UK Finance Director was part of the Joint Working
Group established to progress the transaction
Outcomes of engagement
• Strong and open relationship with the pension
schemeTrustee
• Well-funded pension scheme and security
ofdefinedbenefits
Whitbread Annual Report and Accounts 2022/23
58
Our stakeholders
Reporting
requirement
Policies and standards
which governourapproach
See for additional information
Anti-corruption
and anti-bribery
• Anti-Bribery Policy
• Code of Conduct
• Corporate Governance, pages 82 and 83
Employees • Gender and Ethnicity Pay Gap Report
• Health and Safety Policy – Statement of Intent
• Speaking Out Policy
• Diversity and Inclusion Report
• Nomination Committee report on page 91
• Force for Good, pages 42 to 51, and sections
highlighted with Force for Good logos
• Section 172 statement on page 54
• Anti-corruption and anti-bribery on page 82
Corporate Social
Responsibility
Sustainability reporting
• 2021/22 Environmental, Social and Governance Report
• TCFD reporting
• SASB reporting
• CDP reporting
• Force for Good, pages 36 to 49, and sections
highlighted with the Force for Good logos, in
particular our Force for Good targets
• Read the full reports on www.whitbread.com/
governance/reports-policies
Environmental policies
• Premier Inn Environment Policy
• Restaurants Environment Policy
Responsible Sourcing Policy
• Responsible Sourcing – Soy Policy
• Responsible Sourcing – Cotton Policy
• Responsible Sourcing – Cocoa Policy
• Responsible Sourcing – Sugar Policy
• Responsible Sourcing – Meat Policy
• Responsible Sourcing – Palm Oil Policy
• Responsible Sourcing – Timber Policy
• Whitbread Responsible Sourcing – Packing Policy
• Whitbread Responsible Sourcing Policy 2021
Animal Welfare
• Egg Track Report 2020
• Dairy Policy 2020
• Laying Hen Policy 2020
• Lamb Welfare Policy 2020
• Poultry Welfare Policy
• Animal Welfare Policy
• Beef Welfare Policy
• Pig Meat Welfare Policy
• Fish Policy
Human rights • Human Rights Policy
• Disability Awareness
• Equal Opportunities
• Human Trafficking Positioning Statement
• Modern Slavery Statement
• Whitbread PLC Board Diversity Policy 2022
• Force for Good, pages 42 to 51, and sections
highlighted with Force for Good logos
Privacy • Customer Privacy Policy
• Data Protection Policy
• Employee Privacy Policy
• Corporate governance, page 82
Social matters • Gender Pay Gap Report
• Responsible Sourcing Policy
• Diversity and Inclusion statement
• Force for Good, pages 42 to 51, and sections
highlighted with Force for Good logos
• Diversity and Inclusion targets and commitments,
page 46
Description of principal risks and impact of business activity • Principal risks and uncertainties, pages 60 to 66
Description of the business model • Business model, pages 12 and 13
Non-financial performance indicators • Our strategic framework, pages 14 and 15
Diversity and
inclusion
As part of our Diversity and Inclusion commitments, we are undertaking regular reviews of our policies across
Whitbread to ensure they are inclusive, particularly of under-represented groups. For further information, see
page 37.
As the UK’s largest hotel company, we have a responsibility
tofocus and lead on our most important people, social and
environmental issues, which is why one of our Force for Good
commitments is to ensure we always do business in the right
way. We aim to comply with the new non-financial reporting
requirements contained in sections 414CA and 414CB of the
Companies Act 2006. The below table, and the information
itrefers to, is intended to help stakeholders understand our
position on these key non-financial matters. Our due diligence
process is that each policy and standard is reviewed annually
by the responsible party and updated accordingly to ensure
itreflects up to date and accurate information. Further
information on the various policies mentioned below and
throughout the report can be found on our website at
www.whitbread.co.uk/governance/reports-policies
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
59
Non-financial and sustainability information statement
In the current environment,
aneffective and robust risk
management process is integral
to our ability to achieve our
strategic priorities. Our success
is underpinned by our ability to
identify, manage and mitigate
risk within our business.
We understand that risk
naturally arises from operational
and strategic decisions taken
throughout the Group. It is not
something that we can avoid
but needs to be actively
managed and harnessed in
pursuit of our business
objectives. The Board has
ultimate responsibility for risk
management throughout the
Group and determines the
nature and extent of the risks
weare willing to take.
Certain responsibilities, such as
overseeing the systems of risk
management and internal control, have
been delegated by the Board to the
Audit Committee, which completes an
annual review of the effectiveness of
these processes. Risk is managed
proactively by the Executive
Committee. Our functional areas
complete a bi-annual review of the risks
relevant to the achievement of their
strategic goals, while also taking into
account key operational risks, which are
updated regularly.
A robust top-down risk assessment is
completed to capture Board and
Executive Committee views on the
principal risks facing the Group and
our related risk appetite. This enables
us to keep up to date with changes in
our risk profile and adapt as necessary.
Actions required to manage these risks
are monitored and reviewed on a
regular basis.
Risk management framework
Risk management reporting and escalation
Governance, strategy, oversight and communications
Board
Accountable for strategic risk management, including the assessment of risk appetite,
andensuring a sound system of internal control and risk management is in place
  Read more on pages 73 to 77
Executive
Committee
Review, challenge and approval
ofGroup risks
  Read more on page 78
Audit
Committee
Oversight and challenge of the
effectiveness of risk management
and mitigating controls
  Read more on pages 88 to 89
Risk Working Group
Identify and evaluate
newrisks, monitor risk
interdependencies and
report key risks tothe
Executive Committee
Internal
Audit
Coordination and analysis
  Read more on pages 88
Whitbread Annual Report and Accounts 2022/23
60
Understanding and responding to risk
Principal risk and uncertainties
Risk identification
We place high importance on the
continual development and versatility
ofour risk management process. This
ensures that we are able to effectively
identify and evaluate risks which may
affect our ability to achieve our
objectives and strategy and then
introduce mitigations to reduce
thesetoan acceptable level.
Risks identified are often highly
interdependent, meaning changes
toonerisk can affect multiple
existingrisks or result in new risks
beingcreated. Our Risk Working
Groupallows us to effectively monitor
these interdependencies and identify
associated new risks by taking feeds
from across the business, evaluating
findings and reporting these directly
tothe Executive and Audit Committees.
All principal risks are assigned to a
member of the Executive Committee
and this, combined with our robust
threelines of defence model, helps
toreinforce a tone of accountability
throughout the business. Internal Audit
constructs a risk-based work plan
aligned to the principal risk register
toprovide assurance over our highest
risk activities.
Risk appetite
Risk appetite is defined as the level of
risk we are willing to accept in pursuit of
our strategic priorities. The level of risk
acceptable for principal and emerging
risks is assessed on an annual basis by
the Executive Committee and Board
members, who define their risk appetite
against key indicators including potential
impact of risk, likelihood of risk, and
ability to reduce risk through mitigation.
This ensures alignment between our
view of acceptable risk exposure and
thestrategic priorities of the Group.
The Executive Committee communicates
the appetite for risk, to embed this
within our ways of working. Risk
appetite is considered when making
strategic or operational decisions
overnew opportunities for the Group.
Emerging risks
Emerging risks are those which,
whilenot immediate, have the
potentialto materialise over a longer
period of time, causing a significant
impact on our business.
Emerging risks may be new risks not
previously identified, or changes to
existing risks that are currently difficult
to quantify. In order to identify emerging
risks at the earliest opportunity, risk
themes and trends from industry and
professional bodies and peer networks,
are collated and reviewed at least
annually by the Executive Committee and
managed through the risk management
framework as appropriate.
Geopolitical conflicts continue to surface
across new regions with the potential to
create previously unforeseen risks and
exacerbate existing risks which could
have a significant impact on Whitbread’s
operations, including movement of key
resources, willingness to travel and
downturn of global economies. Whilst
the ongoing Russian invasion of Ukraine
continues to cause disruption, the
increasing tensions between China and
Taiwan, and the resulting possible hostile
action, could have a severe, global
impact on the supply of computer chips
and other technology.
Scarcity of computer chips, which drive
manufacturing of a significant range of
wider products utilised globally has the
potential to put pressure on already
strained supply chains as they adapt to
further resourcing issues and greater
demand levels. In the UK, this is
exacerbated by disruption to markets
caused by increased trade regulations.
As pressure on supply chains persists,
we are regularly reviewing our continuity
plans, focusing on surety of supply with
critical suppliers, whilst ensuring
consideration and compliance with our
ethical and sustainability targets.
Increased regulatory change and
compliance has the potential to impact
many areas across the business, from
governance and controls to external
disclosure requirements. In particular,
changes to regulations in the area of
sustainability and the corresponding
time bound pressure to meet related
targets could have a substantial future
impact on the development and
operation of sites. The exact pace and
quantum of change in any of these areas
is difficult to estimate; however, the
business continues to keep abreast of
relevant developments with strategies in
place to work towards existing targets
and new requirements.
Whilst we are effectively managing the
immediate need to staff the business,
there remains a potential risk around
talent retention and labour supply, and
how this will change over time as
younger generations drive change in
workforce requirements and
expectations. There is also a rising
presence of unions in lower-paid sectors,
and the last 12 months have seen a
dramatic increase in appetite for
industrial action across many industries.
COVID-19
COVID-19 had a significant impact on
our operations and trading activities
more latterly due to the government
trading restrictions which have now
been removed. We demonstrated our
resilience over this period and have
included the lessons learned into our
business-as-usual processes in all
functional and operational areas. We do,
however, continue to remain alert and
responsive, and will monitor updates
from the World Health Organisation
(WHO) with regard to both COVID-19
and any new viruses; their associated
vaccine developments and efficacy
which will be assessed and reported via
the emerging risk framework,
highlighting where there is the potential
to impact the business. Therefore we
have removed this as a principal risk.
New risks
We have recognised two new principal
risks in the period, which are detailed in
the table on the pages that follow, being:
• the increasing divergence of
performance of the hotel business and
the food and beverage business, and
the impact this could have on our
ability to maintain RevPAR premium in
Premier Inn hotels ; and
• the possible impact on our pipeline of
future sites of any stagnation in the
property market.
Although it is not material to the overall
business, we have seen a divergence in
performance of accommodation and
food and beverage, as the expected
bounce back following the removal of
trading restrictions last year has not
materialised fully. The pub restaurant
market is highly competitive, with
changing consumer habits putting
pressure on value-led propositions to
continually invest and update the
offering whilst also seeing significant
cost inflation and labour challenges.
Whitbread’s branded restaurants are
important to our hotel business model
as they provide breakfast and other
meals for hotel guests, which delivers a
RevPAR benefit. There is an increasing
pressure for improvement in this area
and a risk that it will require increasing
levels of focus.
A cyclical risk which is currently
heightened is the stagnation in the UK
property market and the risk that this
will last longer than expected. It is worth
noting that we evaluate any new
property over a 25-year lifecycle and so
we invest through the cycle. However it
is prudent to reflect the current risk
which could impact our ability to
maintain the UK pipeline, putting
pressure on UK growth and returns in
subsequent years. In contrast, this could
also pose an opportunity for Whitbread,
given its strong balance sheet, to access
sites which would not be available in a
more buoyant market.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
61
Strategic priorities Movement vs prior year
1
Grow and innovate in the UK Lower
2
Focus on our strengths to grow in Germany Higher
3
Enhance our capabilities to support long-term growth Level
Strategic
priorities Risk
Movement
vsprior year
Risk
appetite Key mitigations
1
2
3
Uncertain economic outlook
Uncertain UK and Germany economic
outlook with the threat of a recession
which is deep and prolonged,
exacerbated by the impact from wider
macroeconomic trends and current
geopolitical conflicts. This is resulting
in changeable demand; weak public
and consumer confidence; reduced
international travel; structural and
significant inflation widely impacting
our cost base across the business; and
the potential inability to meet
customer demand. Overall, causing
declining cash flows, significant
supply chain disruption, impact on
property valuations, increasing
quantum and cost of borrowing and
astrain on balance sheet strength.
N/A • We currently have a strong balance sheet with
substantial liquidity and a large freehold
property base, giving us the option to enter
into sale and leaseback agreements if required.
• We continue to make good progress with our
efficiency programme and rolling utilities
hedging, to offset inflationary pressures and
maintain rigorous discipline over our capital
and cost spend.
• We have updated our supplier base to include
more local suppliers and opened new
warehousing in Germany to minimise supply
chain disruption.
• There is a rigorous business planning process
in place which considers many scenarios with
appropriate responses.
3
Cyber and data security
Businesses continue to be subject to
continuously evolving methods of
cyber-attack. Data breaches or
operational disruption caused by
malware such as ransomware, can
result in a loss of brand trust,
regulatory fines and an adverse
impact on the value of the business.
Increased
dueto
continuously
evolving
methods of
attack as well
as the volume
of activity
Low • We have a specialist team and robust
Information Security Management in place
with a wide range of proactive and reactive
security controls including up-to-date anti-
virus software across the estate, network/
system monitoring and regular penetration
testing to identify vulnerabilities.
• A continuous security improvement
programme is in place with regular internal and
independent external review of control
effectiveness and Information Security maturity.
• Our mature risk process and proactive threat
modelling and monitoring allow us to identify
and address threats at the earliest opportunity.
• We have solid compliance foundations across
all countries for data protection and effective
collaboration between Information Security
and Data Protection teams to minimise data
risks and ensure compliance with GDPR.
• All IT change and engineering has Information
Security built in by design.
1
2
3
Technology-led business change
andinterdependencies
The risk that we are unable to
successfully deliver major
transformational programmes
particularly under time bound
pressures and realise benefits due to
high volume of change. This
particularly refers to the replacement
of the legacy reservation system in
year at a significant pace, our systems
networks across the estate, other
commercial and people technology
driven transformation programmes,
and Germany expansion whilst
embedding new teams and ways
ofworking.
Increased due
to criticality of
the speed of
change and
operational
impact, as well
as recognising
the significant
investment in
technology
overthe next
five years
High • To help ensure the successful delivery of
change projects, we have enhanced internal
project delivery expertise and capability and
arobust assurance management framework.
Thisis coupled with regular reporting and
discussion at the Risk Working Group,
Executive Committee and Board.
• Utilisation of specialist technology third
partiesand subject matter experts to provide
further independent assurance.
Whitbread Annual Report and Accounts 2022/23
62
Principal risks
Principal risks and uncertainties
Strategic
priorities Risk
Movement
vsprior year
Risk
appetite Key mitigations
2
Germany profitable growth
The risk that international expansion
in Germany is impacted by a
prolonged downturn in the German
economic climate, or a failure to
achieve our market revenue growth
orcost assumptions making it harder
to achieve a level of return in a
timeframe that satisfies stakeholder
expectations. There is some
counterbalance identified within
therisk created by increased
opportunityto acquire sites due
tocompetitor weakness.
Increased in
line with the
increase in
investment
High • We are able to use the deep level of skills and
experience used to build the UK business,
coupled with our strong development team in
country which is able to perform detailed and
ongoing assessments of the German market and
economic fundamentals at both a micro and a
macro level.
• Focus is on developing our strong organic and
M&A pipelines and reducing capital costs
through better buying power and harnessing
efficiencies and synergies with the UK business.
• A monthly executive meeting reviews the
German business in detail, including financial
performance, customer feedback, marketing
andoperations and people, capital and
propertyplans.
1
Increased and extended focus
onfood and beverage proposition
inRestaurants
There is a risk that the current
divergence in performance of
accommodation and food and
beverage drives a disproportional
focus in restaurants by the business.
The pub restaurant market continues
to be highly competitive, with
headwinds from inflation and the
cost-of-living impact on demand
yetto be fully understood. This also
highlights an opportunity to focus
onthe value-led consumer and to
continue to benefit from the
PremierInn customer to drive
incremental RevPAR.
NEW - • New menus and propositions including revenue
opportunities from focus on daypart trading and
premiumisation, and improvement of guest
experience by integrating ground floor spaces.
• Better buying with supply chain and
procurement targets.
• Brand-led initiatives and focus on key events.
• Extensive market research and
customerfeedback.
• Rejuvenation of brands and associated
marketing to optimise spend.
3
Talent, attraction, and retention
The risk of structural changes to the
macro labour market where the
hospitality sector is considered a less
attractive employer, compounded by
immigration regulations for specific
roles such as chefs and housekeeping
and real cost-of-living pressures,
along with the transferability of
functional expertise especially in the
Technology and Digital areas, which
could lead to a smaller talent pool and
low levels of diversity in the senior
leadership team resulting in significant
cost inflation and potential disruption.
Medium • The success of our businesses would not be
possible without the passion and commitment
of our teams. Therefore, team engagement is
fundamental. We monitor this closely through
our annual engagement survey and invest in
ongoing development, wellbeing and
engagement, along with driving our diversity
and inclusion strategy.
• Team retention is a key component of our
WINcard and Annual Incentive Scheme, with
long-term incentive schemes in place for
senior team members and an ongoing review
of high-risk areas such as IT and Digital
remuneration. We regularly benchmark our
reward packages against the market and
havetargeted pay interventions around
skillshotspots.
• We have invested significantly in our Direct
Hire Resourcing team, optimised the model
and continuing to drive employer presence
witha specific focus on youth.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
63
Strategic
priorities Risk
Movement
vsprior year
Risk
appetite Key mitigations
2
3
Third-party arrangements
Whitbread has several key supplier
relationships that help ensure the
efficient delivery of our multi-site and
Support Centre operations, including
IT, food and beverage, distribution and
laundry services. Withdrawal of
services for one or more of these
suppliers or provision of services
below acceptable standards, or
reputational damage as a result of
unethical supplier practices could
cause significant business interruption.
Medium • We continually review our suppliers and
business continuity arrangements, with
demand planning and enhanced supplier
performance monitoring allowing proactive
action when required.
• We expect our suppliers’ practices to be in line
with our values and standards. Suppliers are
thoroughly vetted before we enter into any
arrangements to ensure they are reputable
andthen monitored through our supplier
management arrangements.
• We have business continuity plans in place
forall critical suppliers.
1
2
3
Structural shifts and threat
fromdisruptors
This risk is particularly focused on
customer demand and the Premier Inn
brand strength. The potential for
disruptors to exploit current consumer
price sensitivity due to the
cost-of-living crisis along with the
permanent or long-term structural
shift in working practices, utilising
online meeting technology and the
reduction in international travel
resulting in a loss of market share.
Thecombined impact of these factors
presents a risk to returns, cash flow
and property asset valuations,
particularly of sites located in
metropolitan areas.
N/A • We perform extensive scenario modelling,
fedby regular competitor and market analysis,
allowing us to assess the impact of various
structural shifts on the business and enabling
usto make informed decisions going forward.
• We have Customer and Trading Committees
which track Brand Index, NPS, customer
satisfaction and feedback, and we are
continually improving our digital marketing
toboth leisure and business to
businesscustomers.
• We are continually optimising the customer
proposition around our estate, upgrading
rooms and churning suboptimal sites.
• We are also taking a cautious approach to
further expansion, beyond our existing
pipeline,slowing signing of new sites in the UK
until the environment is more certain, with our
focus shifting to lower risk market share
tradinginitiatives.
Strategic priorities Movement vs prior year
1
Grow and innovate in the UK Lower
2
Focus on our strengths to grow in Germany Higher
3
Enhance our capabilities to support long-term growth Level
Whitbread Annual Report and Accounts 2022/23
64
Principal risks and uncertainties
Principal risks
Strategic
priorities Risk
Movement
vsprior year
Risk
appetite Key mitigations
1
Extended stagnation of the UK
property market slows UK growth
The stagnation in the UK property
market continues for longer than
expected and impacts our ability to
maintain the UK pipeline, putting
pressure on our returns and UK
growth in subsequent years.
This is driven by the slowdown in
developer-led opportunities, due to
weak sentiment and possible fall in
value of land; construction inflation;
increased cost of debt; and
investment yields.
Whitbread could potentially take on
arisk premium to acquire sites by
assuming a future value from sale
andleaseback arrangements.
Opportunities may become available
due to less competition to buy land
and to build out, or developers may
look to release properties in the
shortterm.
NEW N/A • Strong financial covenants make us more
attractive to investment funds as a preferred
hotel tenant.
• Experienced and well-networked Property team.
• Robust capital investment framework with
updated analysis, including yield ranges
(+/-50bps) to support decisions.
• Sale and leaseback yields tested with continual
monitoring of the market.
• Solid committed pipeline of 7,425 rooms across
40 hotels.
1
2
3
Health and safety
Adverse publicity and brand damage
due to death or serious injury as a
result of Company negligence or a
significant incident resulting from
food, in particular the risk from
allergens, fire, terrorism or another
safety failure. This could be due to a
failure in safety standards, building
standards, supply chain provenance,
responsible sourcing, poor hygiene
standards or a direct targeted
terrorism attack, all of which could
lead to adverse publicity, brand
damage and sudden or prolonged
downturn in demand in key markets
and locations.
Low • The safety of our guests and employees is of
paramount importance. NSF, an independent
company, undertakes unannounced health
andsafety audits on sites covering food,
fire,COVID-19, and general health and
safetyrequirements.
• We have robust fire safety policies, procedures
and training for our team members, and work
closely with independent fire safety
consultants, regarding fire safety in our hotels.
• We have stringent food safety and sourcing
policies, with robust traceability and testing
requirements in place in respect of meat and
other products. We invest considerable
resources in employee training along with
allergen information, which is also made easily
accessible both online and at sites.
• Health and safety is a measure on the WINcard
and acts as a hurdle for incentive payments.
Regular health and safety updates are
provided to the Risk Working Group, the
Executive Committee and the Board.
• We invest in ongoing site level training to help
identify hostile reconnaissance activities and
to ensure we have an appropriate response
should such events take place. The executive
team also holds crisis management exercises
to ensure we are prepared for such events.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
65
Strategic
priorities Risk
Movement
vsprior year
Risk
appetite Key mitigations
1
2
3
Environmental, social
andgovernance
As a business, we have an impact on
and are impacted by a wide range of
environmental issues, such as an
inability to meet carbon targets,
natural resource scarcity, and social
trends such as veganism. There is
uncertainty as to how these collective
risks will evolve and the expectations
of our wide stakeholder group to
deliver on our commitments and
embed them within the business
model wholly could impact our
reputation and performance.
There is also the risk of an issue within
the supply chain materialising which
isunethical or lacks traceability,
whichwould impact our
sustainabilitycredentials.
Increased in
recognition of
potential time
bound
pressures
N/A • Our TCFD response helps us to identify and
assess key risks, opportunities and impacts of
climate change to the business.
• Our Force for Good programme covers large
aspects of our ESG agenda, with targets around
emissions, food waste and single-use plastics,
ensuring our accountability for positive change.
• We continue to manage and monitor the use of
proceeds against the projects outlined in our
Green Bond Framework. The proceeds have
been allocated against our green energy,
sustainable procurement and green
buildingprojects.
• We champion inclusivity and improving
diversity across the organisation and have set
eight diversity and inclusion targets to ensure
our teams feel supported and engaged as part
of this process.
• Regular ethical supplier audits combined with
our responsible sourcing policies and initiatives
ensure ethical end to end buying.
Strategic priorities Movement vs prior year
1
Grow and innovate in the UK Lower
2
Focus on our strengths to grow in Germany Higher
3
Enhance our capabilities to support long-term growth Level
Whitbread Annual Report and Accounts 2022/23
66
Principal risks and uncertainties
Principal risks
The Corporate Governance Code requires
that the directors have considered the
viability of the Group over an appropriate
period of time selected by them. The
business planning process reviewed by
the Board, as part of the strategic
planning process, is over a three-year
timeline, with the Board acknowledging
that, despite the improved performance
of the business, inthe current
environment, the certainty of those plans,
including the potential fluctuations in the
global economy and the impact on
competitor and customer behaviour, is far
from certain.
The directors, in making the assessment
that three years was appropriate,
considered the current financial and
operational position of the Group and
carried out a robust assessment of the
principal risks and uncertainties facing
the Group as outlined on pages 60 and
66 of the Annual Report. This included a
review of the potential impact of climate
change and associated regulation across
the viability statement period as well as
the new risks identified in the year,
specifically an increased and extended
focus on the food and beverage
proposition in restaurants and an
extended stagnation of the UK property
market that slows UK growth.
For the purposes of the viability
assessment, the directors considered a
downside scenario in which the UK is
impacted by the uncertain economic
outlook. In this scenario, the Group has
sufficient liquidity to operate within its
existing facilities.
Should the downside scenario on
economic uncertainty be combined with
other principal risks, the impact on the
Group’s financial position and the viability
statement would be dependent on the
Group’s ability to access additional
liquidity. Detailed consideration was
given to the financing and other
mitigating actions that could be taken,
noting the positive outcome of those
actions taken during the COVID-19
pandemic, and the potential to raise
finance and access funds through the
Group’s valuable freehold estate. The
directors believe it is reasonable to
expect that the Group would have access
to further financing and/or the ability to
agree further covenant amendments.
The business’s long-term strategy for
value creation in the UK and
internationally remains unchanged.
Thecombination of compelling
structural opportunities and the
advantages of our unique operating
model should enable the business to
outperform in the UK, and take market
share and capitalise on the material
growth opportunity in Germany. These
strong fundamentals, combined with an
appropriate capital structure, should
drive long-term value. Based upon this
assessment, the directors confirm that
they have reasonable expectation that
the Group will be able to continue in
operation and meet its liabilities as
theyfall due over the three-year
assessment period.
Longer-term prospects
The sections Strategy in Action and
Business Model in the strategic report
describe how the Board has positioned
the Group to take advantage of the
growth opportunities in the markets in
which the business operates and how
the Company is positioned to create
value for shareholders, over the longer
term, taking account of the risks
described in this section of the
AnnualReport.
The strategic report on pages 1 to
67 was approved by theBoard and
signed on its behalf by Chris
Vaughan, General Counsel on
24 April 2023.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
67
Viability statement
At the end of the year, we were
fully compliant with the
requirements of the
2018 UK Corporate Governance
Code (the ‘Code’).
Highlights 2022/23
• Adopted a new remuneration policy
to align our executive directors’
pension contribution to that of
thewider workforce, which ensures
we are now fully compliant with
theCode, with effect from
31 December2022.
• Appointment and induction of
Dominic Paul as Chief Executive.
Read more on pages 81 and 91.
• Organising the induction of our
two new non-executive directors,
Karen Jones DBE and Cilla
Snowball DBE, to the business.
Read more on page 81.
• Enabled shareholders to interact
effectively at our Company’s
hybrid annual general meeting
(AGM), held at Whitbread’s
headoffice.
• Updated and approved the
Nomination Committee’s terms
of reference to explicitly require
the consideration of diversity
andinclusion when overseeing
thedevelopment of a
successionpipeline.
• Conducted a comprehensive
internal Board evaluation.
Read more on pages 80 and 81.
• Review was undertaken of
Whitbread’s Speaking Out
process. An action plan has been
created and submitted to the
Audit Committee.
Board attendance
The Board holds regular scheduled
meetings during the year and on an ad
hoc basis as and when required. During
the year, ten Board meetings were held.
The attendance at meetings by the
directors is set out on this page.
Members of the executive team
attended Board and committee
meetings as appropriate.
Directors Meetings attended %
David Atkins 100
Kal Atwal
100
Horst Baier
100
Alison Brittain
100
Fumbi Chima
1
90
Adam Crozier
100
Frank Fiskers
2
80
Richard Gillingwater
100
Karen Jones
3
100
Chris Kennedy
1
90
Dominic Paul
4
100
Hemant Patel
100
Cilla Snowball
5
N/A
1 The one meeting that Fumbi Chima and Chris Kennedy were unable to attend was an additional meeting held
atshort notice, for which they had prior commitments.
2 The two meetings Frank Fiskers was unable to attend were due to a late flight cancellation and an additional
meeting held at short notice, for which Frank had prior commitments.
3 Karen Jones was appointed to the Board on 9 January 2023 and attended the one meeting that she was eligible
to attend.
4 Dominic Paul was appointed to the Board on 17 January 2023 and attended the one meeting that he was eligible
toattend.
5 Cilla Snowball was appointed to the Board on 24 January 2023. No Board meetings were held between that date
and the end of the financial year.
Priorities 2023/24
• Continuing full compliance with
the Code.
• Conduct a thorough review of the
Company’s articles of association,
for approval at the 2023 AGM.
• Support and oversight of the
growth of the business both in
theUK and internationally.
• Review and act on the
recommendations from the internal
Board evaluation. Read more on
pages 80 and 81.
• Progress towards meeting Board
diversity targets.
• Publication of an updated Code
ofConduct.
Whitbread Annual Report and Accounts 2022/23
68
Governance at a glance
Governance at a glance
Board tenure
The length of time each of the directors
has served on the Board at the date
of the report is shown below.
Board experience
The Board comprises directors with
a broad range of skills and experience.
The chart below provides an overview of
the experience around the Board table.
Board focus areas
The charts below demonstrate the
proportion of the Board’s time spent
in each area.
Ethnic diversity
The chart below shows the
ethnic diversity of the Board.
White
9 75%
Asian
2 17%
Black
1 8%
Gender diversity
The chart below shows the
gender split of the Board.
Men
8 66.7%
Women
4 33.3%
2022/23 2021/22
Performance
and operations 27% 39%
Financial
performance 24% 18%
Corporate
governance 16% 13%
Strategy and
acquisitions 13% 13%
People 13% 12%
Risk 7% 5%
2021/22
2022/23
Cilla Snowball
3 months
Dominic Paul
3 months
Karen Jones
3 months
0-1 years
1-2 years
Hemant Patel
1 year
Kal Atwal
2 years
Fumbi Chima
2 years
7-8 years
Chris Kennedy
7 years
3-4 years
Horst Baier
3 years
Richard
Gillingwater
4 years
5-6 years
Adam Crozier
6 years
David Atkins
6 years
Frank Fiskers
4 years
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
69
10
People
9
Financial
8
Consumer/
retail
6
ESG
6
Digital
6
Travel and
hospitality
6
International
4
Commercial
property
6
Corporate
transformation
Adam Crozier
Chairman
I am pleased to present the
Board’s report on the Company’s
compliance with the UK
Corporate Governance Code.
Thisyear, Whitbread has made
arobust come-back, with strong
performance exceeding that of
pre-pandemic levels. We also
appointed a new Chief Executive
and had two independent
non-executive directors join
theBoard. Set against this busy
backdrop, the Board remains
committed to, and focused on,
maintaining a strong corporate
governance framework.
Our strong governance framework
The Board’s primary objective is to
ensure the long-term success of the
Group. Key to this objective is the
maintenance of a strong governance
structure to generate lasting value for
all our stakeholders. At Whitbread, we
are committed to ensuring the
Company’s actions are in keeping with
our culture, values and strategic goals.
This is achieved by understanding the
critical role that strong corporate
governance plays.
In last year’s corporate governance
report, we provided a full review on
ourcompliance with the UK Corporate
Governance Code. We continue to focus
our governance on complying with the
provisions and applying the principles
in the Code. We hope to demonstrate
throughout this report theBoard’s
emphasis on the Company’s purpose,
culture and strategy, as well as our
relationships with shareholders and
other stakeholders.
Compliance Statement
With the exception of one provision,
relating to the alignment of executive
pension arrangements with the wider
workforce, we were fully compliant with
the Code throughout the year. To rectify
this, we adopted a new remuneration
policy where we aligned executive
directors’ pensions to those ofthe wider
workforce with effect from 31 December
2022. This results in us being fully
compliant with the Code as at the end of
the year. In the pages that follow,
wehave set out how we have applied
the principles set out in the Code.
Culture and purpose
Whitbread is a hospitality business,
focused on ensuring that our customers
have a great experience wherever
theystay or eat across our business.
Weuse a‘Customer Heartbeat’ model
tomeasure and monitor performance
inthis regard, comprising:
• Winning Teams;
• Profitable Growth;
• Force for Good; and
• Everyday Efficiency.
This aligns with our purpose of providing
sustainable long-term value for our
shareholders while delivering a quality
and value for money experience to our
customers. Our values underpin
everything we do, and we aim to be
genuine, confident and committed in
order to reach our goal of becoming the
best budget hotel business in the world.
Whitbread Annual Report and Accounts 2022/23
70
Chairman’s introduction to governance
A strong governance structure
Our stakeholders
We believe that it is important to
understand the views of our
stakeholders in order to build
constructive relationships. In accordance
with Provision 5 of the UK Corporate
Governance Code, Whitbread has
formed a workforce advisory panel,
which we call ‘Our Voice’. This gives
ouremployees an opportunity to shape
strategic plans and major decisions.
Inaddition to this, as Chairman, I hold
governance meetings each year with
major shareholders to listen to their
views and any issues they may have.
During the year, the Board has continued
to consider the interests of a range of
stakeholders. For example, we have
considered on a number of occasions the
relationships with third-party technology
suppliers, as well as suppliers of energy
and food and beverage products. We
have discussed our relations with
Government and key industry bodies, and
we have focused very carefully on our
customers, their feedback on our
performance and their perceptions of our
brand propositions. We have carefully
considered team member retention
issues, and the recruitment and retention
of our staff, together with the levels of
pay and reward for all of our team
members. Further information on our
stakeholder engagement can be found
on pages 55 to 58.
The Board
The Board is committed to regularly
reviewing the skills, experience and
knowledge that it has in place as well
asthose that can be added. It is part
ofthe Nomination Committee’s role to
regularly review the structure, size and
composition of the Board. This helps
ensure there is a balance of skills,
knowledge, independence and diversity
around the table. To assist with this
process, we use an objective matrix to
assess theskills, experience and
knowledge required at the Board table.
Board composition
In January 2023, we were pleased to have
Dominic Paul join the Board as Chief
Executive. Dominic was previously a
member of the Whitbread Executive
Committee and Managing Director of
Costa Coffee for three years, before
serving as CEO of Domino’s Pizza Group
Plc. Alison Brittain stepped down from the
position of Chief Executive in January
2023 and stayed on the Board as a
director until she retired in March after
facilitating a smooth handover and
transition to Dominic.
In January 2023, we were pleased to
welcome Dame Karen Jones and Dame
Cilla Snowball as new independent
non-executive directors. Karen has a
wealth of experience inthe restaurant,
food and hospitality sectors, having
founded Café Rouge andled the
formation of Spirit Group as CEO. Karen
also has strong experience inexecutive
remuneration, having previously chaired
the remuneration committees at ASOS
plc and Booker plc. Cilla has strong
advertising, marketing and digital
experience, having been made a Dame
in 2017 for her services toadvertising,
diversity and equality.
Diversity and inclusion
We are proud of our approach to
diversity and inclusion at Board level.
Three members of the Board identify as
Black, Asian or Mixed Ethnicity. In last
year’s report, we mentioned having
plans to improve the gender diversity
onthe Board and ensure we align to the
recommendations in the FTSE Women
Leaders Review (formerly the Hampton-
Alexander Review). We now have four
women on our Board representing
33.3% and have plans to meet the new
FCA diversity Listing Rule requirements
in the year ahead.
Board evaluation
This year we carried out an internal
evaluation of the Board and its
committees with the support of
Independent Audit. The results of the
evaluation were shared with me and all
other committee chairs, and were also
discussed at the respective Board and
committee meetings. Overall, the
results of the evaluation were positive.
Progress was made in most areas
highlighted in last years’ evaluation.
Further information on the Board
evaluation and areas of focus in the
year ahead can be found on pages 80
and 81.
Adam Crozier
Chairman
24 April 2023
Board leadership and company purpose
The ultimate goal of the Board is to steer the Company
towards achieving its strategic objectives while ensuring
the long-term sustainable success of the Company. The
Company has laid out a clear purpose aligned to its values
(read more on page 2). The strategic report page 12 to 13
explains how the Board achieves its purpose while also
focusing on the people, values and culture of the
organisation.
Composition, succession and evaluation
This year was transformational for the Board at Whitbread,
with a new Chief Executive and two new non-executive
director appointments. Also, it was the first year for our
Chief Financial Officer who was appointed in March 2022.
Please see the Nomination Committee report on pages 90
and 91 for detailed information on the recruitment and
induction process for new Board members.
Division of responsibilities
The Board consists of Chairman, two executive directors
and nine independent non-executive directors, all of whom
have a role to play. Details can be found on page 73.
TheBoard also has the Audit, Nomination, Remuneration
and Disclosure Committees, to further divide the
responsibilities. Details on how each Committee
performsits duties through the year is provided in
therespective Committee reports.
Audit, risk and internal control
The Audit Committee report gives detail on the role and
responsibilities of the Committee and its actions
throughout the year. Please see pages 86 to 89. Also,
thePrincipal risks and uncertainties section on pages 60 to
66 gives more detail on the risk management framework
and the risk assessments carried out.
Remuneration
The remuneration report on pages 92 to 94 has a detailed
overview of the Remuneration Committee’s role and
responsibilities, together with the annual report on
remuneration.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
71
The UK Corporate
GovernanceCode 2018 is
thestandard against which
wemeasure ourselves.
Itisissued by the Financial
Reporting Council (FRC) and
isavailable to viewon its
website, www.frc.org.uk
Further information on our compliance
with the Code can be found in the
tablebelow:
Section 1: Board leadership and company purpose See page
A
Effective and entrepreneurial board to promote the long-term sustainable success of the company,
generating value for shareholders and contributing to wider society
B
Purpose, values and strategy with alignment toculture
C
Resources for the company to meet its objectives and measure performance. Controls framework for
management and assessment ofrisks
D
Effective engagement with shareholders and stakeholders
E
Consistency of workforce policies and practices to support long-term sustainable success
Chairman’s statement 6 and 7
Strategic report 1 to 67
Board engagement with key stakeholders 55 to 58
Shareholder engagement 56
Audit Committee report 86 to 89
Conflicts of interest 82
Section 2: Division of responsibilities See page
F
Leadership of board by chair
G
Board composition and responsibilities
H
Role of non-executive directors
I
Company secretary, policies, processes, information, time and resources
Board composition 74 to 77
Key roles and responsibilities 73
Information and training 81 and 82
Section 3: Composition, succession and evaluation See page
J
Board appointments and succession plans for board and senior management and promotion of diversity
K
Skills, experience and knowledge of board and length of service of board as a whole
L
Annual evaluation of board and directors and demonstration of whether each director continues to
contribute effectively
Board appointments and succession planning 71, 81 and 91
Board composition 74 to 77
Diversity, tenure and experience 69
Board, Committee and director performance evaluation 80 and 81
Nomination Committee report 90 and 91
Section 4: Audit, risk and internal control See page
M
Independence and effectiveness of internal and external audit functions and integrity of financial and
narrative statements
N
Fair, balanced and understandable assessment of the company’s position and prospects
O
Risk management and internal control framework and principal risks company is willing to take to achieve
its long-term objectives
Audit Committee report 86 to 89
Strategic report 1 to 67
Fair, balanced and understandable Annual Report 87
Going concern basis of accounting 87 and 121
Viability statement 67
Section 5: Remuneration See page
P
Remuneration policies and practices to support strategy and promote long-term sustainable success, with
executive remuneration aligned to company purpose and value
Q
Procedure for executive remuneration, director and senior management remuneration
R
Authorisation of remuneration outcomes
Remuneration report 92 to 115
Whitbread Annual Report and Accounts 2022/23
72
The UK Corporate Governance Code 2018
Corporate governance
The Chairman and Chief
Executive have clearly defined
roles which are separate and
distinct. The specific duties and
division of responsibilities
between the Chairman and Chief
Executive have been agreed by
the Board and are set out below,
together with information on the
roles of the Senior Independent
Director, the executive directors,
the non-executive directors and
the Company Secretary.
Chairman
• Leadership of the Board and setting
its agenda, including approval of the
Group’s strategy, business plans,
annual budget and key areas of
business importance
• Maintaining appropriate contact with
major shareholders and ensuring that
Board members understand their
views concerning the Company,
especially on governance
• Ensuring a culture of openness and
debate around the Board table
• Leading the annual evaluation of
theBoard, the committees and
individual directors
• Ensuring, through the General
Counsel, that the members of
theBoard receive accurate, timely
andclear information
Chief Executive
• Optimising the performance
oftheGroup
• Day-to-day operation of the business
• Reviewing and proposing strategy
• Ensuring effective communication
with shareholders and employees
• The creation of shareholder value
bydelivering profitable growth
andagood return on capital
• Ensuring the Company has a strong
team of high-calibre executives, and
putting in place appropriate
management succession and
development plans
• Leading and motivating a large
workforce of people
Senior Independent Director
• The Senior Independent Director
provides a sounding board for the
Chairman and supports him in the
delivery of his objectives. The Senior
Independent Director is available
toshareholders if they have concerns
which the normal channels have
failedto resolve, or which would
beinappropriate to raise with the
Chairman or the executive team.
Healso leads the annual evaluation
ofthe Chairman on behalf of the
otherdirectors
• The Senior Independent Director can
be contacted directly or through the
General Counsel
Executive directors
• The executive directors are
responsible for the day-to-day
runningof the business and for
implementing the operational and
strategic plans of the Company
Non-executive directors
• The non-executive directors play a
key role in constructively challenging
and scrutinising the performance of
the management of the Company
andhelping to develop proposals
onstrategy
Company Secretary
At Whitbread the General Counsel acts
as the Company Secretary. The duties
performed in the Company Secretary
element of the role include the following:
• Advising the Board on legal
matters,corporate governance
andBoard procedures
• Arranging and minuting the Board
andcommittee meetings
• Providing support to the Chairman,
the Chief Executive and the Board
committee chairs
• Enabling and supporting
communication between directors
andsenior management to the
Boardand committees
Audit
Committee
Read more
on pages 86 to 89.
Nomination
Committee
Read more
on pages 90 to 91.
Remuneration
Committee
Read more
on pages 92 to 115
Executive
Committee
Read more
on page 78
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
73
Board responsibilities
The Board
The Board is responsible for the long-
term success of the Company and ensures
that there are effective controls
in place which enable risk to be assessed
and managed. All Board members
have responsibility for strategy,
performance, risk and people.
We believe that it is vital for
theBoard to include a diverse
range of skills, backgrounds
andexperiences, to enable a
broad evaluation of all matters
considered and to contribute to a
positive culture of mutual respect
and constructive challenge.
The mix of skills and experience
represented on the Board is outlined
onpage 69.
Adam Crozier
Chairman
1
N R
Richard Gillingwater
Senior Independent Director
4
N R
Dominic Paul
Chief Executive
2
Hemant Patel MBE
Chief Financial Officer
3
David Atkins
Independent
non-executive director
6
N R A
Kal Atwal
Independent
non-executive director
5
N R
Whitbread Annual Report and Accounts 2022/23
74
Board of Directors
Corporate governance
Key
A
Audit Committee
N
Nomination Committee
R
Remuneration Committee
Committee Chair
Committee member
Frank Fiskers
Independent
non-executive director
8
R N A
Fumbi Chima
Independent
non-executive director
7
N A
Chris Kennedy
Independent
non-executive director
12
A N
Dame Cilla Snowball
Independent
non-executive director
11
N A
Dame Karen Jones
Independent
non-executive director
10
N R
Horst Baier
Independent
non-executive director
9
N A
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
75
1
Adam Crozier
Chairman
N
 
R
Date of appointment to the Board:
April 2017
Date of appointment as Chairman:
March 2018
Age: 59
Experience:
Adam was Chief Executive of ITV plc
from 2010 to 2017. During his time as
Chief Executive, ITV was transformed into
a global media player of scale, delivering
consistently good growth andwith
increasing emphasis on international
content creation and distribution.
Prior to ITV, Adam was Chief Executive
ofRoyal Mail, where he led its
modernisation and transformed it from
aheavily loss-making position to
profitability. He has also been CEO of The
Football Association and joint CEO of
Saatchi & Saatchi. Adam has served as
Chairman of Vue International and ASOS.
External appointments:
• BT Group plc (Chairman)
• Great Ormond Street Hospital
Discovery Appeal (Trustee)
• Kantar Group (Chairman)
4
Richard Gillingwater
Senior Independent Director
N
 
R
Date of appointment to the Board:
June 2018
Age: 66
Experience:
Richard retired as Chairman of Janus
Henderson Group plc at the end of 2022.
He served as a non-executive director of
Helical PLC and was former Pro-
Chancellor of the Open University.
Richard also served as Chairman of SSE
PLC from 2015 to 2021.
Richard is a highly experienced
executive and has spent much of his
career in corporate finance and
investment banking with Kleinwort
Benson, BZW and Credit Suisse First
Boston, before he moved out of banking
and became Chief Executive of the
Shareholder Executive and then Dean of
Bayes Business School.
External appointments:
• Spirax-Sarco Engineering plc (Senior
Independent Director)
• Wellcome Trust (Chair of the
Investment Committee)
2
Dominic Paul
Chief Executive
Date of appointment to the Board:
January 2023
Age: 51
Experience:
Dominic is an experienced senior
executive, with a very strong operational
and commercial record in the travel,
leisure and hospitality sector, with a track
record of growing and transforming
brands both in the UK and internationally.
Dominic was previously a member of the
Whitbread Executive Committee and
Managing Director of Costa Coffee for
three years, before serving as CEO of
Domino’s Pizza Group Plc, where he led
the business through the COVID
pandemic, and delivered a strong period
of sales growth and value creation whilst
aligning stakeholders behind a growth
strategy for the future.
Previously, Dominic was Senior Vice
President of International with Royal
Caribbean Cruise Line, where he led
thebusiness through a period of
stronggrowth.
5
Kal Atwal
Independent non-executive
director
N
 
R
Date of appointment to the Board:
March 2021
Age: 51
Experience:
Kal has over 13 years’ executive committee
experience at BGL Group Limited in
various roles, including Founding Managing
Director of comparethemarket.com. Kal
was also Chair of SimplyCook, a tech-
enabled meal kit subscription service,
prior to its sale to Nestlé.
Kal began her career at EY in Madrid, after
which she held a number of operational and
strategic roles with Southern Derbyshire
Chamber and Northcliffe Media Ltd.
Kal is an experienced strategic leader
with international experience in start-up,
scale-up, fintech and digital businesses.
External appointments:
• Admiral Financial Services Ltd
(non-executive director)
• Royal London Group
(non-executive director)
• WH Smith PLC (non-executive director)
• OSB Group PLC (non-executive director)
• SimplyCook Ltd (Board adviser)
3
Hemant Patel MBE
Chief Financial Officer
Date of appointment to the Board:
March 2022
Age: 53
Experience:
Hemant joined Whitbread in 2018 as UK
Finance Director, having previously been
Finance Director of Greene King Pub Co.
He also worked at Asda-Walmart for 11
years, carrying out various management
roles including Commercial Finance
Director, Director of Own Label and
Director of Strategy. He also had several
finance roles over six years at Mars, Inc.
He was Chair of the Royal Armouries
Museum and was awarded an MBE for
services to museums and heritage in the
2020 birthday honours list. He also
received the Arts and Business Individual
of the Year award in 2007 for his work
with Interplay Theatre.
External appointments:
• DCMS (non-executive director)
6
David Atkins
Independent non-executive
director
N
 
R
 
A
Date of appointment to the Board:
January 2017
Age: 57
Experience:
David was Chief Executive of
Hammerson plc, a British property
development and investment company,
and one of the UK’s largest listed
property companies. He stepped down
from the position in November 2020.
He is also the former Chairman and
executive board member of the
European Public Real Estate
Association(EPRA) and past President
and a former committee member of
Revo (formerlyBCSC).
External appointments:
• Reading Real Estate Foundation
(director and trustee)
• OCS Group Ltd
(non-executive director)
• Landmark Group Holdings Ltd (Chair)
Whitbread Annual Report and Accounts 2022/23
76
Corporate governance
Board of Directors
7
Fumbi Chima
Independent non-executive
director
N
 
A
Date of appointment to the Board:
March 2021
Age: 48
Experience:
Fumbi is Chief Information Officer at
BECU, and previously held similar roles
at adidas, Fox Network Group, Burberry,
Walmart Asia’s business operations and
American Express global corporate
technologies. Fumbi has more than
25years of leadership and technology
experience in both the retail and
financial sectors.
In addition to technology, Fumbi’s
background showcases a dedication
todiversity, women’s empowerment
andinclusion.
External appointments:
• BECU (Chief Information Officer
andExecutive Vice-President)
• Africa Prudential
(independent director)
• Women at Risk International
Foundation (director)
• The Azek Company (board member)
• Ted Baker PLC (non-executive director)
10
Dame Karen Jones
Independent non-executive
director
N
 
R
Date of appointment to the Board:
January 2023
Age: 66
Experience:
Karen is Senior Independent Director
atDeliveroo plc and Chair at both
Hawksmoor and Mowgli Street Food,
having previously served as Executive
Chair at Prezzo and Senior Independent
Director at Booker plc.
Karen has a wealth of experience in the
restaurant, food and hospitality sectors,
having founded Café Rouge and led the
formation of Spirit Group as CEO. Karen
also has strong experience in executive
remuneration, having previously chaired
the remuneration committees at ASOS
plc and Booker plc.
External appointments:
• Deliveroo plc (Senior Independent
Director)
• The Crown Estate
(non-executive director)
• Hawksmoor (Chair)
• Mowgli Street Food (Chair)
8
Frank Fiskers
Independent non-executive
director
R
 
N
 
A
Date of appointment to the Board:
February 2019
Age: 61
Experience:
Frank spent ten years from 2007 as
President & CEO of Scandic Hotels
Group and took the company public
in2015. He has experience in a number
of countries in Europe and Africa.
Frank has served as Chairman of
Norstedt and Akademibokhandln.
Hehas also served as a board member
of the Swedish Hospitality Employers
Association, Dame Thomas Foundation
for Young People, and the British
Hospitality Association.
External appointments:
• Shurgard Self Storage SA (non-
executive director)
11
Dame Cilla Snowball
Independent non-executive
director
N
 
A
Date of appointment to the Board:
January 2023
Age: 64
Experience:
Cilla has a wealth of advertising,
marketing and digital experience, having
been made a Dame in 2017 for her
services toadvertising, diversity and
equality.
Cilla started her career in advertising
and served as Group Chief Executive
atAbbott Mead Vickers BDDO Ltd
from2006 to 2018. Cilla is also on the
BBDO Worldwide board, and Chair of
both the Advertising Association and
the Women’s Business Council.
External appointments:
• Derwent London plc
(non-executive director)
• Genome Research Ltd
(non-executive director)
• Wellcome Trust (Governor)
• University of Birmingham
(CouncilMember)
9
Horst Baier
Independent non-executive
director
N
 
A
Date of appointment to the Board:
November 2019
Age: 66
Experience:
Horst was Chief Financial Officer of TUI
AG, the London-listed Anglo-
German leisure travel group for eight
years until the end of September 2018.
During his time at TUI AG, Horst played
an important role in TUI’s transformation
from a tour operator to a global provider
of holidays.
External appointments:
• Bayer AG (member of the
supervisoryboard)
• DIAKOVERE GmbH (member
ofthesupervisory board)
• Ecclesia Holding GmbH (member
ofthe supervisory board)
12
Chris Kennedy
Independent non-executive
director
A
 
N
Date of appointment to the Board:
March 2016
Age: 59
Experience:
Chris is Chief Financial Officer and
ChiefOperating Officer of ITV plc,
whichhe joined in February 2019.
Prior to this, Chris held CFO roles with
Micro Focus International plc, ARM
Holdings plc and easyJet plc, having
previously spent 17 years in a variety
ofsenior roles at EMI.
Chris was voted FTSE 100 CFO in 2015.
External appointments:
• ITV plc (Chief Financial Officer)
• The EMI Group Archive Trust (Trustee)
• Great Ormond Street Hospital Trust
(Trustee)
Key
A
Audit
Committee
N
Nomination
Committee
R
Remuneration
Committee
Committee
Chair
Committee
member
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
77
Governance
The Executive Committee
meetson a fortnightly basis
andis chaired by Dominic Paul
It has authority to manage the day-to-
day operations of the Group’s
businesses, with the exception of those
matters reserved for the Board, within
the financial limits set by the Board.
The Committee’s responsibilities include:
• formulation of strategy for
recommendation to the Board;
• management of performance in
accordance with strategy and
budgets;
• talent and succession;
• risk management;
• capital investment decisions (where
Board approval is not required);
• cost efficiency, procurement and
organisational design;
• reputation and stakeholder
management;
• culture, values and sustainability;
• health and safety; and
• customer engagement and
productdevelopment.
Dominic Paul
Chief Executive
Hemant Patel
Chief Financial Officer
Rachel Howarth
Chief People Officer
Chris Vaughan
General Counsel
Simon Jones
Managing Director
forPremier Inn
andRestaurants UK
and Global Commercial
Director
Nigel Jones
Group Operations
Director
Simon Ewins
Managing Director, UK
Hotels & Restaurants
Mark Anderson
Managing Director,
Property and
International
Rachel Howarth is Chief People Officer,
responsible for Human Resources across
the organisation in the UK and Germany,
and the opportunity pillar as part of our
Force for Good programme.
Nigel Jones leads Whitbread’s strategy
and operations for Technology,
Procurement & Supply Chain and the
overall Whitbread transformation plan,
as well as having responsibility for safety
and security across the business.
Mark Anderson is responsible for the
acquisition, development and
management of Whitbread’s substantial
property portfolio and in addition he
leads Whitbread’s International
businesses, overseeing development and
operations in Germany and the Middle
East, and M&A.
Simon Jones leads the UK business, for
both Premier Inn andWhitbread’s
portfolio of restaurant brands. Simon is
responsible for the performance of the
UK business and is directly accountable
for hotel and restaurant operations,
brandmarketing and communications,
proposition development, revenue
management and pricing, F&B
development and trading. Simon also
leads the commercial, brand and
marketing agenda in Germany.
Simon Ewins is responsible for all Hotel
& Restaurants portfoliooperations
across the UK and Ireland and
represents a very large proportion of the
Whitbread workforce.
Chris Vaughan has been General Counsel
since joining the Company at the end of
2015. He is also the Company Secretary
and is the Executive Committee member
responsible for Whitbread’s sustainability
programme, Force for Good.
Biographical details for Dominic Paul and
Hemant Patel can be found on page 76.
Whitbread Annual Report and Accounts 2022/23
78
Executive Committee
Corporate governance
In advance of each Board
meeting, a set of Board papers,
including monthly financial and
trading reports, is circulated so
that directors have sufficient
time to review them and arrive
at the meeting fully prepared.
The Board has a rolling forward agenda
which sets out matters tobe considered
throughout the year ahead. One full day
every year is dedicated to strategy.
Following these sessions, the Board
agrees the significant topics to be
discussed atitsmeetings during the year.
The rolling agenda is then updated to
ensure that there is a structured approach
to theconsideration of topics and that
recurring issues are evenlyspread across
the calendar. The Board gives its attention
to each area of the business in turn so that
a strongunderstanding of the entire
Company is maintained. The rolling
agenda is regularly reviewed and updated,
and iscirculated to the Board quarterly.
The agenda for each Board meeting is
agreed with the Chairman and the Chief
Executive so that current events and
potential future issues can be discussed
alongside the regular reports. Standard
items for each meeting are a review of
progress on action points, reports from
the Chief Executive, the Chief Financial
Officer, the Chief People Officer and the
General Counsel, and a KPI pack. The
General Counsel keeps minutes of the
meetings and produces a list of agreed
actions for each meeting.
At the meetings during the year, the
Board discharged its responsibilities and
considered a range of matters as shown
onthe right.
Board processes and topics to be
discussed are continually reviewed to
ensure that the correct focus is given to
the key issues highlighted at the
strategy day.
The Chairman meets with the non-
executive directors without the
executive directors present mostly
around Board meetings.
The Senior Independent Director meets
annually with all non-executive directors
to review the performance of the
Chairman. A review of the Board was
carried out during the year.
There is a schedule of matters reserved
exclusively to the Board; all other
decisions are delegated to management.
Those matters reserved exclusively to
the Board include:
• approval of Group financial statements
and the preliminary announcement of
half-year and full-year results;
• approval of and changes to the
Group’s capital structure, strategy, the
annual budget and the Group’s
business plan;
• approval of capital projects,
acquisitions and disposals valued at
over the limit set out in the matters
reserved to the Board;
• approval of interim dividends and
recommendation of final dividends;
and
• establishment of Board Committees.
Q2
• Q1 trading update
• Commercial and operational
update
• Germany acquisition
• Network planning
• Annual general meeting
Q4
• Group strategy
• Operational update
• Germany update
• Budget review
• People strategy
• Talent and succession update
Q1
• Approval of year-end
documentation
• Risk management and health
and safety report
• Force for Good
• Premier Inn and F&B update
and strategy discussions
• German acquisition
• Update of the Group’s
reservation and customer
management system
• Defence considerations
• External board evaluation
Q3
• Germany update
• Commercial and operational
update
• 2022/23 interim results
• Cyber security update
• Capital structure and
financing
• German acquisition
• Risk management and health
and safety report
• ESG update
• People strategy
Standing agenda items
• Chief Executive’s report
• Chief Financial Officer’s
report
• General Counsel’s report
• Chief People Officer’s report
• Premier Inn & Restaurants MD
report
• Property & International MD
report
• Approval of capital projects
• KPI pack
Board agenda 2022/23
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
79
Board activities during the year
Board and committee review cycle
Board performance evaluation
An evaluation of the Board, its
committees, individual directors
andtheChairman is carried out each
year. Last year, an externally facilitated
Board evaluation was carried out, so
thisyear we have undertaken an
internally facilitated evaluation.
2021/22 external evaluation
The following recommendations around four broad areas of culture, governance,
connection with the business, and employee engagement were accepted by the
Board during its discussion on the evaluation last year. The progress against each
recommendation is provided in the table below:
Recommendations from 2021/22 Progress made in 2022/23
Culture:
Plan more meetings out in the
business
The Board visited various sites as part ofBoard
meetings, most notably inGermany. Further,
inductions and otherindividual visits to sites
were arranged in the last year
Governance:
Schedule more sessions for the
Chairman and non-executive
directors to meet
Several formal and informal meetings were
heldbetween the Chairman and the non-
executive directors, mostly around Board
meetings
To consider a further senior
female non-executive director
appointment
Two female non-executive directors were
appointed to the Board in January 2023,
DameKaren Jones and Dame CillaSnowball
To consider repeating the
induction programme after three
years on the Board
The Board has discussed this and a plan has
been laid out for those directors that choose
to repeat the induction programme after
threeyears
Connection with the business:
Agreed to consider an informal
mentoring programme with
non-executive directors and
senior managers; and also to
have regular check-ins with
Executive Committee members
A formal mentoring programme has not
beenestablished, but relationships are
strongbetween the non-executive directors
and Executive Committee members, and there
are linksonaninformal basis
Employee engagement:
Agreed to review how the
Boardinteracts with the
widerworkforce
The Board met with team members during their
site visits in Germany and also regularly
engages with Executive Committee members
and senior executives
2022/23 internally facilitated
review – methodology
During the year, the Board
conducted an annual evaluation ofits
performance and that of itsthree
committees by using an online
evaluation tool provided by
Independent Audit Limited, an
independent company which has
noother links to Whitbread or its
directors. Each director completed a
questionnaire in respect of the Board
and the respective committees of
which they were a member. The
General Counsel collated the
responses of the evaluation, along
with benchmarking data from other
boards that had used the same
evaluation questionnaires, and the
Chairman received an executive
summary, highlighting the key
outcomes, as did each of the
Committee Chairs. Separate reports
were then presented to the Board
and each committee for discussion.
Overall summary and recommendations
Overall, the results were very positive,
with no major issues or concerns raised.
The scores reflect a strong approach
tostrategy and oversight of
performance, a positive culture and
dynamic around the Board table, and
aBoard which is managed effectively.
There is a recognition of progress in
some areas flagged last year, most
notably on succession planning. Some
other areas have been highlighted
specifically this year:
• Technology, and how technology can
be used as a competitive advantage
• Greater engagement withemployees
• A wish to spend more time in
thebusiness
A summary of the key points is
asfollows:
Strategy, risk, finance
Overall, the feedback was positive
inthis area. The Board responded
positively to the goal setting process,
having a clear picture of the big risks
and uncertainties, and assessing the
financial health of the Company.
Feedback also reflected the fact
thatwith a new Chief Executive there
would berenewed focus on strategy
and growth.
While there were no topics that
wereidentified as being poorly
managed, there weresome areas
forimprovement – in particular,
thefollowing:
• Consideration of the big trends
which are affecting the business
• Technology and cyber: one issue
which was raised was the need for
better understanding of the
strategic opportunities and risks
emerging from technology
Year 1
(Financial year 2020/21)
Internal review
Year 2
(Financial year 2021/22)
Externally facilitated review
Year 3
(Financial year 2022/23)
Internal review
Whitbread Annual Report and Accounts 2022/23
80
Board evaluation
Corporate governance
• There was a suggestion that a
ransomware exercise should
beundertaken
People, culture and stakeholders
The feedback was positive overall in
areas including effective leadership,
People strategy and giving
consideration to stakeholders.
Directors reflected on being in a
reasonably stable place with the
leadership team and being happy
with the talent assessment process
with respect to Board inductions.
The feedback also suggested that
more work could be done in certain
areas, and in particular more time
dedicated to ESG issues, the question
of how to incorporate ESG into
strategic decision making and
maintaining and improving the
Board’s connection with the business.
The main area for improvement
related to the engagement of the
Board with employees. There is a keen
desire from various Board members to
engage directly, both formally and
informally, with employees. Having
more site visits and spending more
time out in the business to seek
feedback and engagement from team
members was desirable.
Board composition, information and
development
The feedback under this section was
positive overall, especially in relation to
the recent recruitment processes for the
Chief Executive and non-executive
directors. The recruitment process had
encouraged engagement from all
directors, and it was seen to have been
an open and transparent process that
was thorough and well-handled.
Feedback on thestructure of Board
papers was positive. Some suggestions
for improvement included consistently
adding summaries to allow quick
identification of matters requiring focus,
putting more detail inappendices and
more clearly positioning papersso the
Board fully understands the purpose.
Meetings, dynamics and committees
The overall feedback was positive
around how meetings work and the level
of engagement in the meetings as well
as trust and openness in the Board
discussion. Meetings are well chaired
and the level of support provided has
been good.
The management of the agenda
atBoard meetings has been raised
again. Meeting agendas can be
quitelong, and there is a need to
make sure that enough time is spent
on the most important matters.
Next steps
The Board was asked to consider the
themes raised in this report, and
agree actions for the following year
to address the issues which arise from
these themes, in particular the
following areas:
• More channels for direct formal
andinformal engagement directly
with employees. Planning more site
visits within the UK and Ireland and
factoring some time to directly
engage with employees during
thistime
• More focus around the benefits
which technology can bring, how it
could drive strategy, and what risks
and opportunities it poses
• Managing the agendas for
eachmeeting
Insurance cover
The Company has appropriate directors’
and officers’ liability insurance in place.
Inaddition to this, the Company provides
an indemnity for directors against the
costs of defending certain legal
proceedings and claims over and above
those covered by insurance. These are
reviewed periodically.
Skills matrix on Board and committees
Every effort has been made to ensure
the Board and its committees have the
appropriate balance of skills, experience,
diversity, independence and knowledge
of the Company to enable them to
discharge their responsibilities
effectively. After assessing
independence against the Code, the
Board considers all non-executive
directors to be independent in
judgement and character, and also
considered the Chairman to be
independent on appointment.
During the year, there have been
anumber of changes to the Board.
Hemant Patel was appointed to the
Board with effect from 21 March 2022 as
Chief Financial Officer. Dominic Paul
joined the Board as Chief Executive on
17January 2023 and Alison Brittain
stepped down from the Board on
2 March 2023. Dame Karen Jones and
Dame Cilla Snowball joined the Board as
independent non-executive directors on
9 January 2023 and 24 January 2023
respectively.
Time commitments of non-executive
directors
On behalf of the Board, the Nomination
Committee has reviewed the extent of
other interests of the non-executive
directors. The Board is satisfied that the
Chairman and each of the non-
executive directors commit sufficient
time to their duties and fulfil their
obligations to the Company. No
executive director has taken on more
than one other non-executive
directorship in a FTSE 100 company.
Training and development
Throughout the year, Board members
attended various deep dive sessions
across a range of topics, to hone their
skills and expertise. Some of the topics
covered in these training sessions were:
• Information security and digital
transformation
• Audit Committee Chair updates
• BEIS reform agenda
• Updates on financial and non-financial
reporting
• Risks and controls
• Education session on ESG governance
All directors have access to independent
professional advice at the Company’s
expense. Directors serving on the Board
and committees confirmed that they
were satisfied that they received
sufficient resources to enable them to
undertake their duties effectively. Each
director has access to the General
Counsel for advice on governance.
The General Counsel prepares a monthly
report that includes updates on
secretariat and legal matters, along with
governance, compliance and insurance.
This report is presented and discussed
at each Board meeting.
Induction process
On appointment, all directors receive a
full and formal induction that is tailored
to their specific needs.
Dominic Paul joined the Board as
ChiefExecutive in January 2023.
AlisonBrittain remained on the Board
until March 2023 to ensure a smooth
transition and handover process. As
part of Dominic’s induction, he met with
the Company’s brokers, investment
banks, key shareholders and analysts,
and has met with Slaughter & May,
corporate legal advisers, to understand
the role and responsibilities of being a
PLC director.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
81
A detailed induction plan was developed
for Dominic and this was carried out
over the first two months of him joining
Whitbread. He met with all members of
the Board, all members of the Executive
Committee, conducting site visits in the
UK and Germany to gain a better
understanding of the business. In
addition to site visits, Dominic spent
several days working on site to
understand the operational side of the
business. Dominic met with the Germany
management team and heads of
departments in the UK.
Both Karen and Cilla joined the Board
inJanuary 2023 and had tailor-made
induction programmes based on their
Board and committee roles and their
specific Board skill matrix. As part of their
induction, meetings were arranged with
other Board colleagues and with a
number of senior leaders from across the
business to get a better understanding of
Group strategy, key issues and how the
Company is run. They were given access
to all historic Board and committee
meeting papers. They also met with key
external stakeholders, including the
auditors, brokers, investment banking
advisers and remuneration consultants.
They also conducted site visits to
betterunderstand the operational
sideofthe business.
Conflicts of interest
Directors are required to disclose any
conflicts of interest immediately as and
when they arise throughout the year. In
addition, a formal process is undertaken
in January each year when all directors
confirm to the Board details of their
external interests, including any other
directorships which they hold.
These are assessed by the Board to
determine whether the director’s ability
to act in the best interests of the
Company could be compromised. If there
are no such potential or actual conflicts,
the external interests are authorised by
the Board. All authorisations are for a
period of 12 months. No director is
counted as part of a quorum in respect of
the authorisation of his or her own
potential conflict. It is recognised that all
organisations are potential customers of
Whitbread and, in view of this, the
Boardauthorises all directors’ current
external directorships.
The Board also assesses the
commitments of all the directors to
ensure they have sufficient time to
dedicate to Whitbread.
Privacy
Our data protection policies, guidelines
and processes set a globally applicable
privacy and security standard for the
Company and regulate the sharing of
information both internally and
externally. Our data protection steering
group will continue to drive awareness
and monitor GDPR compliance through
ongoing training and governance.
Anti-corruption and anti-bribery
Whitbread is strongly opposed to any
form of corruption or bribery. We
recognise that it impacts societies in
many negative ways. Our reputation is
built on trust: the trust of our customers,
our people, our partners and suppliers,
our investors and the communities we
serve. Our anti-corruption and anti-
bribery policies apply our strict
standards worldwide and are reinforced
through training and our day-to-day
conduct. We encourage all with
concerns to speak out and have
facilitated this further through our
Speaking Out helplines, enabling
reporting of concerns on a named or
anonymous basis.
Shareholder relations
In accordance with the Code, the Board
recognises that it has responsibility for
ensuring that a satisfactory dialogue
with shareholders takes place and any
major shareholders’ issues and concerns
are communicated to the Board
through the Chairman. The Chairman
holds a round of meetings each year
with major shareholders to obtain
feedback on their views and any issues
of concern, and these meetings took
place during 2022/23.
The Company communicates with both
the institutional and private shareholders
through a number of different means. All
directors take part in the AGM and
shareholders are able to submit
questions to directors, including
Committee Chairs throughout the year.
The Remuneration Committee Chair
engaged with shareholders extensively
on matters of remuneration policy,
implementation and plans for 2022/23.
The Chair had meetings with major
shareholders post publishing the annual
report and prior to the AGM in June
2022. The Nomination Committee Chair
engaged extensively with shareholders
around Chief Executive’s succession, the
Board’s composition and diversity, and
strategy among other matters.
Further information on shareholder
engagement can be found on pages 55
to 58.
The annual general meeting
The AGM provides all shareholders with
the opportunity to communicate directly
with the Board and the Board
encourages their participation at the
meeting, whether in person or via the
online platform.
In accordance with the Code, the Notice
of AGM and related papers are usually
sent to shareholders at least 20 working
days before the meeting. The Company
proposes a separate resolution on each
substantially separate issue including a
specific resolution to approve the
Annual Report and Accounts. For each
resolution, proxy appointment forms
provide shareholders with the option to
vote in advance of the AGM. All valid
proxy votes received for the AGM are
properly recorded and counted by
Whitbread’s registrars.
All voting by shareholders at this year’s
AGM will be by poll. The voting results,
including proxy votes received, will be
displayed on a screen at the end of the
meeting. In addition, the audited poll
results will be disclosed on the
Company’s website following the
meeting and announced through the
regulatory news service.
Share capital
The information that is required by DTR
7.2.6 relating to the share capital of the
Company can be found within the
directors’ report on page 116.
Statement of the directors in respect of
the Annual Report and Accounts
As required by the Code, the directors
confirm their responsibility for preparing
the Annual Report and Accounts, and
consider that the Annual Report, taken
as a whole, is fair, balanced and
understandable and provides the
information necessary for shareholders
to assess the Company’s position and
performance, business model and
strategy. Further detail on how this
conclusion was reached can be found in
the report of the Audit Committee on
page 87.
Going concern
The directors’ going concern statement
can be found in the directors’ report on
page 120.
Viability statement
The viability statement can be found on
page 67.
Business model and strategy
Information on the Group’s business
model and the strategy for delivering
the objectives of the Company can be
found on pages 12 to 15.
Whitbread Annual Report and Accounts 2022/23
82
Corporate governance
Board Committees
The Board is supported by four
committees; the Audit Committee, the
Nomination Committee, the
Remuneration Committee and the
Disclosure Committee. Their terms of
reference are reviewed regularly and
updated in line with best practice. They
are available in full on the Company’s
website at www.whitbread.co.uk/
governance/reports-policies. A detailed
report from the Chairman of the
Remuneration Committee is set out on
pages 92 to 115. Reports from the Audit
and Nomination Committees can be
found on pages 86 to 91.
Accountability and internal
control
Internal control and risk management
The Board is responsible for the Group’s
systems of internal control and risk
management, and for reviewing their
effectiveness. These systems are
designed to manage rather than
eliminate risk of failure to achieve
business objectives. They can only
provide reasonable, and not absolute,
assurance against material misstatement
or loss.
The Board has established an ongoing
process for identifying, evaluating and
managing the Group’s principal risks. This
process was in place throughout the
2022/23 financial year and up to the date
of this report. The process is reviewed by
the Board and accords with the internal
control guidance for directors in the
Code. A report of the principal risks,
together with the viability statement, can
be found on pages 60 to 67.
Risk management
• The Board identifies the principal risks
of the Company on a regular basis and
throughout the year it reviews the
actions in place to mitigate the risks
together with assurance and
monitoring activity. The analysis
covers business and operational risks,
health and safety, financial, market,
operational and reputational risks
which the Company may face as well
as specific areas identified in the
business plan and budget process.
• All major capital and revenue projects,
together with significant change
programmes, include the
consideration of the risks involved and
an appropriate action plan.
Controls
• The Company reviews and confirms its
level of compliance with the Code on
an annual basis.
• The matters reserved to the Board
require that major projects and
programmes must have specific
Boardapproval.
• Limits of delegation and authority are
prescribed to ensure that the
appropriate approvals are obtained if
Board authority is not required to
ensure appropriate segregation of
tasks.
• Group financial policies, controls and
procedures are in place and are
regularly reviewed and updated.
• The Whitbread Code of Conduct,
setting out required levels of ethics
and behaviour, is communicated to
employees and training is provided.
An externally hosted whistleblowing
system is also available.
• The Code of Conduct makes reference
to specific policies and procedures
which have to be followed.
• Employees are required to undertake
tailored training on risk areas including
IS security, data protection, anti-
bribery and anti-trust law.
• Management is responsible for
ensuring the appropriate maintenance
of financial records and processes that
ensure that financial information is
relevant, reliable, in accordance with
applicable laws and regulations and is
distributed both internally and
externally in a timely manner.
• A review of the financial statements is
completed by management to ensure
that the financial position and results
of the Group are appropriately
reflected.
• All financial information published by
the Group is subject to the approval of
the Audit Committee and the Board.
• An annual review of internal controls is
undertaken by the Board with the
assistance of the Audit Committee.
Audit and Assurance
• The Audit Committee approves the
audit programme which ensures that
the significant areas of risk identified
are monitored and reviewed.
• The programme and the results of the
internal audits are regularly assessed
during the year.
• The Audit Committee reviews the
major findings from both Internal and
External Audits.
• Internal audits are carried out under
the control of the Head of Internal
Audit. The reports are reviewed by the
Audit Committee and, on a monthly
basis, by the Executive Committee to
ensure that the actions required to
address issues identified are
implemented.
• The Head of Internal Audit reports
annually to the Audit Committee on
the effectiveness of operational and
financial controls across the Group.
• Deloitte LLP, the Company’s external
auditor, reviews and reports on the
significant issues identified in its
auditreport.
• An internal control evaluation process
is overseen by the management team
which assesses the level of compliance
with the controls, policies and
processes and the results are reviewed
and tested on a sample basis by the
internal audit team.
• Post-completion reviews of major
projects and investments are carried
out and reported on to the Board.
• Internal Audit provides independent
programme assurance over strategic
programmes, as part of its overall audit
plan and as required by the Board,
leveraging third-party subject matter
experts where appropriate, e.g. the
replacement of our hotel management
system, HR & payroll system and
upgrading the strategic network.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
83
Horst Baier
Independent non-executive director
Horst joined the Whitbread Board in
2019 as an independent non-executive
director and has extensive experience in
the German leisure and hospitality
sector. Previously, Horst served for eight
years as Chief Financial Officer of TUI
AG and played an important role in TUI’s
transformation from a tour operator to a
global provider of holidays.
Given the strategic importance of
Germany to Whitbread, and our growing
presence in Germany, we have asked
Horst to share his perspective on our
strategy in Germany, the strengths and
capabilities of our business, the
opportunities available to us and how
we are adapting to a different market
while keeping our brand, values and
culture intact.
Firstly, why is Germany an attractive
market for Premier Inn?
HB: Whitbread announced its strategy to
expand to the German market in 2014.
Situated in the middle of Europe,
Germany is a hugely successful and
significant economy with many large
cities and resulting demand for hotels,
which was very attractive to Whitbread.
The hotel sector in Germany is highly
fragmented and mostly dominated by
the independent sector. This, combined
with structural barriers to entry for
franchise operators, makes Germany a
highly attractive proposition for the
owner-operated model of Premier Inn.
The midscale and economy segment of
the German market is the fastest
growing segment and, as a budget hotel
brand, Premier Inn is well placed to
capitalise on this booming market. In
Germany, the hotel market is equally
split between short stays for leisure and
business purposes and, similar to the UK,
Premier Inn is well placed to serve both
markets consistently.
While the current political situations in
the East of Europe have led to some
levels of short-term uncertainty, the
longer-term outlook is positive for the
German economy.
How have we scaled our presence
inGermany?
HB: Whitbread opened its first hotel in
Frankfurt in February 2016. Immediately
pre-COVID-19, Premier Inn still had only
five hotels in Germany. We now have 51
hotels across the whole of Germany, and
we have invested £1 billion in capital or
capitalised leases. Through a good mix
of greenfield development and
opportune M&A deals, and backed by a
strong balance sheet, Premier Inn was
able to set itself apart as one of the
fastest growing brands in Germany.
We have further ambitions to grow the
business. With our open and committed
portfolio of almost c.16,000 rooms, we
see significant opportunity to grow
further and plan to become the largest
branded hotel operator in Germany.
How has the German market recovered
from the pandemic?
HB: The German market was in
lockdown for longer and has been slow
to recover from the pandemic, with most
restrictions being lifted as late as the
end of April 2022. During the summer,
when COVID-19 restrictions were
minimised, the leisure travel segment led
the recovery, closely followed by the
business sector, strongly coming through
later in the year as business conferences
and trade fairs restarted activity. This is
reflected in the performance of our
Whitbread Annual Report and Accounts 2022/23
84
Q&A with Horst Baier
Strategic importance oftheGerman business
hotels: Hamburg and Freiburg, which are
leisure led, have already emerged from
the impact of COVID-19, whereas our
more business-led hotels in Frankfurt of
comparatively still catching up.
What do you think are some of the key
highlights of the German business?
HB: A key highlight for me would be that
our cohort of 18 established hotels, i.e.
the hotels which have been open for
more than 12 months, are already
performing in line with the market and
so this is a strong indicator that the
brand proposition is working
inGermany.
The Board is very focused on
maintaining the right balance between
achieving profitability in the business as
soon as possible, but continuing a strong
trajectory of growth. New sites can
create a drag on short-term profitability,
as new sites take a while to mature, but
it is the right thing to do strategically.
The Premier Inn brand proposition has
proved it can work well in the German
market. We have drawn on our decades
of experience in the UK, in providing
great value for money, a friendly and
warm service, and delivering consistency
across our entire chain of hotels. Such
strengths, coupled with real scale, are
pre-requisites for a successful budget
hotel brand and, with the right market
structure and consumer behaviours,
canbe replicated in other markets,
including Germany.
That said, we have also tailored our offer
to the German customer and there are
some differences to our offering in the
UK: for example, German guests are
typically happier with a smaller room,
like different breakfast options to UK
guests, prefer showers to baths and like
a more heavily designed ground floor
and bar area. We are tailoring our
proposition to these guest preferences.
Can you talk us through your strategy
inGermany?
HB: As I said earlier, we have grown our
business very quickly in Germany, and
we have established a great platform
from which we can continue to grow. We
are also ambitious and, with
approximately c.16,000 rooms open or
committed, we are well on our way to
becoming the largest branded hotel
chain in Germany.
We are committed to reach profitability,
and will prove we can generate the
10-14% returns which our shareholders
expect. We remain confident in our
thesis: Germany is a large and profitable
market and that structurally the market
that is highly attractive, with a large
independent hotel sector and a relatively
small branded midscale and economy
hotel sector. So the signs are good and
we are well on our way to proving that
our model can deliver attractive returns
in this large and exciting market.
How is the Force for Good strategy
integrated across the German business?
HB: Our sustainability strategy is very
important for the German guest. We see
a significant shift in the importance of
ESG issues in Germany, and it is
important for us to take a leading
position, if we want to be a market
leader. It is also important to our teams,
particularly the younger generation, as
they join the Company and can see all of
our efforts being made to drive positive
change. I see it as a potential
differentiator for us.
In Force for Good, we already have a
great programme, one which is industry-
leading, and we are now rolling it out in
Germany. Our commitment to be net
zero by 2040 includes our hotels in
Germany and all Premier Inn sites are
built to a similar standard to ‘BREEAM
Excellent’ in the UK. We have partnered
with CHILDREN and already raised
nearly €400,000 to benefit the lives of
underprivileged children in Germany.
Guests who stay for more than one
nightcan opt out of having their room
cleaned and instead donate a hot meal
to CHILDREN.
Premier Inn Germany is committed to
the same diversity and inclusion targets
as exist in the UK, and offers a clear
opportunity and pathway for all our
team members to become a hotel
manager if they work hard and possess
the right skills and commitment.
Together with our attractive rates of pay,
these factors are all strong contributors
to Premier Inn Germany having strong
staff retention rates.
Premier Inn Berlin Alexanderplatz
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
85
Chris Kennedy
Chair, Audit Committee
Composition of the Committee
In accordance with the UK Corporate
Governance Code 2018, the Board has
confirmed that all members of the
Committee are independent
non-executive directors and have been
appointed to the Committee based
ontheir individual financial and
commercial experience.
The Board has also confirmed that I, as
Chair of the Committee, have recent and
relevant financial experience through my
current appointment as Chief Financial
Officer of ITV plc and my previous
appointments as Chief Financial Officer
of Micro Focus International plc and
ARM Holdings plc, together with my
past role as Group Finance Director of
easyJet plc.
As part of the Company’s governance
processes, an internal evaluation of the
Committee was undertaken this year.
The results of the evaluation were
positive. The evaluation concluded that
the Committee is very effective, well
chaired and is effective at managing the
reporting environment and risk
processes. The level of expertise on the
Committee is good, with good
discussion and debate. It was recognised
that areas of focus for the Committee
were to review the operation of the
control and risk management
framework, including the operational IT
risks, consider the process for assessing
the effectiveness of both internal and
external audit, and to ensure Committee
papers include executive summaries
which set out focus areas.
Role and responsibilities of
theCommittee
The Board has delegated specific
responsibilities to the Committee in
accordance with the Code. The key
responsibilities of the Audit Committee
are to:
• monitor and review the integrity of
theGroup’s half-year and full-year
financial results, and the financial
reporting process including
consideration of these reports being
fair, balanced and understandable;
• monitor the statutory audit of the
parent company and consolidated
financial statements;
• review the Group’s internal controls
and risk management systems;
• review and monitor the independence
and effectiveness of the external
auditor, in particular, the provision of
additional services;
• monitor and review the effectiveness
of the Group’s internal audit function;
and
• have primary responsibility for the
recommendations to the Board in
relation to the external auditor.
To aid its review, the Committee
considers reports from the Group
Financial Controller, the Head of Internal
Audit also reports from the external
auditor on the outcomes ofits half-year
review and annual audit. The Committee
looks for constructive challenge from
Deloitte asexternal auditor.
The Committee met four times in
2022/23. Meetings were attended
by members of the Committee
and, by invitation, the Chairman
of the Board, the Chief Executive,
the Chief Financial Officer, the
Head of Internal Audit, the Group
Financial Controller and other
relevant people from the business
when appropriate.
The external auditor, Deloitte LLP, is
alsoinvited to meetings except where
discussion includes matters relating to
its own independence, performance,
reappointment, fees or audit tendering.
Membership of the Audit Committee
and meeting attendance
Name of director
Meetings attended
and eligible to attend
Chris Kennedy
(Chair) 4/4
David Atkins
1
3/4
Horst Baier 4/4
Fumbi Chima 4/4
Frank Fiskers 4/4
Cilla Snowball
2
0/0
1 The one Audit Committee meeting that David Atkins
was unable to attend was due to a previously arranged
personal commitment.
2 Cilla Snowball was appointed to the Board on
24 January 2023 and no meetings were held between
that date and the end of 2022/23.
Whitbread Annual Report and Accounts 2022/23
86
Corporate Governance
Audit Committee report
Significant matters in the
financial statements
The key areas of judgement and
estimates considered by the Committee,
in relation to the 2022/23 accounts and
disclosed in Note 2 to the consolidated
financial statements on pages 148 and
149, were:
Adjusting items
The Committee challenged the
appropriateness of the presentation of
adjusting items, giving consideration to
the nature and significance of each item
classified as adjusting. The Committee
concluded that the items met the criteria
as defined by the accounting policy and
that the policy had been applied
consistently across years.
Defined benefit pension
The Committee reviewed, considered
and exercised judgement on the
assumptions used to calculate the fair
value of pension scheme assets and
present value of defined benefit
obligations under IAS 19, to satisfy itself
that appropriate consideration and
balance had been given to all
macroeconomic factors. The principal
assumptions used and the sensitivities
around them were considered and the
consistency in approach from 2021/22
to2022/23 was assessed.
Impairment testing – property, plant
and equipment, goodwill and right-of-
use assets
The Group’s impairment reviews require
significant judgement in estimating the
recoverable amount of its cash
generating units. An impairment review
was undertaken at half year which
resulted in the recognition of a net
impairment reversal of £35.9m
(impairment charge £10.6m and
impairment reversal £46.5m) across UK
and Ireland and no impairment or
reversals being recognised in Germany.
The reversal was driven by the recovery
and strengthening of trading
performance across the UK estate.
A further impairment review was
undertaken at year end which resulted in
the recognition of a net impairment
charge of £35.2m (impairment charge
£43.7m and impairment reversal £8.5m)
across UK and Ireland and a charge of
£30.8m being recognised in Germany.
The increase in market interest rates has
driven higher impairments in the UK and
Germany, impacting UK standalone
restaurants and those sites where F&B
revenues represent a more significant
portion of total sales and German sites
where the pace of expansion and a
number of portfolio acquisitions has led
to a distribution of performance.
The Committee reviewed the approach
taken to the impairment review. The
Committee challenged management’s
approach, in particular the methodology
used to estimate both value in use and
fair value less costs of disposal for site
level impairment reviews. The Committee
also challenged the inputs used in
management’s model, with a specific
focus on discount rates and growth rates.
The Committee was satisfied that the
Group has appropriately performed the
impairment reviews, accounted for the
impairment and impairment reversals
identified andthat the related disclosures
wereappropriate.
Property transaction including sale and
leaseback of land
The Committee reviewed and considered
the judgement inherent within the
property transaction to allocate the
value between the sale and leaseback
ofland and the sale of a hotel under
construction with reference to the
appropriate accounting standards to
determine the transfer of control for
each part of the transaction.
Judgement was used to allocate the
proceeds between the two distinct
elements of this transaction, which
waschallenged by the Committee,
concluding that the allocation and
judgement made were appropriate.
Fair, balanced and
understandable
In order to confirm to the Board that
theAnnual Report and Accounts,
takenas whole is fair, balanced and
understandable, there has been a
thorough verification and approval
process using the Committee’s
knowledge of the Company,
asoutlinedbelow:
• The Annual Report and Accounts is
drafted by the appropriate senior
management with overall coordination
by the Secretariat team to ensure
consistency.
• Comprehensive reviews of the drafts
of the Annual Report and Accounts
are undertaken by management,
members of the Executive Committee
and the Audit Committee Chairman.
• A final draft is reviewed by the Audit
Committee prior to consideration by
acommittee of the Board.
• Formal approval of the Annual Report
and Accounts is given by a Committee
of the Board.
Going concern and viability
The Committee received regular updates
on the steps taken by management to
secure liquidity for the recovery period
and beyond. The assessment of the
Group to continue as a going concern is
supported by the following:
• Cash and cash equivalents of £1.2bn at
the balance sheet date.
• The Group maintains headroom to its
current financial covenants in excess
of £2.0 billion throughout the going
concern period.
• £1.0 billion of sterling bonds maturing
outside of the going concern period,
between October 2025 and May 2031,
with no covenants.
In addition, the Committee has reviewed
the Group’s assessment of viability over
aperiod greater than 12 months. In
assessing viability, the Committee has
considered the Group’s position following
the steps taken during the year as listed
above and the three-year plan recently
approved by the Board. The Committee
considered the potential financial impact
of the Group’s principal risks and
uncertainties, including the impact of
climate change and related legislation
onthe Group’s operations as well as all
aspects of the Group’s capital
allocationframework.
Internal control and risk
management
The Audit Committee monitors the
systems of risk management and internal
control. In addition, the Committee
completes an annual review of the
effectiveness of these systems, assessing
the risk management framework and
policy, management’s risk assessment
and review process, and the monitoring
and reporting of risk. This review is
completed in conjunction with an internal
control effectiveness review from Internal
Audit and Group Finance, and considers
all material controls, including financial,
operational and compliance controls. The
system and processes were considered to
be robust in the UK and maturing in our
overseas businesses; where areas of
improvement were noted as processes
are being embedded.
During the year, the Committee
dedicated time to the following matters:
• UK corporate reforms – the
Government response was released
to the BEIS white paper and the
Committee was updated on these
positions along with those from the
FRC, whilst updating on Whitbread’s
readiness for any potential
newregulations.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
87
• TCFD – a detailed update on planning
and progress for disclosure
requirements was discussed, reflecting
recommendations highlighted as part
of our ongoing reviews.
• One important element of our fraud
framework is our employee
whistleblowing line, which was
reviewed to assess the effectiveness of
the system with a specific focus on
transparency of reporting and
follow-up of incidents.
• The provision of service auditor
reports for our key service providers
and the wider controls needed in
these service areas.
• The impact of new business processes
and the control enhancements needed
to support these changes.
• An initial view on controls needed to
support the change in hotel
management system in 2023/24 and
the process impact this will have.
A robust assessment of the principal and
emerging risks facing the Company was
carried out by the Board, considering
riskappetite, and each risk was assessed
and the level of assurance required
wasdetermined. Further details of the
principal risks identified and agreed by
the Company can be found on pages
60to 67.
Internal Audit
The internal audit function provides
independent assurance through
reviewing the risk management
processes and internal controls
established by management.
The Audit Committee discusses and
approves the internal audit annual plan,
which aims to provide objective and
insightful assurance that appropriate
controls are in place to support our
strategy and growth ambitions. The
Head of Internal Audit provides regular
updates on progress against the plan,
key findings, as well as progress of
audit action completion, at each
meeting. To help the Committee gain
assurance that the internal audit
function is independent, the Committee
meets with the Head of Internal Audit
at least once a year without the
presence of management.
Over the last 12 months, the business
audits primarily focused on commercial
and operational areas. In Germany, a
number of higher-level, discovery pieces
were completed to understand the
developing control environment, and to
inform the risk-based plan for more
detailed future audits. Group wide audits
were delivered across the technology
functions focusing on cyber risk, as well
as a series of programme assurance
reviews which have been conducted
across our three technology led strategic
programmes being the replacement of
our hotel management system, HR &
payroll system and upgrading the
strategic network.
Following the completion of an
independent external quality assessment
(EQA) in January 2022, by PwC, the
team has implemented various
continuous improvement activities
during the year focusing on embedding
a series of KPI metrics, improved
stakeholder management and ensuring
subject matter experts are bringing
external insights to complex audits.
A rolling 24-month audit plan is
proposed, with the first 12 months of
activity agreed by the Committee in
March 2023. By moving to a 24-month
audit plan, we have greater flexibility
and agility to respond and re-prioritise
audits as business priorities change. The
Internal Audit plan is developed on the
following basis:
• It is risk based, aligned to Whitbread’s
principal risks, and determined by the
Audit Universe, which sets out all
auditable areas of the business and
assigns each area a risk level and
recommended audit frequency.
• It considers areas of major change
within the business, recurring themes
from previous audit results and the
views of management.
• Follow-up audits are also planned in
areas where past audits highlighted
significant risks to ensure remedial
actions have been implemented and
are working effectively to reduce
Whitbread’s risk exposure.
External auditor
On behalf of the Board, the Committee
oversees the relationship with the
external auditor. Deloitte was appointed
as the auditor of the Company in 2015
following a formal tender process, and
reappointed at the 2022 annual general
meeting. The current lead audit partner
is Katie Houldsworth, who was
appointed in 2020.
Audit effectiveness
The effectiveness of the external audit
process is dependent on appropriate
audit risk identification at the start of
the audit cycle. We receive from Deloitte
a detailed audit plan, identifying its
assessment of these key risks.
These risks were reviewed and they,
together with the work done by the
auditor, were challenged to test
management’s assumptions and
estimates around these areas, as well as
other areas reported upon. The
effectiveness of the audit process was
assessed in addressing these matters
through the reporting we received from
Deloitte at both the half year and
year-end. In addition, feedback was
sought from the Committee, the Board
and management on the effectiveness of
the audit process and targeted and
tailored questionnaires were completed.
An assessment of the effectiveness of
Deloitte in respect of the previous
financial year was undertaken in July
2022. Overall, the audit was effective
and executed to a high standard with
relevant and robust challenge together
with partnering on significant
judgemental areas and best practice
governance. However, it was noted that
there was still room for improvement in
respect of the planning and timeliness of
audit requests.
As part of our review process for the
financial year, the Committee will be
assessing the work of the year-end audit
after it is finalised, incorporating an
external audit effectiveness review for this
financial year which will be completed and
reported to the Audit Committee.
The Committee confirms that the
Company has complied with regard to
the requirement of the provisions of the
Statutory Audit Services for Large
Companies Market Investigation
(Mandatory Use of Competitive Tender
Processes and Audit Committee
Responsibilities) Order 2014. The Group
intends to put the external audit out to
tender every ten years in the future, with
the next tender expected to be in
second half of 2023/24.
Auditor independence
To safeguard the objectivity and
independence of the external auditor,
the Committee’s terms of reference set
out the policy in respect of provision of
services by the external auditor. The
Committee regularly reviews this policy
for necessary changes in response to
changes in related standards and
regulatory requirements. This policy was
updated in March 2020 to incorporate
the Revised Ethical Standards issued by
the FRC in December 2019.
The policy defines prohibited services
that are not to be provided by the
auditor because they represent a risk to
the external auditor’s independence. For
certain services that are not prohibited,
because of the knowledge and
experience of the external auditor and/
or for reasons of confidentiality, it can
bemore efficient or prudent to engage
the external auditor rather than another
party. This is particularly the case with
audit-related assurance services that are
Whitbread Annual Report and Accounts 2022/23
88
Corporate Governance
Audit Committee report
closely connected to the audit function
where the external auditor has the
benefit of knowledge gained from work
already performed as part of the audit.
For certain specified audit and audit-
related services, the Group can employ
the external auditor without reference
tothe Audit Committee, subject to a
specified fee limit of up to £250,000.
For the services permitted in certain
circumstances, agreement must be
sought from me, as Chairman of the
Committee, where fees are less than
thelimit specified, or with full Audit
Committee approval where fees
areanticipated to be greater than
£250,000. A tender process would
beheld where appropriate.
Total non-audit fees amounted to
£0.1mconsisting of the interim review
and benchmarking of the Group’s TCFD
disclosures. Although this is considered
to be a non-audit service, the objectives
of thereview are aligned with the audit.
Chris Kennedy
Chair, Audit Committee
24 April 2023
Activities post financial year
March 2023
• Review of year-end Financial
Statements and Report template;
including accounting judgements,
estimates methodology, and
subsidiary audits
• External audit approval of
remuneration, terms of
engagement, non-audit fees and
controls update
• Internal Audit approval of plan,
Audit Committee quality evaluation
• External audit – year-end audit
report and non audit fees
• Internal audit – internal audit report
and terms of reference
• Risk and controls – review of
statements on risk management
andtax controls, financial control
framework, fraud risks and
litigationreport
• Compliance report –
Whistleblowing, TCFD and
transition plan
• Audit Committee rolling agendas
and terms of reference
• Meeting with auditors without
executive team present
• Risk and controls – review of risk
management process, approval of
policy, update on financial control
framework, Speaking Out reports
andlitigation review
• Audit Committee evaluation
• Green Bond allocation report
• Audit Committee rolling agendas and
terms of reference
April 2023
• 2022/2023 Annual Report and
Accounts including strategic
report,governance and
consolidatedaccounts
Main activities during the year
In 2022/23, the Audit Committee’s
work covered internal controls, risk
management, internal audit, external
audit and financial reporting. The
details of the matters discussed at
Committee meetings are shown below.
March 2022
• Review of year-end Financial
Statements and Report template;
including accounting judgements,
estimates methodology, tax, and
summary of COVID-19 grant and
subsidiary audits
• External audit approval of
remuneration, terms of
engagement, non-audit fees and
controls update
• Internal audit approval of plan,
Audit Committee quality evaluation
• Risk and controls – review of risk
management process, approval of
policy, update on financial control
framework, Speaking Out reports
and litigation review
• TCFD Disclosure draft
• Audit Committee rolling agenda
and terms of reference
• Internal audit – progress update
onaudit plan, update on EQA
actionplan and committee
effectiveness review
• External audit – auditor
effectivenessreview
• Task Force on Climate-related
Financial Disclosures
October 2022
• Review of FY23 Interim Results –
including management papers
inrelation to judgements and
estimates, impairment and
goingconcern
• External audit – half-year report,
interim letter of representation,
preliminary audit plan and
BEISupdate
• Risk and controls – Germany
litigation review, tax and controls
update (Q2 Financial Control
Framework, Fraud; IT
GeneralControls)
• Internal audit – interim update
including retail audit
• Compliance – UK litigation review,
compliance report and
Whistleblowing review
• Assurance update and Group’s
reservation and customer
management system update
April 2022
• 2021/22 Annual Report and Accounts
including strategic report, governance
and consolidated accounts
• External audit – year-end audit report
and non audit fees
• Internal audit – internal audit report;
terms of reference and R&M report
• Risk and controls – review of
statements on risk management and
tax controls
• Compliance report
• Green Bond allocation
• External committee evaluation
• TCFD Report
• Meeting with auditors without
executive team present
July 2022
• Risk and controls – financial control
update and BEIS proposals
• Compliance – treasury policy approval
and tax strategy
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
89
Adam Crozier
Chair, Nomination Committee
Role of the Committee
The role of the Nomination Committee is
to review the composition of the Board
and Executive Committee and to plan for
its refreshment as appropriate. The
Committee is also responsible for
evaluating the directors on an annual
basis, striving for a balance of skills,
knowledge, independence, experience
and diverse representation to allow for it
to operate effectively and ensuring there
is no undue reliance on any one individual.
Responsibilities of the
Committee
The Committee has specific responsibilities
on behalf of the Boardand these are
detailed below:
• to regularly review the structure, size
and composition of the Board (including
balance of skills, independence and
diversity, including gender), and make
recommendations to the Board;
• to consider succession planning for the
Board and senior management, oversee
the development of a diverse pipeline
for succession and to determine the
skills and experience required for future
Board appointments;
• to identify and nominate, for the
approval of the Board, candidates to fill
Board vacancies as and when they arise;
• to evaluate the balance of skills,
knowledge, experience and diversity
required prior to making an
appointment to the Board and, on the
basis of this evaluation, to prepare a role
description outlining the capabilities
required for a particular appointment;
• to keep the leadership needs of the
Company under review, both for
executive and non-executive directors,
with a view to ensuring the continued
ability of the Company to effectively
compete;
• to keep up to date with strategic
issues and commercial changes
affecting the Company and the market
in which it operates;
• to ensure that, on appointment to the
Board, non-executive directors receive
a formal letter of appointment setting
out the time commitment in respect of
the role;
• to annually review the time required
from non-executive directors and to
ensure that a performance evaluation
is undertaken to determine if non-
executive directors are spending
sufficient time to fulfil their duties;
• for the appointment of a Chairman, to
prepare a job description including the
time commitment expected. A
proposed Chairman’s other significant
commitments should be disclosed to
the Board before appointment and
any changes reported to the Board as
they arise; and
• to review the results of the annual
Board evaluation that relate to the
composition of the Board.
As a business that is committed to
beinga force for good, it is important
that we are as diverse as the
communities we serve, at all levels of
ourbusiness, up to and including our
Board. Diversity mitigates biases and
This year, we are pleased to
welcome Dominic Paul to
theBoard as Chief Executive
andKaren Jones and
CillaSnowball asindependent
non-executive directors.
Membership of the Nomination
Committee and meeting attendance
Name of director
Meetings attended
and eligible to attend
Adam Crozier
(Chair) 8/8
David Atkins 8/8
Kal Atwal 8/8
Horst Baier 8/8
Fumbi Chima 8/8
Frank Fiskers 7/8
Richard Gillingwater 8/8
Chris Kennedy 8/8
Karen Jones
1
1/1
Cilla Snowball
2
0/0
1 Karen Jones was appointed to the Board on
9 January 2023 and has attended the one meeting
that she was eligible to attend.
2 Cilla Snowball was appointed to the Board on
24 January 2023 and therefore was not eligible
toattend any of the meetings.
Whitbread Annual Report and Accounts 2022/23
90
Nomination Committee report
Corporate Governance
group think, especially in leadership
forums such as our Board and Executive
Committee where strategic decisions
are made.
We are very supportive of the FTSE
Women Leaders targets, and Parker
Review targets, and will continue to
drive positive change within our
organisation using these
recommendations to meet these targets.
You can read more about this in our
Diversity & Inclusion Policy and our
Board Diversity Policy on our website
https://www.whitbread.co.uk/
governance/reports-policies/
Outcome of Nomination
Committee evaluation
As part of the Company’s governance
processes, an internal evaluation was
undertaken of the of the Committee’s
effectiveness. The results show the
Committee has a good balance of skills,
knowledge and experience. Members of
the Committee responded positively to
questions on the process that was used
for recruitment and the level of
openness, transparency and
engagement that was encouraged
throughout the process. An area of focus
for the Committee will be meeting
members of the wider executive team
and giving them Board exposure as part
of building a pipeline for succession to
senior management and executive roles.
Female representation
We have strong female representation at
Whitbread. 64.9% of our total workforce
is female, along with 33% of our Board,
with four female directors. It has been a
conscious decision by the Board to make
progress on gender representation.
Improvements will continue to be made
to ensure the Board is well-balanced and
in compliance with requirements.
While making these decisions, the Board
evaluated the tenure and skills of each
Board member along with the strategic
goals and objectives of our organisation.
Karen Jones is Senior Independent
Director at Deliveroo plc and Chair at both
Hawksmoor and Mowgli Street Food,
having previously served as Executive
Chair at Prezzo and Senior Independent
Director at Booker plc. Karen has a wealth
of experience in the restaurant, food and
hospitality sectors, having founded Café
Rouge and led the formation of Spirit
Group as CEO. Breakfast is an important
part of the Premier Inn offering and
Karen’s expertise is a valuable addition
forPremier Inn.
Cilla Snowball has strong advertising,
marketing and digital experience, having
served as Group Chief Executive at
Abbott Mead Vickers BDDO Ltd, and on
the BBDO Worldwide Board, and as Chair
of both the Advertising Association and
the Women’s Business Council. The
Nomination Committee will continue to
assess the balance of skills and
experience on the Board, whilst ensuring
that it is appropriately diverse.
Ethnic representation
Across the organisation, 15.3% of our
teams identify as Black, Asian, or Mixed
Ethnicity, and we are proud to represent
the diverse communities we serve.
Within our leadership population, we are
making progress against our 8%
representation target by the end of
2023, as 6.7% of our leaders are Black,
Asian or Mixed Ethnic.
On our Board, we currently have three
directors who identify as Black, Asian or
Mixed Ethnic. We have met the Board
target set by the Parker Review of ‘1 by
21’ and are very supportive of the
enhanced targets now set, which aligns
with the work we continue to do in this
area to drive greater ethnic
representation in leadership roles.
In the last 12 months, we have also
externally published the ethnicity pay
gapreport, sharing our findings with our
teams along with our race action plan.
Representation at a senior level continues
to be a key action and we recognise that,
whilst we are making progress, we still have
more to do. There is more detail on our
Diversity and Inclusion commitments in the
Opportunity section on pages 46 and 47.
Succession planning
The Chairman leads the Committee in
annually evaluating the balance of skills,
experience, independence, and
knowledge on the Board, preparing a
description of the role and capabilities
required for a particular appointment. A
matrix of the skills and competencies of
the current Board is mapped against the
strategic objectives of the organisation as
well as the cultural fit of every member of
the Board. Additionally, a review of the
current talent market for key roles such
as Chief Executive and Chief Financial
Officer is conducted and refreshed
regularly. This process helps the
Committee ensure a robust succession
plan and development of a diverse
pipeline in line with the Board’s policies
and Diversity and Inclusion commitments.
As part of our annual talent cycle, we
review the long-term succession plan for
our Executive Committee and its direct
reports. The Committee recognises the
importance of reviewing the internal
succession strength and ensuring robust
emergency and medium-term succession
plans are in place. We also value deep
dive talent reviews into the critical
capabilities of the Executive Committee
and senior leadership team. This review
includes both the UK and Germany. In the
coming year, the Committee intends to
carry on its work towards furthering the
gender and ethnic diversity throughout
the organisation including the Board.
Chief Executive succession
As part of the routine succession
planning processes, discussions took
place between myself and Alison Brittain
regarding Alison’s personal plans. At the
appropriate time the Nomination
Committee reviewed the core capabilities
which would be required of a future Chief
Executive, together with the personal and
cultural attributes which would be
needed to take on the position.
At the appropriate time, the Committee
appointed Spencer Stuart, a third party
consultant fully independent from the
Company and its directors, to identify
potential candidates for the position,
from a diverse group of individuals.
Spencer Stuart then provided a long list
of candidates, which was narrowed down
by the Committee to a smaller group to
be interviewed for the position. Meetings
were held with myself and with individual
non-executive directors, and then a
presentation was made to the whole of
the Nomination Committee.
As a result of this process, the Board
unanimously decided that Dominic Paul
was the preferred candidate and his
appointment was subsequently confirmed.
Our approach to the annual
re-election of directors
As required by the Code, all directors
will be subject to re-election at the AGM.
During the year, I completed the
individual performance review of each
non-executive director in respect of their
contribution and time commitment to
the Company. All directors are proposed
for reappointment at this year’s AGM.
Details setting out why each director is
deemed to be suitable for reappointment,
and how their contribution continues to
be important to the Company’s long-
term success, will be included with the
AGM papers circulated to all shareholders.
Adam Crozier
Chair, Nomination Committee
24 April 2023
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
91
Frank Fiskers
Chair, Remuneration Committee
Actions taken by management, both
during the darkest days of the pandemic
and in the weeks and months during
which we all started getting back to a
more normal way of life, have enabled
Whitbread to emerge from the
pandemic in a stronger position than it
went into it. Market share has increased,
we have outperformed the market
significantly, the operational and
commercial performance in the core UK
market has been excellent and Premier
Inn has grown significantly in Germany.
Summary of financial and
incentive outcomes
Our profit for the year of £413.4m was a
return to pre-pandemic levels, and we
significantly outperformed the market,
with total UK accommodation sales
growth 25.2% ahead of the UK midscale
and economy market. In Germany, we
now have 51 open hotels, with
accommodation sales 249% ahead of
2021/22. We have not received any
COVID-related Government support
relating to the 2022/23 financial year.
Given this outstanding performance,
the annual incentive awards received by
executives are at the top end of the
range. As you would expect, the
Committee has carefully considered
whether payouts at this level are
appropriate, both in the context of the
economic backdrop in the UK and with
careful consideration of the treatment
of other stakeholders: how our
employees have been treated, and how
shareholders, customers, suppliers and
others have fared over the year. This
time last year, the Committee chose to
exercise its discretion to reduce
payouts under the Annual Incentive
Scheme (AIS), but this year we have
concluded that it would not be fair or
reasonable to make a similar reduction.
We have concluded that the experience
of all our stakeholders has been strong
and it is therefore right that
management is rewarded appropriately
in line with the outstanding
performance delivered.
The Committee had to consider the
vesting level of the 2020 Restricted
Share Plan (RSP) award where
performance was significantly impacted
by the pandemic with one of the
underpins being unable to be met from
early in the performance period.
Although the Committee believes that
the Whitbread management team
delivered everything that was possible
given the environment we were
operating within, it was cognisant that
shareholder returns were impacted by
the wider environment over the period.
It was, therefore, decided that the 2020
RSP award should vest at 45% of the
amount awarded (including an
adjustment to take into account the fall
in share price before grant). The
Committee believes that the outcomes
of the annual incentive and RSP are both
appropriate and aligned with the
performance of the Company over their
respective performance periods, and
that the Policy has operated as intended.
As you have seen elsewhere in
this report, this year has been a
year of exceptional performance
across Whitbread. This time last
year, although we had emerged
from the worst that the pandemic
had thrown at us, the Omicron
wave was still fresh in our minds
and significant uncertainty
remained about the year ahead.
Whitbread Annual Report and Accounts 2022/23
92
Remuneration Committee report
Corporate Governance
2020 Restricted Share
Planaward
The 2020 RSP grants were the first made
under the remuneration policy approved
by shareholders in December 2019. The
underpins set for the first award were
designed to protect against any payment
for failure, whilst recognising the need to
continue to invest significant sums of
capital in the business, in order to deliver
on our strategy for growth.
As I explained in the 2021 report, during
the course of this award cycle we were
concerned about being able to meet the
2020 RSP underpins because of the
temporary closures and severe operating
restrictions we were subject to during
the pandemic, with significant
consequences for motivation and
retention. As such, we decided to
evaluate performance in its full context
at vesting by considering all relevant
factors and metrics in a holistic manner
in addition to the underpins.
The RSP has two underpins and, for
each underpin that is not met, the
Committee may reduce the vesting
outcome by up to 50% of the total
award. Whilst the Committee reviewed
the formulaic outcome under each
underpin, this was just one factor within
the overall assessment.
The first underpin is a test of average
return on capital employed (ROCE)
relative to weighted average cost of
capital (WACC) over the performance
period. Given the material losses made in
2020/21, this underpin was not met as a
three-year average; however, it was met
in the final year. The second underpin
assessed our debt to funds from
operations (FFO) leverage ratio and this
underpin was met.
When considering performance in the
round, the Committee noted the strong
performance of the Whitbread leadership
team over the period, including its
resolute steering of the business through
the challenges of the pandemic,
significantly increasing our market share
when we were legally permitted to trade
and setting up the Company for future
growth opportunities. The Committee
believes that management has delivered
everything that was possible given the
environment we were operating within,
and this is demonstrated by the strong
2022/23 outcomes. The Committee also
considered the experience of the
Company’s other stakeholders through
the whole period.
However, the Committee is cognisant of
the fact that shareholder returns have
also been impacted by the wider
environment and the performance
relative to the underpins.
The Committee commends
management’s outstanding contribution
over the period but concluded that it is
appropriate to lapse the full 50% relating
to the ROCE underpin that was missed.
It noted that, in the final year of the
period, ROCE performance was strong,
but considered that this is appropriately
rewarded in the AIS results.
The Committee also considered whether
any ‘windfall’ gain had arisen as a result
of this award being granted in 2020.
While share price growth since the award
has not been exceptional (8.9% per
annum), it had fallen significantly
between 2019 and 2020 when the award
was made and so the Committee judged
it appropriate to further reduce the level
of vesting to appropriately reflect this. A
further 10% reduction was applied,
reducing the overall vesting level to 45%
of the amount awarded. The Committee
is confident that this reflects a fair and
reasonable outcome and a more detailed
explanation of the Committee’s
considerations can be found on pages
108 to 110.
2022/23 annual incentives
The incentive for 2022/23 was based on
a combination of profit, efficiency
savings, strategic objectives and ESG
targets. When the targets for the profit
element were set at the start of the year,
the Committee noted that there was
significant uncertainty in the external
trading environment and it, therefore,
agreed that it would be prudent to
review the targets against the external
environment at the half year.
During the first half of the financial year,
market conditions were materially better
than we anticipated when the target was
set, and the Committee determined that
it was appropriate to revise the full-year
profit target upwards to reflect this
taking into account external consensus
earnings at that time. As explained
earlier in this report, performance over
the whole year has been outstanding
and profit performance has exceeded
the revised stretch target. Performance
against targets for the other elements of
the incentive scheme were also strong,
and this has resulted in outcomes of
94.38%, 94.38% and 93.79% of maximum
for Alison Brittain, Dominic Paul and
Hemant Patel respectively. The
Committee considers that these
outcomes are an appropriate measure of
management performance across the
year and the strong delivery against the
higher profit target is indicative of the
extent to which Whitbread has
outperformed the market. Full details of
the outcome against all performance
measures are included on page 97.
Chief Executive succession
As announced previously, Alison Brittain
stepped down as Chief Executive Officer
on 17 January 2023 and left the Board
and the Company when she retired from
full-time executive life on 2 March 2023.
You will see later in this report that, as
Alison is retiring from full-time executive
life, she is a ‘good leaver’ and will be
treated as such for share scheme
purposes. All of the remuneration
treatment agreed in relation to Alison’s
departure is in accordance with the
approved policy.
Dominic Paul joined Whitbread on
10 January 2023 and became Chief
Executive Officer with effect from
17 January 2023. Dominic will be paid a
salary of £900,000, less than Alison’s
basic salary, and his incentive
opportunities are in line with both his
predecessor and the approved policy.
Aspart of his joining arrangements,
Whitbread compensated Dominic for the
incentive awards he forfeited at his
previous employer. Further details of
Dominic’s remuneration can be found
onpage 112.
2022 annual general meeting
At the AGM on 15 June 2022, a
disappointing 61.56% of votes were cast
in favour of the resolution to approve
the 2021/22 remuneration report. We
have not shied away from this over the
year, and have actively and widely
engaged with a number of our larger
investors and voting advisory services
since then to ensure we have a good
understanding of investor sentiment
regarding the votes cast against, as well
as regarding any other governance-
related issues.
From our engagement, it is clear that the
main reason behind the votes which were
cast against related to the payment of a
bonus in a year when the Group received
Government furlough support. Those
shareholders who voted against felt that
the 25% reduction to the incentive
outcome, which we made to reflect the
quarter of the year when we received
furlough, did not go far enough. The
Committee has noted and discussed that
feedback, and will take it into account in
the future. We have continued to engage
constructively with investors on this and
other governance-related topics. The
Company did not receive any COVID-
related Government support relating to
the 2022/23 financial year.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
93
Reward and recognition across
Whitbread and beyond
How employees across the organisation
are rewarded is a very important factor
when the Committee is considering
executive pay. The Committee was
pleased to see the continued investment
in our lowest paid employees and,
during the year, a £28m investment
(£46m on an annualised basis) was
made in our UK-based hourly paid team
members. They received a mid-year
increase for the second successive year,
in addition to the April increase,
together with a special one-off payment
in recognition of the exceptional
cost-of-living challenges. Our Guest
Support teams in our UK Support Centre
also received an increase and one-off
payment, and all of our hourly paid team
members in Germany received a special
annual payment.
We also implemented targeted pay
increases beyond these levels in
particular areas of the country and for
particular job roles over the year. All of
our pay rates continue to be ahead of
the National Minimum Wage and
National Living Wage. In carrying out
this year’s salary review for senior
executives, the Committee was
cognisant of the cost-of-living
challenges, particularly impacting those
on lower incomes. I am pleased to say
that there has been a focus on investing
in our teams and this means that the
increase awarded to senior executives as
part of this year’s salary review is lower
than the increases awarded across the
rest of the organisation.
We also considered the impact through
the year which we have had on other
stakeholders: shareholders, customers,
suppliers, the communities we operate in
and the environment around us, and
further details are on pages 95 and 96.
Looking forwards
This year, we look forwards with more
confidence than at this time last year.
The business is in very good shape, and
we need to maintain the momentum
which we have seen through 2022/23.
Turning now to the 2023 RSP, as I
explained in my report last year, it was
our intention to return to the type of
underpins which we originally used when
the Plan was developed and we have
decided to do this for the 2023 award.
Itis clear to the Committee that the
strength of the business and the
improved external operating
environment make this change
possibleand appropriate.
There will therefore be two underpins: a
leverage measure; and returns. Further
details can be found on page 115. The
Committee has carefully considered
these underpins, and has consulted with
major shareholders before finalising
them. We believe they are pitched at the
right level – an underpin is a guard
against failure, not a performance
condition, and we were mindful of this
when agreeing the measures.
This has been an excellent year for
Whitbread and the challenge is to now
build on that performance. I can assure
you that the Remuneration Committee is
focused on aligning the interests of
shareholders with those of management
and incentivising executives to drive
Whitbread to even higher levels of
achievement.
I hope to meet some of you at our
annual general meeting in June, where I
will be happy to answer any questions
you might have.
Frank Fiskers
Chair, Remuneration Committee
24 April 2023
Whitbread Annual Report and Accounts 2022/23
94
Remuneration Committee report
Corporate Governance
Employees
• A £28m in-year investment (£46m
annualised) in our UK-based hourly
paid team members in:
1. the April 2022 pay increase;
2. a special one-off payment in
recognition of the exceptional
cost-of-living challenges;
3. a mid-year additional pay increase
with minimum pay rates for our
operational team members
increased by 4.2% (which,
combined with the April 2022
increase, represents 6.4% over
12 months); and
4. targeted pay increases in particular
areas of the country and for
particular job roles.
• Our Guest Support team in the
UKSupport Centre also received
amid-year increase and
one-offpayment.
• A special annual payment to hourly
paid team members in Germany.
• Investment in developing careers,
through external leadership
programmes for Regional
Operations Managers, Operations
Directors and senior leaders.
• 180 of our senior leaders, which
includes our Leadership Community
plus our Regional Operational
Leaders attended D&I leadership
training. Significant progress
demonstrated through our external
awards and recognition, including
Gold Award for Excellence in this
year’s Stonewall Workplace
Equality Index, and an improvement
in ranking in the Index – and strong
Stakeholder experience in 2022/23
Business performance
Total shareholder return (TSR)
28 Feb
2013
27 Feb
2014
26 Feb
2015
03 Mar
2016
02 Mar
2017
01 Mar
2018
28 Feb
2019
27 Feb
2020
03 Mar
2022
25 Feb
2021
02 Mar
2023
2
50
200
150
100
50
0
Whitbread
FTSE 100
Source: Datastream from Refinitiv.
The chart looks at the value over ten years of £100 invested in Whitbread PLC on 28 February 2013 compared, on a consistent
basis, with that of £100 invested in the FTSE 100 index based on 30 trading day average values. The FTSE 100 has been selected
by the Committee as an appropriate comparator group due to Whitbread’s position within the FTSE.
Financial measures
£413.4m
Adjusted profit before tax
+25.2%
UK sales growth vs the market
£42.3m
Efficiency savings
progress against our leadership
diversity targets.
• 1,363 team members started
apprenticeships in the year, our
highest number ever, and 237
apprentices completed their
qualification this year.
• Investment in wellbeing through
additional Mental Health First Aiders
and financial assistance through
grants via Hospitality Action.
Investors
• Profit before tax of £413.4m,
returning to pre-pandemic levels.
• Resumed dividend payments and
interim paid.
• The recommended final dividend of
49.8p per share is a 43% increase
from last year.
• Share buy-back of £300m
• Share price growth of 1.82% and
TSR of 4.09%.
• Significant market outperformance
in the UK, with Premier Inn total
accommodation sales 25.2% ahead
of the midscale and economy
market (excluding Premier Inn).
• Expansion continuing at pace in
Germany, establishing a broad
national network with 51 open
hotels and 37 in the pipeline, with
accommodation sales 249% ahead
of 2021/22.
• Our cohort of 18 established hotels
was profitable in aggregate during
2022/23 with a clear pathway
toprofitability for the
Germanbusiness.
• Significant interaction through
Chair, CEO, CFO, General Counsel
and Investor Relations team over
the year (including a Sustainability
Capital Markets Day).
Customers
• Customer satisfaction scores in
Premier Inn showed a significant
increase, up 2%pts year on year to
52.4%.
• Extended our rate class to provide
more value and choice for
customers through introduction
ofNon-Flex.
• Commenced roll-out of an
upgraded mattress to provide
aneven better sleep experience
forcustomers.
• Replaced bedding and pillows
across the estate to further
reinforce quality of sleep for
customers.
• Refurbished a further 3,186 rooms
to ensure a consistent, quality
experience to customers.
• Developed a further 1,942 Premier
Plus rooms across 95 hotels to
provide an upgrade option for
customers and trialling Premier Plus
rooms in Germany.
• Opened 20 new hotels and 3 new
restaurants to provide a great value
accommodation and eating out
option in even more locations for
customers, including ten new hotels
in Germany.
• Upgraded the digital assets for
Premier Inn to provide a simpler,
easier shopping experience
forguests.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
95
Remuneration at a glance
• Substantially evolved the drinks
range to provide more choice
andbetter quality product
tocustomers.
Suppliers
• Continued the committed buy
process, giving additional
contractual security on high value
food products.
• Re-established the supplier
conference, giving suppliers access
to the senior team and
strengthening relationships.
• Ran a new room format supplier
conference, enabling a better
understanding to ensure a
successful transition for all parties.
• Additional due diligence on human
rights carried out.
Stakeholder experience in 2022/23 continued
Communities
• Raised £1.9m for Great Ormond
Street Hospital Charity (GOSH
Charity), resulting in a total of over
£21.9m since the start of our ten
year partnership.
• Fundraising diverted to DEC for
Ukrainian humanitarian efforts.
Whitbread underwrote £0.5m, and
£0.7m raised.
• New partnership with GOSH
Charity up and running, committing
to be a founding partner of its
Children’s Cancer Centre appeal
with a target of £3m pa.
• 1,749 hours donated to a variety
ofprojects.
Joint venture partners
• Additional financial support agreed
for Pure due to COVID impact on
thebusiness.
Environment
• Scope 1 and 2 carbon intensity
reduction at 52.5% vs 2016/17 base
year, on track to hit net zero target
by 2040.
• Revised Scope 3 target agreed and
supply chain carbon mapped.
• Scope 1, 2 and 3 carbon targets
submitted to SBTi and on track for
full accreditation.
• AA rating with MSCI and ‘Low Risk’
rating with Sustainalytics retained
as well as qualifying as a member
of the Dow Jones Sustainability
World Index in the Consumer
Services category.
• Progress made on cotton and palm
oil responsible sourcing targets.
• 12 hotels open to BREEAM excellent
or higher standards.
• Trial proceeding with over 40 air
source heat pumps.
• New water target agreed to reduce
water use by 20% by 2030 – saving
water and saving energy/carbon in
not having to heat as much water.
• Net zero hotel being built in
Swindon.
• Improved communication of Force
for Good programme and
performance internally
andexternally.
Details of how the Board considers
the interests of the Group’s
employees and other stakeholders is
contained on pages 55 to 58.
Whitbread Annual Report and Accounts 2022/23
96
Corporate Governance
Remuneration at a glance
Incentive outcomes for 2022/23 at a glance
2022/23 Annual Incentive Scheme outcomes
The table below sets out the outcome under the 2022/23 annual incentive. The total incentive earned is as follows:
Measure Threshold Target Max
Outcome (% of maximum)
Alison
Brittain
Hemant
Patel
Dominic
Paul
Profit performance ACTUAL: £413.4M 100% 100% 100%
£280m £295m £310m
Efficiency savings ACTUAL: £42.3M 100% 100% 100%
- £35m £40m
Strategic objectives Details of performance are set out on
pages 105 to 107
75.0% 72.1% N/A
ESG measures Details of performance are set out on
page 107
93.8% 93.8% 93.8%
Total outcome (% of maximum) 94.4% 93.8% 94.4%
1
Actual annual bonus (£’000) 1,478 783 179
1 The formulaic outcome for Dominic Paul was 99.2%. On the basis of internal fairness, the Committee has applied discretion to reduce the overall AIS outcome to align with
the former CEO.
2020 RSP vesting
Underpin
Formulaic
assessment Other factors considered
Vesting level
(% of
maximum)
Average ROCE for the UK business to be at least
equal to the WACC plus 1% Not met
• Underpin performance measured on absolute
basis in 2021/22 and 2022/23
• Performance tracking for the 2021 RSP awards
• Windfall gains
• Post-pandemic recovery performance
• Delivering shareholder value 45%
Average lease-adjusted net debt to funds from
operations leverage to be below 4.5x Met
Implementation of policy for 2023/24 at a glance
Director
Salary
(£’000)
Pension
(% salary)
Annual bonus RSP
Maximum
(% salary) Measures
Maximum
(% salary) Underpins
Dominic Paul 900 10% 170% Profit – 50%
Efficiency – 20%
Strategic objectives
– 20%
ESG – 10%
125% The Company’s average lease-
adjusted net debt toFFO leverage
ratio beingless than 4.7x
The Company’s average ROCE for
the UK business to be 9% or higher
Hemant Patel 530 10% 170% 110%
See further information on pages 114 and 115.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
97
Future policy table
Element Purpose and link tostrategy Operation Maximum potential value Performance metrics
Base salary • Base salaries are set to be sufficient to
attract and retain the calibre of
executive talent needed to support the
long-term interests of the business.
Salaries are reviewed annually taking accountof:
• the salary review across the Group;
• trading circumstances;
• personal performance, including against agreed objectives;
and
• market data for anappropriate comparator group
ofcompanies.
• Annual salary increases would normally be in line with the
average increases for employees in other appropriate parts
of the Group.
• On occasion, increases may be larger where the Committee
considers this to be necessary. Circumstances where this
may apply include growth into a role, to reflect a change in
scope of role and responsibilities, where market conditions
indicate a level of under-competitiveness and where the
Committee judges that there is a risk in relation to attracting
or retaining executive directors.
• None.
Benefits • Benefits are intended to be
competitive in the market so as to
assist the recruitment and retention of
executive directors.
• Executive directors are entitled to benefits relating to acar
or car allowance and healthcare or personal insurance.
• In exceptional circumstances, such as the relocation of
adirector, or for a new hire, additional benefits may be
provided in the form of a relocation allowance and benefits
including tax equalisation, reimbursement of expenses
fortemporary accommodation, travel and legal and/or
financial assistance.
• We do not anticipate that the maximum payable would
exceed 10% of salary. However, the Committee may provide
benefits above this level in certain situations where it deems
it necessary. Thismay include, for example, the appointment
of adirector based overseas or a significant increase in the
cost of the benefits.
• None.
Annual Incentive
Scheme
• To provide a direct link between
annual performance and reward.
• To incentivise the achievement of
outstanding results across appropriate
key stakeholder measures.
• To align with the long-term interests
ofshareholders and help participants
build a significant stake in the business
over time, by awarding a material
partof the annual incentive in
deferredequity.
• Targets for measures are normally set at the beginning of
the financial year.
• Cash awards paid following the end of the financial year.
• Deferred share awards normally vest after three years,
subject to continued employment.
• Malus provisions apply to unvested deferred shares and
clawback provisions apply to cash awards as set out below.
• Up to 200% of base salary (up to 50% of maximum paid in
cash and the remainder is paid in deferred share awards).
• The maximum bonus for 2022/23 for the current executive
directors will be 170% of base salary. Any increase beyond
this level in future years will only be applied in exceptional
circumstances and will be at the discretion of the Committee.
• Awards are payable based on amix of financial metrics and
other business objectives. Financial metrics will represent
no less than 60% of the total award for each year, of which
the predominant amount is intended to be profit. Other
measures will be objective and, when possible, externally
benchmarked leading indicators of future financial
performance will be used. Normally around 25% of the
maximum incentive is paid for threshold performance, with
around 50% paid for on-target performance and the full
incentive payment being paid for delivering stretch
performance.
• These vesting levels may vary from year to year.
• The Committee may at its discretion adjust the outcome
under the formulaic measures where it considers it is
appropriate to do so to better reflect overall
Companyperformance.
Restricted Share
Plan
• To enable the growth strategy in both
the UK and Germany, which requires
different strategies and approaches.
• To promote long-term value creation
rather than focusing on specific
targets at a time when the executive
directors need to balance investment
and growth.
• To retain executive directors
throughout an important time for
thebusiness to deliver the
growthstrategy.
• Awards normally vest after a period of at least three years,
subject to two or more performance underpins and
continued employment.
• After vesting, there will be an additional holding period
during which vested shares cannot be sold, such that the
combined underpin measurement period and holding period
is at least five years.
• Subject to clawback and malus provisions as set out below.
• Dividend equivalents may be provided on vested awards
during a holding period.
• Annual awards to a maximum of 125% of base salary in
respect of each financial year.
• The grant for 2022/23 for the current executive directors
will be 125% of base salary for the CEO and 110% of base
salary for the CFO. Any increase beyond this level for the
CFO will only be applied in exceptional circumstances and
will be at the discretion of the Committee.
• Vesting will be subject to two or more performance
underpins, which will be disclosed at or around the time
ofgrant in the DRR.
• If one or more of the underpins is not met, then a portion
ofthe award up to or equal to the weighting of that
measure(s) will lapse, subject to the overall discretion set
out below.
• It is anticipated that all performance underpins will be equally
weighted, although the Committee retains the discretion to
adjust the weighting of any underpins each year.
• The Committee will select the underpins each year in order
to align with the Company’s strategy and these will
normally be disclosed at or around the time of grant, in the
DRR. At least one underpin will be based on an objective
financial metric.
• In addition, the Committee will have general discretion to
determine the most appropriate vesting levels if it believes
this will better reflect the underlying financial performance
of the Company over the period and such other factors as
itmay determine.
Introduction
The Company’s directors’ remuneration policy (the ‘Policy’)
was approved by shareholders at the annual general meeting
on 15 June 2022. The Policy is effective from the date of the
2022 AGM and is intended to apply for three years.
A summary of the Policy is set out below. The full Policy can
be found at whitbread.co.uk/governance.
For executive directors, our approach continues to be
designed so as to:
• align with the business strategy and the achievement of
planned business goals;
• support the creation of sustainable long-term shareholder value.
Whitbread Annual Report and Accounts 2022/23
98
Corporate Governance
Directors’ remuneration policy
Future policy table
Element Purpose and link tostrategy Operation Maximum potential value Performance metrics
Base salary • Base salaries are set to be sufficient to
attract and retain the calibre of
executive talent needed to support the
long-term interests of the business.
Salaries are reviewed annually taking accountof:
• the salary review across the Group;
• trading circumstances;
• personal performance, including against agreed objectives;
and
• market data for anappropriate comparator group
ofcompanies.
• Annual salary increases would normally be in line with the
average increases for employees in other appropriate parts
of the Group.
• On occasion, increases may be larger where the Committee
considers this to be necessary. Circumstances where this
may apply include growth into a role, to reflect a change in
scope of role and responsibilities, where market conditions
indicate a level of under-competitiveness and where the
Committee judges that there is a risk in relation to attracting
or retaining executive directors.
• None.
Benefits • Benefits are intended to be
competitive in the market so as to
assist the recruitment and retention of
executive directors.
• Executive directors are entitled to benefits relating to acar
or car allowance and healthcare or personal insurance.
• In exceptional circumstances, such as the relocation of
adirector, or for a new hire, additional benefits may be
provided in the form of a relocation allowance and benefits
including tax equalisation, reimbursement of expenses
fortemporary accommodation, travel and legal and/or
financial assistance.
• We do not anticipate that the maximum payable would
exceed 10% of salary. However, the Committee may provide
benefits above this level in certain situations where it deems
it necessary. Thismay include, for example, the appointment
of adirector based overseas or a significant increase in the
cost of the benefits.
• None.
Annual Incentive
Scheme
• To provide a direct link between
annual performance and reward.
• To incentivise the achievement of
outstanding results across appropriate
key stakeholder measures.
• To align with the long-term interests
ofshareholders and help participants
build a significant stake in the business
over time, by awarding a material
partof the annual incentive in
deferredequity.
• Targets for measures are normally set at the beginning of
the financial year.
• Cash awards paid following the end of the financial year.
• Deferred share awards normally vest after three years,
subject to continued employment.
• Malus provisions apply to unvested deferred shares and
clawback provisions apply to cash awards as set out below.
• Up to 200% of base salary (up to 50% of maximum paid in
cash and the remainder is paid in deferred share awards).
• The maximum bonus for 2022/23 for the current executive
directors will be 170% of base salary. Any increase beyond
this level in future years will only be applied in exceptional
circumstances and will be at the discretion of the Committee.
• Awards are payable based on amix of financial metrics and
other business objectives. Financial metrics will represent
no less than 60% of the total award for each year, of which
the predominant amount is intended to be profit. Other
measures will be objective and, when possible, externally
benchmarked leading indicators of future financial
performance will be used. Normally around 25% of the
maximum incentive is paid for threshold performance, with
around 50% paid for on-target performance and the full
incentive payment being paid for delivering stretch
performance.
• These vesting levels may vary from year to year.
• The Committee may at its discretion adjust the outcome
under the formulaic measures where it considers it is
appropriate to do so to better reflect overall
Companyperformance.
Restricted Share
Plan
• To enable the growth strategy in both
the UK and Germany, which requires
different strategies and approaches.
• To promote long-term value creation
rather than focusing on specific
targets at a time when the executive
directors need to balance investment
and growth.
• To retain executive directors
throughout an important time for
thebusiness to deliver the
growthstrategy.
• Awards normally vest after a period of at least three years,
subject to two or more performance underpins and
continued employment.
• After vesting, there will be an additional holding period
during which vested shares cannot be sold, such that the
combined underpin measurement period and holding period
is at least five years.
• Subject to clawback and malus provisions as set out below.
• Dividend equivalents may be provided on vested awards
during a holding period.
• Annual awards to a maximum of 125% of base salary in
respect of each financial year.
• The grant for 2022/23 for the current executive directors
will be 125% of base salary for the CEO and 110% of base
salary for the CFO. Any increase beyond this level for the
CFO will only be applied in exceptional circumstances and
will be at the discretion of the Committee.
• Vesting will be subject to two or more performance
underpins, which will be disclosed at or around the time
ofgrant in the DRR.
• If one or more of the underpins is not met, then a portion
ofthe award up to or equal to the weighting of that
measure(s) will lapse, subject to the overall discretion set
out below.
• It is anticipated that all performance underpins will be equally
weighted, although the Committee retains the discretion to
adjust the weighting of any underpins each year.
• The Committee will select the underpins each year in order
to align with the Company’s strategy and these will
normally be disclosed at or around the time of grant, in the
DRR. At least one underpin will be based on an objective
financial metric.
• In addition, the Committee will have general discretion to
determine the most appropriate vesting levels if it believes
this will better reflect the underlying financial performance
of the Company over the period and such other factors as
itmay determine.
• provide an appropriate balance between remuneration
elements that attract, retain and motivate the highest
calibreof executive talent; and encourage a high-
performance culture by ensuring share–based
remunerationconstitutes asubstantial proportion of the
remuneration package and by linking maximum payout
opportunity to outstanding results.
Whitbread is an international-focused hotel business and our
approach is also designed to enable the Company’s long-term
objective of expansion and growth in both the UK and Germany.
The policy table below provides more detail on each key
element of remuneration for executive and non-executive
directors, including the maximum potential value of each
element, a brief summary of how it works and details of any
performance metrics.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
99
Element Purpose and link tostrategy Operation Maximum potential value Performance metrics
Sharesave scheme • To encourage long-term shareholding
in the Company.
• Annual invitation to all employees, including the
executivedirectors.
• Option price calculated by reference to the market price
discounted by 20% on the invitation date.
• Options granted subject to participant agreeing to save over
a three- and/or five-year period.
• In the event an employee working in Germany is made an
executive director, they will be eligible to participate in the
International Sharesave scheme (which is aligned with the
scheme for UK-based employees).
• Consistent with prevailing HMRC limits, currently savings
limited to £500 per month.
• None.
Pension • Pension benefits are provided in order
to offer a market competitive
remuneration package that is sufficient
to attract and retain executive talent.
• Executive directors are entitled to participate in the
Company’s pension scheme (or other pension arrangements
relevant to their location if based overseas).
• Defined contribution scheme.
• Can elect for cash in lieu of pension contributions.
• The current contribution rate is 15% of base salary (as of
1 May 2022) for incumbent executive directors. This will
reduce to 10% of base salary effective from 31 December
2022, which is aligned with the rate available to the majority
of the wider workforce.
• For any new appointment, the contribution will be up to a
maximum of 10% of salary (although the actual level will be
determined based on all relevant factors at the time of
appointment, including having regard to the pension
contribution rates available to the majority of the workforce).
• None.
Chairman and
non-executive
director fees
• To attract and retain a Chairman and
non-executive directors of the
highestcalibre.
• The Chairman receives an annual fee and the non-executive
directors receive a base fee, with additional fees for acting
as the Senior Independent Director or for chairing, or being
a member of, the Audit or Remuneration Committees or
any other Board Committee as may be constituted from
time to time.
• The Chairman and non-executive directors are entitled to
claim all reasonable expenses, and the Company may settle
any tax incurred, but do not receive any other fees or
remuneration in connection with their roles at Whitbread.
• The fees are reviewed annually by the Board (excluding the
non-executive directors), taking into account a range of
factors including the time commitment required of the
directors, the responsibilities of the role and the fees paid by
other similar companies.
• Non-executive director fees must remain within the
aggregate limit approved by shareholders from time to
time. The current aggregate limit is £700,000 (excluding
the Chairman’s fee and additional fees, such as for
committee membership).
• None.
Directors’ service contracts
The key terms of the executive directors’ service contracts are as follows:
• notice period — nine months by the director and 12 months by the Company;
• termination payment – details of the termination policy are set out in our remuneration policy, which can be found on the
Company’s website at whitbread.co.uk/governance;
• sickness — full salary for a maximum of 12 months in any three-year period or for a maximum of nine consecutive months; and
• non-compete — for six months after leaving or being put on garden leave.
The dates of the executive directors’ service contracts are as follows:
Dominic Paul 28 June 2022
Hemant Patel 26 January 2022
Executive directors’ service contracts are available for inspection by any person at the Company’s registered office during
normal office hours and on the Company’s website at www.whitbread.co.uk. The executive directors are entitled to retain fees
from external directorships.
The effective dates of the letters of appointment of the Chairman and the non-executive directors are as follows:
Adam Crozier 1 March 2018
David Atkins 1 January 2017
Kal Atwal 1 March 2021
Horst Baier 1 November 2019
Fumbi Chima 1 March 2021
Frank Fiskers 1 February 2019
Richard Gillingwater 27 June 2018
Karen Jones 9 January 2023
Chris Kennedy 1 March 2016
Cilla Snowball 24 January 2023
The Chairman and non-executive directors were each appointed for an initial three-year term and are subject to annual
reelection at the AGM.
Whitbread Annual Report and Accounts 2022/23
100
Corporate Governance
Directors’ remuneration policy
Element Purpose and link tostrategy Operation Maximum potential value Performance metrics
Sharesave scheme • To encourage long-term shareholding
in the Company.
• Annual invitation to all employees, including the
executivedirectors.
• Option price calculated by reference to the market price
discounted by 20% on the invitation date.
• Options granted subject to participant agreeing to save over
a three- and/or five-year period.
• In the event an employee working in Germany is made an
executive director, they will be eligible to participate in the
International Sharesave scheme (which is aligned with the
scheme for UK-based employees).
• Consistent with prevailing HMRC limits, currently savings
limited to £500 per month.
• None.
Pension • Pension benefits are provided in order
to offer a market competitive
remuneration package that is sufficient
to attract and retain executive talent.
• Executive directors are entitled to participate in the
Company’s pension scheme (or other pension arrangements
relevant to their location if based overseas).
• Defined contribution scheme.
• Can elect for cash in lieu of pension contributions.
• The current contribution rate is 15% of base salary (as of
1 May 2022) for incumbent executive directors. This will
reduce to 10% of base salary effective from 31 December
2022, which is aligned with the rate available to the majority
of the wider workforce.
• For any new appointment, the contribution will be up to a
maximum of 10% of salary (although the actual level will be
determined based on all relevant factors at the time of
appointment, including having regard to the pension
contribution rates available to the majority of the workforce).
• None.
Chairman and
non-executive
director fees
• To attract and retain a Chairman and
non-executive directors of the
highestcalibre.
• The Chairman receives an annual fee and the non-executive
directors receive a base fee, with additional fees for acting
as the Senior Independent Director or for chairing, or being
a member of, the Audit or Remuneration Committees or
any other Board Committee as may be constituted from
time to time.
• The Chairman and non-executive directors are entitled to
claim all reasonable expenses, and the Company may settle
any tax incurred, but do not receive any other fees or
remuneration in connection with their roles at Whitbread.
• The fees are reviewed annually by the Board (excluding the
non-executive directors), taking into account a range of
factors including the time commitment required of the
directors, the responsibilities of the role and the fees paid by
other similar companies.
• Non-executive director fees must remain within the
aggregate limit approved by shareholders from time to
time. The current aggregate limit is £700,000 (excluding
the Chairman’s fee and additional fees, such as for
committee membership).
• None.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
101
Share-based awards under the AIS and RSP may:
a)  be delivered as nil-cost options, forfeitable shares, conditional share awards or equivalent cash-settled instruments; and
b)  be adjusted in the event of any variation of the Company’s share capital or in any other circumstances the Committee
considers it appropriate.
Illustration of application of remuneration policy
The graphs below show how the Policy will be applied in 2023/24, with details of expected remuneration levels for each director
for below threshold performance, for on-target performance and for maximum performance.
Executive directors – potential value of 2023/24 package
Dominic Paul
Below threshold
91%
£1,010,000
On target
Maximum
Maximum, with 50%
share price growth
£4,227,500
40%18%22%
31%
£3,665,000
25%
39%
£2,900,000
32%
9%
2%
2% 21% 21%
3% 13% 13%
18%
Hemant Patel
Below threshold
91%
£603,495
On target
Maximum
Maximum, with 50%
share price growth
Salary and benefits
£2,380,503
37%19%23%
28%
£2,088,775
26%
36%
£1,637,873
34%
9%
2%
3%
22% 22%
3% 14% 14%
19%
Pension Cash incentive Deferred shares RSP
The table below sets out the assumptions used in the above scenario charts:
Below threshold On target Maximum
• Only the fixed pay elements are
received (base salary, benefits
andpension).
• Salary reflects what will be paid in
2023/24. The CEO’s salary was set on
appointment and will not increase from
1 May 2023. For the CFO, this means
the salary has been pro-rated to reflect
the increase from 1 May 2023.
• Benefits are included at the value in
the 2022/23 single figure table. As the
incumbent CEO was not on the Board
during most of 2022/23, we have
taken the outgoing CEO’s benefits for
2022/23 as a representative figure.
• Fixed pay elements plus target annual
bonus and RSP.
• Incentives are based on salaries at
1 May 2023.
• On target pay for the annual incentive
award has been included at 50% of
the maximum award (170% for
eachdirector).
• On target pay for the RSP has
beenincluded at 100% of the
2023/24 maximum award (125% of
salary for the CEO and 110% of salary
for the CFO).
• Fixed pay elements plus maximum
annual incentive award and RSP,
withvalues as set out to the left.
• An additional scenario sets out the
value of the RSP assuming a 50%
increase in share price between
grantand vesting.
Whitbread Annual Report and Accounts 2022/23
102
Corporate Governance
Directors’ remuneration policy
Remuneration Committee – membership
Name of director
Meetings attended and
eligible to attend
Frank Fiskers (Chairman) 5/5
David Atkins 5/5
Kal Atwal 5/5
Adam Crozier 5/5
Richard Gillingwater 5/5
Karen Jones
1
1/1
1 Karen Jones was appointed to the Board on 9 January 2023.
Remuneration Committee – responsibilities
• Set the broad policy for the remuneration of the Chairman
and members of the Executive Committee, including the
executive directors.
• Within the terms of the agreed policy, determine the total
individual remuneration package (including incentive
payments, share awards and other benefits) of the Chairman
and each executive director.
• Monitor the structure and level of remuneration of Executive
Committee members.
• Approve the design of, and determine the targets for,
executive incentive schemes.
• Approve awards to be made to executive directors and
other senior executives under incentive schemes.
• Ensure that contractual terms on termination, and any
payments made, are fair to the individual and the Company,
that failure is not rewarded and that the duty to mitigate
loss is fully recognised.
• Review the alignment of incentives with the Company’s
wider culture.
• Obtain ideas and concerns from the wider workforce about
reward and take into account workforce remuneration
across the Company and externally when setting
remuneration policy for the executive directors.
In carrying out its duties, the Committee has taken into
account the principles outlined in the UK Corporate
Governance Code 2018, including provisions 40 and 41. The
Committee believes that the Company’s remuneration
structures are aligned to the Company’s culture and values.
Furthermore, the Company’s remuneration structures are
simple and clear, with executive directors receiving base salary,
an annual incentive and a long-term incentive under the RSP.
Risk is managed, with both the Annual Incentive Scheme and
the RSP being subject to malus and clawback provisions. In
addition, a poor health and safety performance would lead to
a reduced payout under the Annual Incentive Scheme and the
underpins under the RSP provide protection against any
payment for failure.
Outcomes are predictable to the extent that the Company
achieves its targets over any given performance period.
A significant proportion of an executive’s total reward is linked
to performance, with much of the reward achieved being
deferred. This helps to align the interests of executives
toinvestors.
Remuneration Committee – advisers
Internal advisers
Chris Vaughan – General Counsel and Secretary to the Committee
Rachel Howarth – Chief People Officer
Steve Jones – Reward, Pensions and Insight Director
External advisers
PwC, one of the founding members of the Remuneration
Consultants Group Code of Conduct, was appointed
remuneration consultant by the Committee with effect from
September 2017 following a rigorous tender process and
adheres to this code in its dealings with the Committee. Fees
paid to PwC in respect of advice received by the Committee
amounted to £182,750. These fees were charged on a time and
material basis.
The Committee is satisfied that the advice received is
independent and objective. The Committee is comfortable
that the PwC engagement partner and team that provide
remuneration advice to the Committee do not have
connections with the Company that may impair their
independence or objectivity. PwC also provided Whitbread
with tax and consulting advice.
Remuneration Committee agenda – 2022/23
• Approval of Annual Incentive Scheme and targets
for2022/23.
• Approval of awards of cash and deferred shares to executive
directors under the 2021/22 Annual Incentive Scheme (and
decision to not make the deferred award that had been
earned under the 2020/21 Annual Incentive Scheme).
• Executive directors’ and senior executives’ salary review.
• Approval of the 2022 awards made under the RSP.
• Approval of the 2022 remuneration report.
• Confirmation of the vesting percentage for the Long Term
Incentive Plan (LTIP) and RSP awards made in 2019 and
dueto vest in 2022 (awards that did not apply to
executivedirectors).
• Review, and resetting, of the profit target for the 2022/23
Annual Incentive Scheme
• The approach to underpins for the 2023 RSP award.
• Review of wider remuneration strategy across
theorganisation.
• Alison Brittain’s remuneration treatment on retiring from
theBoard.
• Dominic Paul’s remuneration terms on joining.
• Feedback from shareholder meetings.
• An assessment of the implementation of the Annual
Incentive Scheme.
• An update on performance against the underpins for the
2020 RSP award.
• Committee effectiveness evaluation.
• Review of the terms of reference.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
103
Annual report on remuneration
Single total figure of remuneration – executive directors (audited information)
Director
Base salary Benefits Pension Fixed pay
Annual
Incentive
Scheme
Long-term
incentive Variable pay Total
22/23
£’000
21/22
£’000
22/23
£’000
21/22
£’000
22/23
£’000
21/22
£’000
22/23
£’000
21/22
£’000
22/23
£’000
21/22
£’000
22/23
£’000
21/22
£’000
22/23
£’000
21/22
£’000
22/23
£’000
21/22
£’000
Alison Brittain
1
959 892 22 20 135 166 1,116 1,078 1,478 1,086 605
5
– 2,083 1,086 3,199 2,164
Dominic Paul
2
108 – 3 – 7 – 118 – 179 – 2,119 – 2,298 – 2,416 –
Nicholas Cadbury
3
33 606 1 20 6 112 40 739 – – – – – – 40 739
Hemant Patel
4
488 – 20 – 49 – 557 – 783 – – – 783 – 1,340 –
1 Alison Brittain’s base salary increased in May 2022 by 3% from £894,610 to £921,450. The base salary figure for 2022/23 includes an amount that relates to untaken annual
leave at retirement.
2 Dominic Paul joined Whitbread on 10 January 2023 and joined the Board and became Chief Executive with effect from 17 January 2023. The figures shown are for the part of
the year during which Dominic served on the Board. He received replacement share awards to compensate him for the awards that he forfeited at his previous employer and
these awards will vest subject to continued employment. This is included under Long-term incentive above and further details are set out on page 112. The number of awards
to be granted was calculated using the closing price of Whitbread shares on the date of Dominic’s service agreement (28 June 2022), which was £26.44. The value above has
been calculated using the same share price.
3 Nicholas Cadbury left the Company and stepped down from the Board on 21 March 2022. The figures shown for the 2022/23 financial year are for the part of the year during
which Nicholas served on the Board.
4 Hemant Patel joined the Board on 21 March 2022. The figures shown are for the part of the year during which Hemant served on the Board.
5 The Long-term incentive figure shown for Alison Brittain relates to the 2020 RSP award, which vests in April 2023. The value of the award has been calculated based on the
average closing price of a Whitbread share over the last quarter of the 2022/23 financial year (2.903.87p).
Details of each of the elements included in the table above are
as follows:
Base salary
Annual salary increases across the Group are usually effective
from 1 May each year. The base salary numbers shown in
thetable therefore include two months’ pay based on the
director’s salary from 1 May 2021 and ten months’ pay based
on the director’s salary from 1 May 2022.
Benefits
The benefits received by each executive director include
family private healthcare and a cash allowance in lieu of
acompany car.
Pension
The executive directors receive a monthly amount in cash in
lieu of pension contributions. Alison Brittain’s rate reduced
from 18% to 15% in May 2022 and then further reduced to 10%
from 31 December 2022, at which point it became aligned with
the rate available to the majority of the wider workforce. On
appointment, Hemant Patel’s and Dominic Paul’s rates were
both set at 10%. No executive director participates in a Group
defined benefit or final salary pension scheme.
Annual Incentive Scheme
2022/23 annual incentives
As outlined in the Committee Chair’s letter on page 92,
outcomes for the year are at the top end of the range,
reflecting the outstanding business performance in 2022/23.
The Committee has carefully considered whether payouts at
this level are appropriate in the context of both the economic
backdrop and with careful consideration of other stakeholders
(details of which can be found in the table on pages 95 and
96). Itwas concluded that the experience of all stakeholders
has been strong and that the payout levels fairly reflect the
outstanding performance delivered.
The incentive for 2022/23 was assessed against a combination
of profit, efficiency savings, strategic objectives and ESG
metrics. As Dominic Paul joined the business towards the end
of 2022/23, it would not have been meaningful to set strategic
objectives, therefore it was agreed that his outcome would be
based on profit, efficiency and ESG in the same proportions
that apply to the other executive directors.
The awards were calculated as set out below.
Awards based on profit measure (50% of total award for
Alison Brittain and Hemant Patel, 62.5% of total award for
Dominic Paul)
Targets for the profit element were set at the start of the year
based on budget and taking into account external consensus
at that time. The Committee noted that, although the budget
reflected a balanced view of the risks and opportunities for
theyear, the significant uncertainty in the external trading
environment could move this assessment as the year
progressed. It therefore agreed that it would be prudent
toreview the targets against the external environment at the
half year.
During the first half of the financial year, market conditions
were materially better than we anticipated when the target
was set, and the Committee determined that it was
appropriate to revise the full-year profit target upwards
toreflect this. The new target range was based on the
Company’s revised plan at the half year, taking into account
external consensus earnings at that time, which had risen since
the start of the year. The updated range is set out in the table
below and this was used to assess the final outcome.
Profit performance exceeded the revised stretch target and
the Committee carefully considered this outcome. Whilst
market conditions were not as challenging as anticipated
atthe start of the year, the Committee’s view is that this
exceptional profit outcome against the increased targets was
driven by management’s actions and in particular by materially
increasing market share through our strategic actions, with
total UK accommodation sales growth 25.2% ahead of the UK
midscale and economy market (excluding Premier Inn)
As a result, the Committee is comfortable that the maximum
outcome under this measure is a fair reflection of management
performance across the year.
Profit
Threshold £280m
Target £295m
Stretch £310m
Actual £413.4m
Outcome (% of maximum) 100%
Whitbread Annual Report and Accounts 2022/23
104
Corporate Governance
Annual report on remuneration
Awards based on efficiency target (20% of total award for Alison Brittain and Hemant Patel, 25% of total award for Dominic Paul)
This element had two levels of achievement as outlined below. Despite higher than expected inflation making the target more
difficult to achieve, stretch was exceeded with efficiency savings delivered in the year across procurement, operations and property.
Efficiency savings
Target £35m
Stretch £40m
Actual £42.3m
Outcome (% of maximum) 100%
Awards based on strategic objectives (20% of total award for Alison Brittain and Hemant Patel only)
Alison Brittain and Hemant Patel each had a number of business objectives and 20% of the maximum incentive opportunity was
linked to performance against these objectives. A summary of each of the executive directors’ objectives, together with the
incentive outcomes, is shown in the table below. Each of the objectives was equally weighted, other than the objectives related to
the implementation of the replacement booking system, which had higher weightings to reflect the project’s strategic importance.
Alison Brittain, Chief Executive
Measure Actual outcome
Achievement
per outcome
UK GROWTH AND OPTIMISATION
UK room openings 1,722 rooms opened, ahead of 1,500 target.
Pipeline growth 1,695 rooms added to pipeline vs target of 1,000.
Updated network plan with agreed
runway for growth in the UK
Updated plan presented to the Board, highlighting potential to grow
the UK & Ireland network to 125k rooms.
Room refurbishments 3,186 refurbishments completed (vs target 2,500), of which 253
were either twin rooms or ID5 (vs target 250). Also 1,942 Premier
Plus rooms ( vs target 1,000).
Strategic review of F&B offer Review completed and presented to the Board.
Strategic review of Repairs &
Maintenance
Review completed and roll-out of recommendations
havecommenced.
INTERNATIONAL GROWTH
Continue to assess Germany M&A
portfolios and other markets
All markets assessed, specific chains reviewed and the first hotel
acquired in Austria.
Acquire at least one portfolio of hotels Acquisition of a portfolio of six hotels.
Complete year 1 of Germany
profitabilityplan
In-year delivery of £20m additional profit, capital within budget and
portfolio of 18 mature hotels profitable.
Room openings 2,241 rooms opened ahead of 1,700 target.
Acquisition of organic sites Ten hotels acquired vs target of seven.
CAPABILITY, INFRASTRUCTURE & FINANCIAL
Replacement room booking system
project to be tracking to budget
This objective had an increased weighting of 5% of the overall
incentive reflecting the project’s strategic importance. Although
spend was within budget for 2022/23, additional budget has
needed to be agreed for 2023/24.
Replacement room booking system
project to be tracking to timetable and
ready for pilots.
This objective had an increased weighting of 5% of the overall
incentive reflecting the project’s strategic importance. Although the
budget objective (above) was not achieved, importantly
performance against the delivery objective was strong. The planned
pilots commenced during the year and the project is on track to go
live across the estate by the end of 2023/24, delivering us a modern
guest-focused platform enhancing our service quality and
supporting growth.
Produce savings from UK property costs
and re-gears
Delivered property savings of £7.4m (vs target £2m) and re-gears at
+£8.5m NPV (vs target £5m).
Complete pensioner buyin to reduce
longevity risk
£661m buyin transacted.
Ensure appropriate long-term financing is
in place, re-financing the revolving credit
facility (RCF)
RCF re-financed for five years with two potential one-year extensions.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
105
Measure Actual outcome
Achievement
per outcome
ESG
Be on track for delivery of carbon Scope
3 targets and SBTi accreditation for
netzero
Scope 1, 2 and 3 carbon targets submitted to SBTi and on track for
full accreditation, and on track to meet targets for all Scopes. In
addition, we have retained our AA rating with MSCI and ‘Low Risk’
rating with Sustainalytics as well as qualifying as a member of the
Dow Jones Sustainability World Index in the Consumer Services
category.
Deliver the Green Bond Framework with
associated reporting in the Annual Report
Framework delivered and included in the Annual Report. Of the
£550m bond, c.£500m has already been utilised in only two years.
Develop an ESG communications
programme, including an ESG annual
report and ESG shareholder conference
Significant increase in stakeholder ESG communications including:
ESG Capital Markets Day, 3 x ESG conferences, refreshed website
and delivery of ESG annual report.
Support new CFO to successfully step up
and establish credibility with investors
Successful delivery of prelims and interims, with positive feedback
from investors, brokers and the Board.
Achieved 75% of maximum
Hemant Patel, Chief Financial Officer
Measure Actual outcome
Achievement
per outcome
UK GROWTH AND OPTIMISATION
UK estate optimisation 1,722 rooms opened, ahead of 1,500 target. 3,186 refurbishments
completed (vs target 2,500). Also 1,942 Premier Plus rooms
(vstarget 1,000).
Improved REVPAR run-rate back to
2019/20 levels
REVPAR +25% vs 2019/20 on a like for like basis.
INTERNATIONAL GROWTH
Continue to assess Germany M&A
portfolios and other markets
All markets assessed, specific chains reviewed and the first hotel
acquired in Austria.
Review the market for appropriate
M&Aopportunities and execute one
transaction at good returns
Market fully reappraised and acquisition of a portfolio of six hotels.
Demonstrate path to mature site
profitability and deliver against
thistarget
Path to profitability with building blocks and initiatives identified to
achieve mature site target returns.
Maximise long-term margin
opportunities through cost review
Review completed.
Deliver on the German continual
financial improvement plan as the size
ofthe network increases
Financial controls audit rated Green, demonstrating considerable
improvement across all transactional and inventory management,
tax, capex and general controls, despite rapid business growth.
CAPITAL STRUCTURE/ALLOCATION AND PROPERTY OPTIMISATION
Complete pensioner buyin to reduce
longevity risk
£661m buyin transacted
Re-finance the RCF and improve German
capability across the pool of banks
RCF re-financed for five years (vs target of at least four) with two
potential one-year extensions, and including commitments that
enhanced the German banking capability.
Fully update the UK network plan to
identify further growth and optimisation
opportunities
Updated plan presented to the Board, highlighting potential to grow
the UK & Ireland network to 125k rooms.
Strengthen liquidity and ROCE through
disposal of non-core property assets
£14.3m of completed disposals was below the target of £20m.
Maintain liquidity opportunities through
identified sale and leaseback options
Property portfolio segmented quarterly and sites identified should
the Board decide to pursue this.
Produce savings from UK property costs
and re-gears
Delivered property savings of £7.4m (vs target £2m) and re-gears at
+£8.5m NPV (vs target £5m).
Whitbread Annual Report and Accounts 2022/23
106
Corporate Governance
Annual report on remuneration
Measure Actual outcome
Achievement
per outcome
GROUP PROJECTS/OTHER
Replacement room booking system
project to be tracking to budget
This objective had an increased weighting of 5% of the overall
incentive, reflecting the project’s strategic importance. Although
spend was within budget for 2022/23, additional budget has
needed to be agreed for 2023/24.
Effective management of the programme
risks associated with the replacement
room booking system project
This objective had an increased weighting of 5% of the overall
incentive, reflecting the project’s strategic importance. Although the
budget objective (above) was not achieved, importantly
performance against the delivery objective was strong. Programme
assurance was on track with actions being addressed and closed to
support being able to go live by the end of 2023/24, with a modern
guest-focused platform enhancing our service quality and
supporting growth.
Financial management of major
networks upgrade tracking to budget
with effective management of the
programme risks
Upgrade tracked to budget. Review of programme risks enabled the
identification of phasing changes to optimise the upgrade.
On time and on budget implementation
of updated finance business intelligence
and consolidation/data management tools
Implemented on time and within budget.
Landing well and with credibility
withinvestors, analysts and other
external stakeholders
Successful delivery of prelims and interims with positive feedback
from investors, brokers and the Board.
Successfully stepping up into the CFO
role with authority, establishing himself
on the Board and Executive Committee
Successfully stepped up with positive feedback.
Achieved 72.1% of maximum
Awards based on ESG measures (10% of total award for Alison Brittain and Hemant Patel, 12.5% of total award for Dominic Paul)
The ESG targets for 2022/23, together with the results, are shown below. Only half of the maximum reward was payable based
on a green result, with higher rewards available for stretch or excel performance above target.
ESG measure Amber target Green target Stretch target Excel target Result
Outcome
(% of maximum)
Scope 1 and
2 intensity
reduction vs
2016/17 base
>= 41%
reduction,
<42%
reduction
>= 42%
reduction,
<42.5%
reduction
>= 42.5%
reduction,
<43%
reduction
>= 43%
reduction
Excel: 52.5% reduction 100%
Leadership
diversity
1
Senior leadership population to be made up of:
• 40% female representation
• 6.5% ethnic minority representation
Achieved
1
: 40.4% female
and 6.7% ethnic minority
representation
100%
Premier Inn
guest
satisfaction
>or = 45.1%,
<46.6%
>=46.6%.
<47.6%
>or = 47.6%,
<48.6%
>or = 48.6% Excel: 52.4% 100%
Restaurants
customer
satisfaction
>or = 69.1%,
<70.6%
>=70.6%,
<71.6%
>or = 71.6%,
<72.6%
>=72.6% Stretch: 72.5% 75%
TOTAL 93.8%
1 This measure was assessed in a binary manner, unlike the other metrics with an amber to excel range as outlined above.
Total awards
The maximum potential award was 170% of salary and the total incentive earned is as follows:
Director
Profit
outcome
(%maximum)
Efficiency
target
outcome
(%maximum)
Strategic
objectives
outcome
(%maximum)
ESG
measures
outcome
(%maximum)
Total % of
maximum
Total % of
salary
Total
£’000
Weighting 50% 20% 20% 10%
Alison Brittain 100% 100% 75% 93.8% 94.38% 160.45% 1,478
Hemant Patel 100% 100% 72.1% 93.8% 93.79% 152.00% 783
Weighting 62.5% 25% N/A 12.5%
Dominic Paul 100% 100% N/A 93.8% 94.38%
1
19.83% 179
1 The formulaic outcome for Dominic Paul was 99.23%. On the basis of internal fairness, the Committee has applied discretion to reduce the overall AIS outcome to align with
the former CEO.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
107
In the case of Hemant Patel and Dominic Paul, half of these
awards will be paid in cash in May 2023, with the remaining
half being settled in deferred shares, which are expected to
vest in 2026. In the case of Alison Brittain, the award will be
paid wholly in cash in May 2023, in line with the approved
policy and in line with the terms agreed for her retirement.
The values outlined above for Hemant and Dominic reflect the
fact that awards were pro-rated to reflect the time served on
the Board during the year.
Long-term incentives
The 2020 RSP was awarded subject to two underpins and, for
each underpin that is not met, the Committee may reduce the
vesting outcome by up to 50%. Whilst the Committee
reviewed the formulaic outcome under each underpin, this was
just one factor within the overall assessment.
The underpins applicable to this award were as follows:
• Average return on capital employed for the UK business to
be at least equal to the weighted average cost of capital
plus 1%over the three-year period to the end of the 2022/23
financial year.
• Average lease-adjusted net debt to funds from operations
leverage to be below 4.5x over the three-year period to the
end ofthe 2022/23 financial year.
The first underpin was not met given the impact of the pandemic
on profit and therefore on ROCE. The second underpin was met,
since lease-adjusted net debt to funds from operations ratio over
the performance period was less than 4.5x.
The Committee also evaluated performance in its full context at
vesting by considering all relevant factors and metrics in
aholistic manner, rather than looking at any particular metrics in
isolation to seek a fair and balanced outcome for all stakeholders.
The factors considered by the Committee included but were
not limited to the following:
• Whether the 2020 award underpins (with the same numeric
targets) have been met in the individual years, separately to
the three-year average under the formal underpins. The
ROCE underpin was not met in 2020/21 or 2021/22 but it
was met in 2022/23; and the lease-adjusted net debt to
funds from operations leverage was met in all three years.
• The performance tracking for the 2021 RSP awards. To date,
the 2021 RSP cost efficiency underpin is performing well and
the vast majority of factors to be considered for the general
underpin are also performing well. These factors are linked to
Whitbread’s financial performance, balance sheet
performance, market share, response to the COVID-19
pandemic, recovery of shareholder value, and performance
against ESG priorities. Whitbread delivered profits of £413.4m
in 2022/23, our balance sheet is in exceptional health, with
liquidity of £1,939.8m and net cash of £171m, and we have
gained market share in every year of the performance period,
especially in 2022/23 where we outperformed the UK
(excluding Premier Inn) vs 2019/20 by +25.2%
• How the post-pandemic recovery of the business has been
driven; measured both in strict numeric values and also vs
the market. The Committee recognises the exceptional
performance of the Whitbread leadership team in this
regard, with achievements including enhanced hygiene and
social distancing measures implemented; discretionary costs
cut immediately followed by tight cost control and capital
discipline; during the initial lockdown, keeping 39 hotels
open for NHS staff and key front-line workers; team
members being furloughed with pay for all team members
topped up to 100% for the first three months; significant
organisational design and restructuring of operations and
Support Centre; and commercial strategy implemented to
outperform the market and maximise returns.
• The extent to which shareholder value is delivered, taking
into account the external environment. The Committee
recognises that, in light of the COVID-19 pandemic,
Whitbread’s TSR performance has suffered to a greater
extent than the FTSE 100 Index – as our sector has been one
of the most significantly and directly impacted by the
pandemic. However, Whitbread’s TSR performance has been
ahead of FTSE 350 Travel and Leisure index and dividend
payments have been restored, with a final dividend per
share of 49.8p for 2022/23.
When considering performance in the round, the Committee
noted the strong performance of the Whitbread leadership team
over the period, including its resolute steering of the business
through the challenges of the pandemic, significantly increasing
our market share when we were legally permitted to trade and
setting up the Company for future growth opportunities. The
Committee believes that management has delivered everything
that was possible given the environment we were operating
within, and this is demonstrated by the strong 2022/23
outcomes. The Committee also considered the experience of the
Company’s other stakeholders through the whole period.
However, the Committee is cognisant of the fact that
shareholder returns have also been impacted by the wider
environment and the performance relative to the underpins
and that government support was received for two of the
three years of the period (albeit that for a significant part of
this period, we were either unable to open or subject to severe
restrictions).
Given all the factors outlined above, based on the overall
assessment of performance, the Committee determined to
reduce the overall vesting level by 50%. The Committee is
satisfied that this reduction is a fair and reasonable outcome
for all stakeholders, and duly balances the underpin
performance with the overall recovery of the business in an
extremely challenging external environment.
Windfall gains
The Committee has separately considered whether any
‘windfall’ gain had arisen as a result of this award being
granted in 2020. There is no fixed definition of a ‘windfall’ gain;
however, the principle is an executive benefiting from
receiving more shares as a result of share price fall, and
therefore a higher £ value if the share price subsequently
increases. In our case, whilst the share price fell materially
between 2019 and 2020, it continued to fluctuate as the
pandemic progressed. The share price growth from grant to
the decision on vesting was 8.9% p.a. which, whilst strong, was
not considered to be an exceptional growth rate.
Whitbread Annual Report and Accounts 2022/23
108
Corporate Governance
Annual report on remuneration
Notwithstanding the above, given the material fall in our share price around the time of grant, the Committee has agreed that it
is appropriate to make a reduction to the number of shares vesting to reflect windfall gains.
The Committee has considered a number of reference points to inform this adjustment, including the average share price over the
12-month period prior to grant, the previous incentive awards granted in 2019, the share price growth and recovery since grant, as
well as the material reduction already applied when assessing the underpins. Balancing all of these factors, the Committee has
determined to reduce the number of shares vesting by a further 10%.
Consequently once the share reduction for windfall gains is applied, the Committee determined that the overall vesting level of the
2020 RSP awards should be at 45% of the amount awarded. This reflects a further 10% reduction for windfall gains to the 50%
vesting outcome based on the performance assessment as set out above. The Committee is confident that this reflects a fair and
reasonable outcome.
The number and value of shares vesting for Alison Brittain under the RSP is as follows:
Director
Number of shares
granted
Number of shares
vesting
Estimated value at
vesting date
(£’000)
Alison Brittain 46,297 20,834 605
The share price used to calculate the value at vesting was 2,903.87p, which was the average closing price of a Whitbread share in
the final quarter of the 2022/23 financial year. The estimated value attributable to share price movement since grant was £111,643.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
109
Single total figure of remuneration – Chairman and non-executive directors (audited information)
Director
Base fee
Senior Independent
Director fee
Fee as Chairman of
aBoard Committee
Fee as a member of
aBoard Committee Total
22/23
£’000
21/22
£’000
22/23
£’000
21/22
£’000
22/23
£’000
21/22
£’000
22/23
£’000
21/22
£’000
22/23
£’000
21/22
£’000
Adam Crozier 420 408 – – – – – – 420 408
David Atkins 64 62 – – – – 10 10 75 72
Kal Atwal 64 62 – – – – 5 5 69 67
Horst Baier 64 62 – – – – 5 5 69 67
Fumbi Chima 64 62 – – – – 5 5 69 67
Frank Fiskers 64 62 – – 21 20 5 5 90 87
Richard Gillingwater 64 62 15 15 – – 5 5 85 82
Karen Jones
1
9 – 1 10 –
Chris Kennedy 64 62 – – 21 20 – – 85 82
Cilla Snowball
1
7 – 1 7 –
1 Karen Jones and Cilla Snowball joined the Board on 9 January 2023 and 24 January 2023 respectively.
None of the Chairman or non-executive directors are entitled to any additional benefits.
Statement of directors’ shareholding and share interests (audited information)
The Committee believes that the shareholding requirements for executives play an important role in the alignment of the
interests of executives and shareholders and help to incentivise executives to deliver sustainable long-term performance.
The Chief Executive Officer’s shareholding requirement is 300% of salary and the Chief Financial Officer’s is 200% of salary. All
shares vesting from incentive plans cannot be sold until the shareholding requirement has been met. The Chairman and the
non-executive directors are each required to build a holding to the value of 100% of their annual fee over a three-year period.
The table below shows the holdings of directors as at 2 March 2023:
Director
Ordinary
shares
Share
awards
1
Value based
on input
price
£’000
Value based
on market
price
£’000
Requirement
% of
salary/base
fee
% of salary
based on
input price
% of salary
based on
market price
Share
awards not
counting
towards
requirement
CHAIRMAN
Adam Crozier 13,930 – 455 405 100 108 96 –
EXECUTIVE DIRECTORS
Alison Brittain 146,621 36,763 5,191 4,823 300 563 523 117,264
Nicholas Cadbury
2
39,099 19,172 1,678 1,430 200 282 240 46,419
Hemant Patel 4,925 23,462 499 504 200 97 98 38,726
Dominic Paul 21,588 121,063 2,332 2,490 300 259 277 –
NON-EXECUTIVE DIRECTORS
David Atkins 3,137 – 99 91 100 154 142 –
Kal Atwal 2,063 – 60 60 100 94 93 –
Horst Baier 2,400 – 84 70 100 131 108 –
Fumbi Chima 2,061 – 60 60 100 94 93 –
Frank Fiskers 3,865 – 110 112 100 171 175 –
Richard Gillingwater 2,000 – 70 58 100 109 90 –
Karen Jones 275 – 9 8 100 13 12 –
Chris Kennedy 3,270 – 97 95 100 152 148 –
Cilla Snowball 2,258 – 69 66 100 108 102 –
1 The market price used was the average for the last quarter of the financial year (2,903.87p). The number of share awards shown is the full number, but the valuation of those awards
has been reduced to reflect deductions to be made at the point of exercise in respect of income tax and national insurance contributions. The awards include deferred shares
awarded under the Annual Incentive Scheme and vested, but unexercised awards under the Long Term Incentive Plan, the Restricted Share Plan and the Recruitment and Retention
Scheme. All share awards are structured as nil-cost options onvesting.
2 Nicholas Cadbury left Whitbread and stepped down from the Board on 21 March 2022. The information provided in the table above is as at that date.
There has been no change to the interests in the tables shown on this page between the end of the financial year and the date
of this report.
Whitbread Annual Report and Accounts 2022/23
110
Corporate Governance
Annual report on remuneration
Options exercised (audited information)
The following options were exercised by executive directors under the Company’s share schemes during the year.
Director Scheme Number of shares Exercise price Exercise date
Market price on
exercise
(p)
Alison Brittain AIS 9,205 N/A 26-May-22 2,716.6
LTIP 17,430 N/A 26-May-22 2,716.6
Hemant Patel AIS 349 N/A 26-May-22 2,716.6
R&R 2,378 N/A 26-May-22 2,716.6
Key
AIS: Deferred shares awarded in prior years under the Annual Incentive Scheme.
LTIP: Shares awarded in prior years under the Long Term Incentive Plan.
R&R: Shares awarded in prior years under the Recruitment & Retention Scheme.
Awards granted
The tables below outline the share awards granted during 2022/23. Awards were granted using the average closing price of a
Whitbread share for the five trading days immediately prior to the grant, excluding any days on which dealing in Whitbread
shares by management was prohibited.
Deferred share awards under the Annual Incentive Scheme
50% of the total annual incentive earned in respect of performance during 2021/22 was deferred into shares, as detailed below.
Deferred share awards are subject to continued employment, but are not subject to further performance conditions.
Director Scheme Date of award
Number of
shares
Market price
(p)
Total value
(£’000) Vesting date
Alison Brittain AIS 28.04.22 19,228 28.236 543 28.04.25
Hemant Patel AIS 28.04.22 6,950 28.236 196 28.04.25
Key
AIS: Awards made under the Annual Incentive Scheme
RSP: Awards made under the Restricted Share Plan
2022 Restricted Share Plan
Awards were granted under the Restricted Share Plan as detailed below:
Director Scheme
% of base
salary
awarded Date of award
Number of
shares granted
Share price
used (p)
Face value of
award at grant
(£’000) Vesting date
Alison Brittain
1
RSP 125% 28.04.22 39,604 28.236 1,118 28.04.25
Dominic Paul
2
RSP 125% 27.02.23 40,920 27.492 1,125 27.02.26
Hemant Patel RSP 110% 28.04.22 20,063 28.236 566 28.04.25
1 In line with Alison’s departure terms, the vesting of her 2022 RSP award is subject to time pro-ration, alongside the underpin assessment outlined below. Further details are
set out on page 112.
2 As outlined on page 112, as part of his joining arrangements, Dominic was granted a 2022 RSP award, subject to the same underpin assessment as other participants. This
award was made on 27 February 2023 with the number of shares determined based on the five trading days immediately prior to his joining the Company (excluding any
days on which dealing in Whitbread shares by management was prohibited) which is the established method for new joiners. See page 112 for further details on Dominic’s
remuneration on appointment.
Key
RSP: Awards made under the Restricted Share Plan.
Performance metrics
The awards made under the Restricted Share Plan will vest after three years, and are subject to two underpins being met. They
will then be subject to a two-year holding period.
The first of the underpins is a balanced overall assessment of performance and delivery against strategic priorities. The
Committee will determine whether the underpin has been met based on the Group’s underlying performance and delivery
against its strategic priorities over the performance period that will drive long-term shareholder value. In doing so, the
Committee will take into account factors it considers to be appropriate in the round. Such factors may include the Group’s
financial performance, balance sheet strength, market share, response to the COVID-19 pandemic and recovery of shareholder
value and performance against environmental, social and governance priorities. The default should be that the underpin will be
met in the absence of clear evidence of management failure or significant underperformance. If there is evidence of clear
management failure or significant underperformance, the underpin will not be met.
The second underpin is a cumulative cost efficiency saving of £60m over the three-year performance period. The underpins will
be measured up to the end of the 2024/25 financial year.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
111
Remuneration terms for Dominic Paul’s appointment
Dominic Paul joined Whitbread on 10 January 2023 and became Chief Executive Officer with effect from 17 January 2023.
Dominic will be paid a salary of £900,000, and his incentive opportunities are in line with both his predecessor and the
approved policy.
Dominic was eligible to participate in the 2022/23 AIS scheme on a pro-rated basis, based on the same maximum opportunity
as current Executive Directors. Further details on 2022/23 AIS outcomes can be found on page 97.
As outlined in the Chair’s letter, Dominic has been granted replacement share awards under the Whitbread Restricted Share Plan
to compensate him for the awards that he forfeited as a result of his resignation from his previous employer.
In line with our approach to remuneration on recruitment, we replaced these forgone awards with awards of Whitbread shares,
taking into account the value of the award and performance to date against the conditions attached to vesting. In replacement
for the most recent LTIP cycle at his previous employer, Dominic was awarded a 2022 RSP award, with the same underpins as for
the other Executive Directors, as set out on page 115. The other replacement awards are subject to continued employment, with
vesting dates aligned to the awards they are replacing, and are not subject to further performance conditions.
Incentive
foregone Date of award
Number of
shares
Face value of
award
(£’000)
1
Vesting
date
Holding
period
post-vesting
FY22 bonus 17 January 2023 9,071 240 15 April 2026 None
2020 deferred bonus award 17 January 2023 6,545 173 15 March 2023 None
2021 deferred bonus award 17 January 2023 6,808 180 15 March 2025 None
2020 LTIP 17 January 2023 30,505 807 15 September 2023 Two years
2021 LTIP 17 January 2023 27,214 720 15 September 2024 Two years
TOTAL 80,143 2,119
1 The number of awards to be granted was calculated using the closing price of Whitbread shares on the date of Dominic’s service agreement (28 June 2022), which was
£26.44. The face value has been calculated using the same share price.
Remuneration terms for Alison Brittain’s departure
Alison Brittain retired from the Board and left the Company on 2 March 2023. Alison received her salary, benefits and pension
allowance and participation in the 2022/23 Annual Incentive Scheme as usual until the date of leaving the Company. There was
no pay in lieu of notice. In line with the approved remuneration policy, Alison was treated as a ‘good leaver’ on her retirement
from the Company. In accordance with the Policy: unvested deferred share awards earned in respect of annual incentive
schemes prior to 2022/23 will vest in full on their original vesting dates; the 2020 RSP award vested on its original vesting date
at 45% of maximum and the awards made under the RSP in 2021 and 2022 will vest on their original vesting date, subject to the
assessment of underpins at that time, and will be pro-rated based on service during the performance period. The post-
employment shareholding requirements will apply.
Payments to past directors (audited information)
As disclosed in last year’s remuneration report, Louise Smalley was treated as a ‘good leaver’ and her 2020 RSP award was
eligible for vesting subject to assessment of the performance conditions and time pro-rating. The value of the award that vested
was as follows:
Past Director
Number of shares
granted
Number of shares
after pro-ration
Number of shares
vesting
Estimated value
at vesting date (£’000)
Louise Smalley 18,295 9,172 4,127 120
The share price used to calculate the value at vesting was (2,903.87p), which was average closing price of a Whitbread share in
the final quarter of the 2022/23 financial year.
With the exception of regular pension payments and dividends on Whitbread shares and the exercise of share awards as
permitted under the rules of the Company’s share schemes, no other payments were made during the year to past directors.
Chief Executive’s remuneration
Whitbread is in the hospitality business and has a large workforce of over 40,000 team members who are employed directly by
the business, with the majority being in hourly paid customer facing roles in our hotels and restaurants. We have an aligned set
of reward principles for all employees which includes a core principle to offer competitive pay rates at all levels, reflecting our
position as a leading organisation in the hospitality sector. This enables us to attract and retain the right talented people for our
winning teams.
For our hourly paid team members, we benchmark other hospitality companies to ensure we are competitive when comparing
pay with similar organisations and we operate an approach to pay which increases pay for skills progression with clear and
transparent pay rates for each role that increase as new skills are developed. For our Chief Executive, we benchmark against the
FTSE 31-100 (removing any non-comparative industries such as Financial Services, Oil & Gas and Natural Resources, which
include significantly higher levels of remuneration) and this allows us to have an appropriate comparison for this role in
oursector.
Annual report on remuneration
Whitbread Annual Report and Accounts 2022/23
112
Corporate Governance
As noted in previous years, the Chief Executive has a high level of variable pay, which impacts the CEO pay ratio. For 2022/23
this has led to the median pay ratio increasing from 105:1 in 2021/22 to 141:1. This is due to the outcome under the annual
incentive award being higher than the payout under the annual incentive last year. In addition, an RSP award has vested in the
year and is included in the Chief Executive’s single figure and, therefore, is taken into account when calculating the CEO
payratio.
All three of the UK employee reference points compare our Chief Executive’s remuneration with that of hourly paid team
members in customer-facing roles in the operational sites and again there is relatively limited difference in the 25th, median and
75th percentile ratios as shown below. Given this, we believe the median pay ratio is consistent with the reward policies for our
UK employees. Whitbread has continued to use Option A to calculate its ratio, as the data required is readily available and this
option provides the most accurate comparison as the figures are calculated on a like-for-like basis.
The table below shows how the total pay of the Chief Executive compares with our UK employees at the 25th, median and 75th
percentile. For 2022/23, the Chief Executive remuneration is a blend of Alison Brittain and Dominic Paul for their respective
times as Chief Executive as set out below:
Year Method 25th percentile pay ratio Median pay ratio 75th percentile pay ratio
2022/23 Total pay (FTE): £20,800 £21,632 £23,171
Total pay & benefits
(FTE):
£21,326 £22,224 £23,938
Pay ratio (Option A): 147:1 141:1 131:1
2021/22 Total pay (FTE): £19,341 £20,138 £21,594
Total pay & benefits
(FTE):
£19,659 £20,592 £22,153
Pay ratio (Option A): 110:1 105:1 98:1
2020/21 Pay ratio (Option A): 55:1 53:1 50:1
2019/20 Pay ratio (Option A): 150:1 143:1 134:1
The figures were calculated on 27 February 2023 (the ‘snapshot date’) and use the single figure methodology (salary, benefits,
annual incentive, LTIP, pension) and for the Chief Executive this is taken as a blend of Alison Brittain and Dominic Paul’s total
single figure remuneration for 2022/23 for their respective times as CEO of £3.141m.
1 2
Annual percentage change in remuneration
Whitbread PLC has no employees, but for information purposes, the Chief Executive’s remuneration (including base salary,
benefits and annual incentive payment) increased by 17.2% in the year, compared with an increase of 1.5%
*
for the Group’s
employees as a whole.
* This reflects changes in the workforce in addition to pay increases. The average pay increase during 2022/23 for employees employed for the full year was 7%
Ten-year history of Chief Executive remuneration
The following table shows the Chief Executive’s pay over the last ten years, with details of the percentage of maximum paid out
under the Annual Incentive Scheme and the LTIP/RSP vesting percentage for each year.
Year Chief Executive
Single total figure of
remuneration £’000
% of maximum annual
incentive achieved
% of LTIP/RSP
awardvesting
2022/23 Alison Brittain 3,199
1
94.4 45.0
Dominic Paul 2,416
2
94.4 N/A
2021/22 Alison Brittain 2,164 71.4 N/A
2020/21 Alison Brittain 1,032 0.0 N/A
2019/20 Alison Brittain 2,636 56.7 36.0
2018/19 Alison Brittain 5,588 54.8 0.0
2017/18 Alison Brittain 2,336 64.1 38.3
2016/17 Alison Brittain 2,509 49.8 76.5
2015/16 Alison Brittain 634 38.8 N/A
Andy Harrison 2,423 38.8 97.2
2014/15 Andy Harrison 4,554 86.8 100.0
2013/14 Andy Harrison 6,374 82.6 100.0
1 In determining the combined CEO remuneration for 2022/23 for the purposes of the CEO pay ratio, Alison Brittain’s remuneration in respect of the period to 17 January 2023
only has been used (£2,845m), reflecting that Dominic Paul became CEO with effect from the close of the Board meeting held on that day..
2 Includes a value of £2.12m that Dominic Paul received as replacement share awards to compensate him for the awards that he forfeited at his previous employer. This has not
been taken into account when determining the CEO pay ratio (£0.297m used in the CEO pay ratio).
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
113
Comparison of executive remuneration policy
with wider employee population
When reviewing the executive directors’ remuneration policy,
the Remuneration Committee takes into consideration the pay
and employment conditions of all employees across the
Group. Remuneration was discussed at the Our Voice Pan-
Whitbread Forum and during the year the Remuneration
Committee considered wider workforce remuneration and its
alignment with executive remuneration together with the key
themes from employee engagement.
This section describes each element of the executive
remuneration package and explains the extent to which those
elements are made available to the wider employee population.
Base salary
The base salaries of all employees, including the executive
directors, are subject to annual review. Under normal
circumstances, the annual increase in salary for an executive
director will be in the same range as the increase for
employees across the Group.
Benefits
Approximately 450 employees across the Group are entitled
to a company car or cash in lieu of a company car. The scheme
is structured so that the level of the allowance is on a sliding
scale, with employees on higher grades receiving a larger
allowance. The executive directors are no longer entitled to a
company car under this scheme but are entitled to receive
cash in lieu of acar.
Approximately 2,200 employees are entitled to participate in
the Group’s private healthcare scheme, with 800 of these,
including the executive directors, entitled to family cover. In
addition, a small number of senior executives, including the
executive directors, are entitled to annual health screening.
All employees receive discounts on Company products, but
the executive directors have waived their right to this benefit.
Whitbread’s Sharesave scheme is a standard HMRC approved
SAYE scheme. It is offered to all employees in the UK and
Germany, including the executive directors, on equal terms.
Annual Incentive Scheme
Approximately 4,250 employees are eligible to take part in an
annual incentive scheme linked to the achievement of financial
and other business targets. The maximum opportunity is
dependent on role. Approximately 50 employees, including
the executive directors, are entitled to participate in the
Annual Incentive Scheme, with maximum payouts split
between cash and deferred share awards, ranging from 60%
to170% of base salary.
Approximately 100 employees, including the executive
directors, are given individual strategic objectives in addition
to the financial and other business targets mentioned above.
Restricted Share Plan
Approximately 50 employees, including the executive directors,
participate in the RSP. This plan is not available to the wider
employee population, although the Sharesave scheme provides
employees with a form of long-term incentive.
Pension
Like all employees, the executive directors are entitled to
participate in the Company’s pension scheme. The scheme
isadefined contribution scheme. Employees below the
executive level are able to choose a contribution rate of
between 5% and 10% and have this matched by the Company.
Employees who do not choose to participate may be
automatically enrolled, with contributions in line with the
automatic enrolment regulations.
Since 31 December 2022, the executive directors receive
Company contributions of 10% of base salary, which aligns
with the contribution rate offered to the majority of the wider
workforce. The upper limit for new joiners continues to be 10%
of base salary as agreed in the previous policy. Contributions
can be allocated to the individual’s pension or taken as cash.
Relative importance of spend on pay
The table below compares the change in total expenditure on
employee pay during the year with the change in dividend
payments and share buybacks.
2021/22 2022/23 % change
Employee costs £678.9m £784.2m 15.5%
Dividends £- £119.1m N/A
Implementation of remuneration policy in 2023/24
Base salary
Dominic Paul, having recently been appointed, will not be
entitled to receive a salary increase in May 2023. Hemant Patel
will receive a salary increase of 3% in May 2023, which is lower
than the increases in pay for salaried employees across the
organisation. The base salaries of the executive directors with
effect from 1 May 2023 will be as follows:
Director
Base salary at
1 May 2023
£’000
Base salary at
1 May 2022
£’000
Dominic Paul 900 N/A
Hemant Patel 530 515
Benefits and pension
The benefits received by each executive director will continue
to include family private healthcare, a cash allowance in lieu
of a company car and cash allowances at 10% of salary in lieu
of pension.
Annual Incentive Scheme
To be eligible to receive incentive payments, there are
‘gateway’ requirements relating to leadership behaviour.
Anyincentive payments will be at the discretion of the
Remuneration Committee in the event that the health and
safety score is red on the WINcard. The expectation is that our
leaders’ actions reflect Whitbread’s values and Code of
Conduct, including our approach to health and safety. Keeping
our team and customers safe is not an incentive lever but
acore responsibility that earns the right to achieve
incentivised rewards. The Committee has the discretion to
amend formulaic outcomes.
The measures and weightings for the 2023/24 annual incentive
are therefore as follows:
Measure Weighting
Profit performance 50%
Efficiency 20%
Strategic objectives 20%
ESG measures 10%
Financial measures
The targets of the two financial metrics, which make up 70%
of the annual incentive, are considered by the Board to be
commercially sensitive and, for that reason, are not disclosed
in advance. The Committee intends to disclose the targets
retrospectively in the 2023/24 report.
Whitbread Annual Report and Accounts 2022/23
114
Annual report on remuneration
Corporate Governance
Strategic objectives
Each executive director also has business objectives aligned
with the Group’s strategic priorities. They will be eligible to
receive up to 20% of the maximum incentive opportunity
based on the delivery of these objectives. Some of the
objectives have measures with clear threshold, on-target and
stretch targets, whereas others will be objectively assessed
against a stretch level of performance. All measures are
quantifiable and linked to the business plan and future
financial performance. For both executives, objectives have
been set under the following areas:
• grow and innovate in the core UK market;
• focus on our strengths to grow in Germany; and
• enhance our capabilities to support long-term growth.
ESG
The 10% allocation to ESG measures will be split between:
• reduction in carbon emissions;
• diversity in our senior leadership population; and
• reduction in water use.
Cash awards will be made in May 2024, with deferred equity
issued in April or May 2024 and due to vest in 2027, with no
further performance conditions applying.
Restricted Share Plan
Awards will be granted at 125% of salary for Dominic Paul and
110% of salary for Hemant Patel. The awards will be subject to
two underpins and, subject to these underpins being met, are
expected to vest in 2026, after which they will be subject to a
two-year holding period.
As explained in last year’s report, it was intended to return to
the type of Restricted Share Plan underpins which were
originally used when the Plan was developed and it has been
decided that it is both possible and appropriate to do this for
the 2023 award. Therefore, the underpins will be:
• the Company’s average lease-adjusted net debt to FFO
leverage ratio being less than 4.7x; and
• the Company’s average ROCE for the UK business to be 9%
orhigher.
The FFO leverage ratio underpin is fully in line with our original
approach other than a change in the level from 4.5x to 4.7x,
which is solely to reflect the accounting change under IFRS 16,
whereby lease interest and depreciation is now recognised
through the P&L, in place of accounting rent. Excluding the
accounting change, the level is equivalent with the 2020
RSPunderpin.
The ROCE underpin under the 2020 RSP award was relative to
our WACC – specifically, that ROCE for the UK business should
be at least WACC+1%. For 2023, the underpin has been set at a
fixed average ROCE of 9% for the following reasons:
• A fixed % ROCE underpin is a more stable underpin during
periods of market volatility that can impact WACC over the
short term. It also provides greater clarity to participants,
whilst ensuring expectations for shareholder returns are met.
• An underpin of 9% ROCE for the UK business is consistent
with our historical levels of return over the decade prior to
2019/20, with an appropriate discount to acknowledge that
the underpin should act as a guard against management
failure, rather than as a performance condition.
• Focusing this underpin on the returns in the UK business
remains appropriate given that: (i) the vast majority of our
capital is invested in the UK, and it is essential that we
maintain UK returns at the target level; and (ii) we are
investing significant capital in Germany, and returns tend to
be lower in the early years of a hotel’s maturity, and
therefore including Germany at this stage could act as
adisincentive to management to invest in Germany.
Weintend to keep this under review going forward.
In concluding that these are the appropriate underpins,
theCommittee consulted with major shareholders before
finalising them.
Chairman’s fee
The Chairman received a 3% increase in his fee with effect
from 1 March 2023, taking his annual fee to £432,860.
Non-executive director fees
The base annual fee for non-executive directors increased on
1 March 2023 by 3% to £66,230. The fees for the chairmanship
of the Audit Committee and the Remuneration Committee
were increased to £21,220. The fee for the Senior Independent
Director increased to £15,920 and the fees for membership of
the Audit and Remuneration Committees increased to £5,310.
Statement of shareholder voting
The advisory resolution to approve the 2021/22 annual report
on remuneration, together with a resolution to approve the
Directors’ remuneration policy, was put to shareholders for
approval at the 2022 AGM and the resolutions were passed.
For further details on engagement with shareholders in
relation to the voting results, please see page 93.
The voting results were as follows:
Resolution For Against Total Withheld
Annual
report on
remuneration
76,536,853
(61.6%)
47,800,014
(38.4%)
124,336,867 3,468,045
Directors’
remuneration
policy
109,378,984
(85.7%)
18,280,422
(14.3%)
127,659,406 145,506
Frank Fiskers
Chair, Remuneration Committee
24 April 2023
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
115
Certain information required for
disclosure in this report is
provided in other appropriate
sections of the Annual Report
and Accounts. These include the
corporate governance and
remuneration reports and the
Group financial statements and
notes to those financial
statements, and accordingly
these are incorporated into the
report by reference.
The directors present their Report
andAccounts for the year ended
2 March 2023.
Results and dividends
Group adjusted profit
beforetax £413m
Group profit before tax £375m
Interim dividend paidon
16December 2022
24.4p
per share
Recommended
final dividend
49.8p
per share
Total dividend
for the year
74.2p
per share
Details on the Group’s dividend policy
can be found on page 33 in the Chief
Financial Officer’s review.
Subject to approval at the AGM, the final
dividend will be payable on 7 July 2023
to the shareholders on the register at
the close of business on 26 May 2023.
The Board
Board of Directors
The directors at the date of this report
are listed on pages 74 to 77. Alison
Brittain stepped down as Chief Executive,
Dominic Paul was appointed as the new
Chief Executive from 17 January 2023.
Dame Karen Jones and Dame Cilla
Snowball were appointed to the Board as
non-executive directors from 9 January
2023 and 24 January 2023.
Details of directors’ training are given
inthe corporate governance report
onpages 81.
Directors’ service contracts
The key terms of the executive directors’
service contracts, together with the
dates of those contracts can be found in
the remuneration report on page 100,
along with the effective dates of the
letters of appointment of the Chairman
and the non-executive directors.
The executive directors’ service
contracts are available for inspection at
our head office.
Powers of directors
The business of the Company is
managed by the directors who may
exercise all the powers of the Company,
subject to the Company’s articles of
association, any relevant legislation and
any directions given by the Company by
passing a special resolution at a general
meeting. In particular, the directors may
exercise all the powers of the Company
to borrow money, issue shares, appoint
and remove directors and recommend
and declare dividends.
Appointment and replacement
ofdirectors
Directors shall be no fewer than two and
no more than 20 in number. Directors may
be appointed by the Company, by ordinary
resolution or by the Board of Directors.
In accordance with the UK Corporate
Governance Code 2018, all directors
willstand for annual re-election at
eachAGM.
The Company may, by special resolution,
remove any director before the
expiration of his/her term of office.
Directors automatically stop being
directors if:
• they give the Company a written
notice of resignation (at the date
suchnotice expires);
• they give the Company a written
notice in which they offer to resign
and the other directors decide to
accept the offer;
• all of the other directors (who must
comprise at least three people) pass
aresolution or sign a written notice
requiring the director to resign;
• they are or have been suffering from
mental or physical ill health and the
directors pass a resolution removing
the director from office;
• they have missed directors’ meetings
(whether or not an alternate director
appointed attends those meetings) for
a continuous period of six months
without permission from the directors
and the directors pass a resolution
removing the director from office;
• a bankruptcy order is made
againstthem or they make any
arrangement or composition with
their creditors generally;
• they are prohibited from being a
director under any applicable
legislation; or
• they cease to be a director under any
applicable legislation or are removed
from office under the Company’s
articles of association.
Directors’ indemnity
A qualifying third-party indemnity
provision was in force for the benefit of
the directors during the financial year.
Inaddition, a qualifying pension scheme
indemnity provision was in force for the
benefit of Whitbread Pension Trustees
during the financial year.
Compensation for loss of office
There are no agreements between the
Company and its directors or employees
providing for compensation for loss of
office or employment that occurs as
aresult of a takeover bid.
Whitbread Annual Report and Accounts 2022/23
116
Directors’ report
Corporate Governance
Directors’ share interests
Details regarding the share interests
ofthe directors in the share capital of
the Company, including with respect
tooptions to acquire ordinary shares,
are set out in the remuneration report
onpage 110.
Shares
Share capital
Details of the issued share capital can
befound in Note 27 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 AGMs.
Voting rights
On a show of hands at a general meeting
of the Company, every holder of ordinary
shares present, in person or by proxy,
and entitled to vote, has one vote
(unless the proxy is appointed by more
than one member in which case the
proxy has one vote for and one vote
against if the proxy has been instructed
by one or more members to vote for the
resolution and by one or more members
to vote against the resolution) and on a
poll every member present in person or
by proxy and entitled to vote has one
vote for every ordinary share held.
Voting rights for any ordinary shares
held in treasury are suspended. None
ofthe ordinary shares carry any special
rights with regard to control of the
Company. Electronic and paper proxy
appointments and voting instructions
must be received by the Company’s
registrars not later than (i) 48 hours
before a meeting or adjourned meeting
(excluding non-working days), or (ii)
24hours before a poll is taken, if the
pollis not taken on the same day as
themeeting or adjourned meeting.
Unless the directors decide otherwise,
ashareholder cannot attend or vote at
any general meeting of the Company
orat any separate general meeting of
the holders of any class of shares in the
Company or upon a poll or exercise any
other right conferred by membership in
relation to general meetings or polls if
he or she has not paid all amounts
relating to those shares which are due
atthe time of the meeting.
Where a shareholder with at least a
0.25% interest in a class of shares has
been served with a disclosure notice in
relation to a particular holding of shares
and has failed to provide the Company
with information concerning those
shares, those shares will no longer
givethat shareholder any right to
voteata shareholders’ meeting.
Restrictions on transfer of shares
There are the following restrictions on
the transfer of shares in the Company:
• Certain restrictions which may from
time to time be imposed by laws and
regulations (for example, insider
trading laws).
• Pursuant to the Company’s share
dealing code, the directors and
seniorexecutives of the Company
require approval to deal in the
Company’s shares.
• Where a person with at least a 0.25%
interest in a class of shares has been
served with a disclosure notice and
has failed to provide the Company
with information concerning interests
in those shares.
• The subscriber ordinary shares may
not be transferred without the prior
written consent of the directors.
• The directors can, without giving any
reason, refuse to register the transfer
of any shares which are not fully paid.
• Transfers cannot be in favour of more
than four joint holders.
• The directors can refuse to register
thetransfer of an uncertificated
sharein the circumstances set out
inthe uncertificated securities rules
(as defined in the Company’s articles
of association).
The Company is not aware of any
agreements between shareholders that
may result in restrictions on the transfer
of shares or on voting rights.
B shares and C shares
Holders of B shares and C shares
areentitled to receive an annual
non-cumulative preferential dividend
calculated at a rate of 75% of six
monthLIBOR on a value of 155p
perBshare and 159p per C share
respectively, but are not entitled to
anyfurther right ofparticipation in
theprofits of the Company. They
arealso entitled to payment of 155p
perBshare and 159p per C share
respectively on a return ofcapital on
winding-up (excluding anyintra-group
reorganisation on a solvent basis).
Except in limited circumstances, the
holders of the B shares and C shares
arenot entitled, in their capacity as
holders of such shares, to receive notice
of any general meeting of the Company
nor to attend, speak or vote at any such
general meeting.
Both B and C shares represent significantly
less than 0.01% of the total share capital.
Purchase of own shares
The Company is authorised to purchase
its own shares in the market. Approval to
renew this authority will be sought from
the shareholders at the 2023 AGM. The
Company did not purchase and of its
own shares during the year. At 2 March
2023, 12.5 million shares were held as
treasury shares (3 March
2022: 12.5 million).
Employee share schemes
Whitbread does not have any employee
share schemes with shares which have
rights with regard to the control of the
Company that are not exercisable
directly by the employees.
Major interests
As at the end of the financial year, theCompany had received formal notification,
under the Disclosure and Transparency Rules, of the following material holdings in
its shares (the percentages shown are the percentages at the time of the disclosure
and have not been re-calculated based on the issued share capital at the year-end):
Number of shares
% of issued share
capital
1
BlackRock, inc 9,105,321 6.76%
MFS Investment Management 9,757,865 4.83%
Longview Partners 9,046,346 4.48%
Aberdeen Asset Management 9,155,869 4.99%
1 The % of issued share capital is taken from the date of the relevant notification and changes to the voting rights
since that date can cause higher numbers of shares to have lower percentages and vice versa.
Since the end of the financial year, the Company has received a number of
disclosures from Bank of America Corporation in accordance with Rule 5 of the
Disclosure and Transparency Rules. The most recent notification, which was received
on 20 April 2023 disclosed that they held 7,275,188 shares, representing 3.60% of
voting rights and a further 8,846,099 in financial instruments representing 4.38% of
voting rights.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
117
Mandatory greenhouse
gasreporting
In order to comply with the requirements
of the Companies (Directors’ Report) and
Limited Liability Partnerships (Energy
and Carbon Report) Regulations 2018, we
have amended our environmental
reporting accordingly.
We have considered the six main
greenhouse gases (GHGs) and report in
CO
2
e for our Scope 1 (direct) and Scope
2 (indirect) CO
2
emissions. We have used
the GHG Protocol Corporate Accounting
and Reporting Standard methodology
tocalculate our emissions as well as
DEFRA and International Energy
Standards GHG Conversion Factors
forCompany Reporting.
Scope 1 includes emissions from the fuels
we use in our hotels, restaurants and
offices such as natural gas and liquid
petroleum gas. It also includes CO
2
e from
business owned vehicles which includes
company cars and food logistics vehicles
as we own the lease arrangements. CO
2
e
from company cars is calculated using
the manufacturers stated performance
multiplied by an uplift stated in the
DEFRA standards methodology paper.
Scope 2 relates to the indirect emissions
associated with the generation of the
electricity consumed in our sites
including district heating. When defining
the scope of our data we do not report
on operations under Joint Venture
agreements, or are fully franchised, where
we do not have operational control such
as Premier Inn (UAE). For reasons of
materiality, small, one man, offices in
Australasia and the Far East have been
excluded. All other sites throughout the
world are included.
Where possible we have reported billed or
AMR (Automated Meter Reading) data.
For those operations which are currently
beyond our reporting capabilities, we have
used an estimation model based on
historic budgeted or billed usage.
In 2022/23 we continued our strong track
record on the energy efficiency of our
estate, with a focus around utilising our
remote BMS control alongside energy
management software to monitor and
target sites to optimise energy reduction.
We continued rolling out voltage
optimisation in the estate to reduce
energy consumption and costs.
We continued to trial new technologies,
for example, we installed smart
controllers to improve the efficiency of
our space heating and cooling, and air
source heat pumps for efficient hot water
generation to reduce carbon. We have
continued the replacement of grills to a
more energy and carbon efficient
alternative, this year installing 236 new
grills across 118 sites, bringing the total of
new grills to 756 since we started this
project in 2018. We also utilised
refurbishment projects to reduce energy
consumption, for example through
upgrading lighting to LED’s.
22/23 is the first full year since 2019 that
we have not been impacted by Covid
lockdowns, therefore have been able to
see more clearly the impact of the
initiatives that we have implemented. We
are pleased to see that the technologies
that we have put in place have had an
impact on our emissions, particularly the
replacement grills implemented in 22/23
which we believe have accounted for
4-5% of our overall carbon reduction
against base year.
In 22/23 we re-calculated our German
floor space to formulate a more accurate
average room size which we use for our
carbon intensity calculations. This more
precise data has meant an increase in
average room size from 24m2 to 38m2.
This large jump has had an impact on our
emission reduction, approximately 1.75%,
therefore we know that this reduction is
not due to reduced usage of energy but
to an increased floor space, the carbon is
spread out across a wider area. Now that
we have a more accurate floor space for
our German market, we will use this
going forward to remain consistent
year-on-year.
Our Scope 1 and 2 emission reduction
and base data is assured by a third party
to ISAE 3000 and to ISAE 3410
standards. The assurance report can be
found on page 122.
Scope 3
This year we have calculated our Scope 3
emissions for the first time since our
baseline year of 2018/19. Our emissions
now stand at 468025 Tonnes CO
2
e. This
is a reduction in intensity of 28.1% since
our baseline year, or an absolute
reduction of 13.8%. We believe this is due
to an improvement in data granularity
leading to a more accurate
representation of our actual scope 3
emissions. We have also seen changes in
operations and behaviour since Covid
leading to consolidation of the supply
chain, reduced business travel and an
increased use of electric vehicles within
the business. Some of the specific
changes within the categories include:
Category 1a – Purchased goods and
services (product)
In this category we saw a reduction of
16.1%, following analysis we have
attributed these changes largely to
modification of methodology. Our
2022/23 assessment contained a more
granular dataset meaning that less
assumptions had to be made throughout
the calculations. Information such as:
packaging weight, packaging type, mode
of transportation and distance travelled
all allowed a more accurate
representation of our Scope 3 emissions
to be calculated. Following global events
such as Brexit and Covid-19 we have also
consolidated our supply chain leading to
a fewer number of suppliers; thus,
reducing our sourcing locations and
associated carbon emissions.
Category 4 – Upstream transportation
and distribution
Despite now only making up
approximately 1% of our 2022/23 Scope 3
emissions, category 4 has seen 87.9%
reduction from our baseline assessment;
going from 37,756 t CO
2
e to 4,534 t CO
2
e.
This substantial decrease can again be
largely attributed to improvements in
data collection and the methodology.
Previously, we used high level industry
wide upstream emission factors for
grouped categories. Since then, our
calculation methods have improved to
be significantly more catered to our own
activities. We now consider the specific
weight, distances, mode of transport
and type of fuel used in transportation.
This more accurate representation is
lower than industry averages as over half
of the total weight of sourced products
come from UK based suppliers, reducing
distances travelled.
Furthermore, the reductions seen in
category 1a due to consolidation of
thesupply chain will have had a direct
knock on to category 4; thus reducing
the total further.
Category 6 & 7 – Business Travel and
Employee Commuting
Category 6 and 7 have both seen a
reduction in Scope 3 emissions from
our baseline assessment to 2022/23.
Following analysis, we have seen an
overall reduction on the number of staff
commuting daily and traveling for
business since Covid-19. As these
figures have not returned to pre-covid
levels we expected to see this
reduction. However, this reduction has
been exacerbated by the rollout of
electric vehicles within our company
carfleet which has been positive.
Whitbread Annual Report and Accounts 2022/23
118
Directors’ report
Corporate Governance
2022/23 2021/22
Source of emissions Scope UK
Rest of
theworld Total UK
Rest of
theworld Total
Total %
change
Gas (T CO
2
e) Scope 1 46,364 1,196 47,560 46,770 2,155 48,925 -2.8%
LPG (T CO
2
e) Scope 1 2,590 0 2,590 2,221 0 2,221 16.6%
F-gas (T CO
2
e) Scope 1 6,222 0 6,222 7,098 0 7,098 -12.3%
Business travel (T CO
2
e) Scope 1 6,875 128 7,003 5,338 133 5,471 28.0%
Electricity, district heating and
EV Charging (locationbased) (T
CO
2
e) Scope 2 66,152 9,415 75,567 67,143 6,525 73,669 2.6%
Electricity, district heating and
EV Charging
(marketbased) (T CO
2
e) Scope 2 4,604 3,433 8,037 2,777 3,238 6,014 33.6%
Gross emissions (locationbased)
128,203 10,739 138,942 128,570 8,814 137,384 1.1%
Gross emissions (marketbased)
66,654 4,757 71,412 64,203 5,526 69,730 2.4%
Floor area (m
2
) 2,650,020 301,043 2,951,063 2,616,379 124,362 2,740,741 7.7%
Tonnes carbon per m
2
floor area
(locationbased) _ _ 0.0471 _ _ 0.0501 -6.1%
Tonnes carbon per m
2
floor area
(marketbased) _ _ 0.0242 _ _ 0.0254 -4.9%
Gas (kWh)
253,993,123 6,549,394 260,542,517 255,349,480 11,766,080 267,115,560 -2.5%
LPG (kWh)
11,243,545 0 11,243,545 9,645,034 0 9,645,034 16.6%
Business travel (kWh)
27,774,973 614,025 28,388,999 21,732,565 461,275 22,193,840 27.9%
Electricity, district heating
andEV charging (kWh)
342,307,377 35,040,568 377,347,945 316,220,832 28,460,914 344,681,746 9.5%
Self-generated electricity
viasolar PV (kWh)
4,416,103
_
4,416,103 4,365,016 4,365,016
1.2%
Total (kWh)
639,735,122 42,203,987 681,939,109 607,312,926 40,688,270 648,001,196 5.2%
Additional Disclosures
Share capital
The table below sets out the location of information required to be disclosed in the directors’ report (in accordance withListing Rule
9.8.4R, and otherwise) which can be found in other sections ofthis Annual Report and Accounts andis incorporated by reference:
Item Section
An indication of likely future developments in the business Strategic report, pages 1 to 67
Financial risk management objectives and policies Financial statements, Note 24 pages 173 to 175
Research and development N/A
Existence of branches N/A
Post balance sheet events Financial statements, Note 34, page 190
Stakeholder and employee engagement Stakeholder engagement, pages 55 to 58
Conflicts of interest Corporate governance report, page 82
Statement of capitalised interest Financial statements, Note 8, page 155
Long-term incentive schemes Remuneration report, pages 92 to 115
Details on Whitbread’s compliance with Disclosure Guidance and Transparency Rules 7.2 can be found on this page.
Additional information
Stakeholder engagement
Information on how the directors engage
with Whitbread’s different stakeholders,
including shareholders, employees and
customers, and on howdirectors have
regard to stakeholders’ interests and the
need tofoster stakeholder relationships
whenmaking decisions can be found
inthe stakeholder engagement section
on pages 55 to 58.
Employment policies
Whitbread has a range of employment
policies covering such issues as
diversity, employee wellbeing and
equalopportunities.
Environmental policies
Whitbread businesses depend upon
theenvironment to operate hotels
andrestaurants through the energy
weuse and the services and products
we provide to our customers. Our main
environmental impacts are from the use
of natural resources, water consumption
and generation of residual waste and
from GHG emissions associated with
energy and fuel use.
Whitbread’s strategic drive is provided
by the corporate responsibility Force for
Good programme which includes energy,
water and waste reduction activities. We
are committed to minimising our impact
on the environment, preventing pollution
and promoting good environmental
practices. Further details can be found
on pages 44 to 51.
Employee involvement
The importance of good relations with
our teams is fundamental to our culture
and the success of our business. Across
the UK and Germany, across our sites
and Support Centres, we regularly ask all
our employees for their views, through
regular pulse surveys. Every employee
has an opportunity to participate in
these surveys, and action plans are
created by site/business area.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
119
Our Employee Forum, which we call Our
Voice, is made up of formally elected
representatives from across our hotels,
restaurants and Support Centres. Our
Voice is designed to connect our senior
leaders with our front-line teams for
two-way conversations about the
business, ensuring employee views are
properly represented. More detail can
befound on pages 39, 47, 55 and 71.
Our employees are actively encouraged
to take part in our Sharesave scheme,
which is available to all employees and
offers an option price discounted by 20%.
Regular internal communications are
made to all employees to ensure that
they are kept well informed about the
performance of Whitbread, and of
financial and economic factors that
mayaffect the Company’s performance.
Amendment of the Company’s
articlesof association
Any amendments to the articles of
association of the Company may be
made in accordance with the provisions
of the Companies Act 2006 by way of
special resolution.
Contractual arrangements
The Group has contractual arrangements
with numerous third parties in support
of its business activities, none of which
are considered individually to be
essential to its business and, accordingly,
it has not been considered necessary for
an understanding of the development,
performance or position of the Group’s
business to disclose information about
any of those third parties.
Post balance sheet events
Information on post balance sheet events
is provided in Note 34 to the accounts.
Political donations
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.
Auditor
Deloitte LLP has expressed its
willingness to continue in office
asauditor of the Company and a
resolution proposing its reappointment
will be put to shareholders at the 2023
AGM. After proper consideration, the
Audit Committee is satisfied that
Deloitte LLP continues to be objective
and independent of the Company. In
coming to this conclusion, the Audit
Committee gave full consideration to
any non-audit work carried out by
Deloitte LLP, and has concluded that
certain services will not be carried out
by Deloitte LLP, as outlined in the
Committee’s terms of reference.
Disclosure of information to auditor
The directors have taken all reasonable
steps to make themselves aware of
relevant audit information and to ensure
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
The Group’s business activities, together
with the factors likely to affect its future
development, performance and position
are set out in the strategic report on
pages 1 to 67. The financial position of
the Company, its cash flows, net debt
and borrowing facilities and the maturity
of those facilities are set out in the Chief
Financial Officer’s review on pages 32 to
35.
In addition, there are further details in
the financial statements on the Group’s
financial risk management, objectives
and policies (Note 24) and on financial
instruments (Note 25).
The directors have outlined the
assessment approach for going concern
in the accounting policy disclosure in
Note 2 of the consolidated financial
statements. Following that review, the
directors have concluded that the going
concern basis remains appropriate.
The viability statement can be found on
page 67.
Annual general meeting
The AGM will be held at 2.00pm on
22 June 2023 at Whitbread Court,
Houghton Hall Business Park, Porz
Avenue, Dunstable LU5 5XE. The Notice
of Meeting is enclosed with this report
forshareholders receiving hard copy
documents and is available at
www.whitbread.co.uk for those who
haveelected to receive
documentselectronically.
Approved by the Board on 24 April 2023
and signed.
Chris Vaughan
General Counsel and Company Secretary
Registered Office:
Whitbread Court
Houghton Hall Business Park
Porz Avenue
Dunstable
Bedfordshire LU5 5XE
Registered company number: 04120344
Whitbread Annual Report and Accounts 2022/23
120
Directors’ report continued
The directors are responsible for
preparing the Annual Report and
Accounts in accordance with applicable
law andregulations.
Company law requires the directors to
prepare financial statements for each
financial year. Under that law the
directors are required to prepare the
Group financial statements in
accordance with International
Accounting Standards in conformity
with the requirements of the
CompaniesAct 2006.
The directors have also chosen to
prepare the parent company financial
statements in accordance with Financial
Reporting Standard 101 Reduced
Disclosure Framework. Under company
law the directors must not approve the
financial statements unless they are
satisfied that they give a true and fair
view of the state of affairs of the
Company and of the profit or loss ofthe
Company for that period.
In preparing the parent company
financial statements, thedirectors are
required to select suitable accounting
policies and then apply
themconsistently;
• make judgements and accounting
estimates that are reasonable
andprudent;
• state whether applicable UK
Accounting Standards has been
followed, subject to any material
departures disclosed and explained in
the financial statements; and
• prepare the financial statements on
the going concern basis unless it is
inappropriate to presume that the
company will continue in business.
In preparing the Group financial
statements, International Accounting
Standard 1 requires that directors:
• properly select and apply
accountingpolicies;
• present information, including
accounting policies, inamanner that
provides relevant, reliable, comparable
andunderstandable information;
• provide additional disclosures when
compliance with the specific
requirements in IFRS Standards are
insufficient toenable users to
understand the impact of particular
transactions, other events and
conditions on the entity’s financial
position and financial performance;
and
• make an assessment of the Group’s
ability to continue asagoing concern.
The directors are responsible for keeping
adequate accounting records that are
sufficient to show and explain the
company’s transactions and disclose with
reasonable accuracy at any time the
financial position of the company and
enable them to ensure that the financial
statements comply with the Companies
Act 2006. They are also responsible for
safeguarding the assets of the company
and hence for taking reasonable steps for
the prevention and detection of fraud
and other irregularities.
The directors are responsible for the
maintenance and integrity of the
corporate and financial information
included on the Company’s website.
Legislation in the United Kingdom
governing the preparation and
dissemination of financial
statementsmay differ from legislation
inother jurisdictions.
Responsibility statement
We confirm that to the best of
ourknowledge:
• the financial statements, prepared in
accordance with the relevant financial
reporting framework, give a true and
fair view of the assets, liabilities,
financial position and profit or loss
ofthe company and the undertakings
included in the consolidation taken
asa whole;
• the strategic report includes a fair
review of the development and
performance of the business and the
position of the company and the
undertakings included in the
consolidation taken as a whole,
together with a description of the
principal risks and uncertainties that
they face; and
• The Annual Report and Accounts,
taken as a whole, are fair, balanced
and understandable and provide the
information necessary for shareholders
to assess the company’s position
andperformance, business model
andstrategy.
This responsibility statement was
approved by the board of directors
on24 April 2023 and is signed on
itsbehalfby:
By order of the Board
Dominic Paul
Chief Executive
Hemant Patel
Chief Financial Officer
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
121
Directors’ responsibility statement
This report is made solely for the use of
The Board of Directors of Whitbread
Group PLC (“Whitbread”) who engaged
RSM UK Risk Assurance Services LLP to
obtain limited assurance on the reported
performance results of selected Force for
Good performance measures (together
the “Subject Matter Information”) as
defined below and set out in Whitbread’s
Basis of Preparation for the 2023
reporting year.
Our assurance conclusion does not
extend to information in respect of earlier
periods or to any other information
included in, or linked from, the report.
1.1 Our Limited Assurance Conclusion
Based on the procedures we have
performed, as described under ‘Work
undertaken’ and the evidence we have
obtained, nothing has come to our
attention that causes us to believe that
the Subject Matter Information has not
been prepared, in all material respects, in
accordance with the Reporting Criteria
set out in Whitbread’s Basis of
Preparation 2023 and referenced in the
‘Understanding reporting and
measurement methodologies’ below.
This conclusion is to be read in the
context of what we say in the remainder
of our report.
1.2 Approach
The scope of our work was limited to
assurance over the Subject Matter
Information as set out in the table in
Appendix A. The Reporting Criteria is
set out in Whitbread’s Basis of
Preparation 2023.
1.3 Professional standards applied and
level of assurance
We performed a limited assurance
engagement in accordance with
International Standard on Assurance
Engagements 3000 (Revised) ‘Assurance
Engagements other than Audits and
Reviews of Historical Financial
Information’, and, in respect of the
greenhouse gas emissions, in accordance
with International Standard on Assurance
Engagements 3410 ‘Assurance
engagements on greenhouse gas
statements’, issued by the International
Auditing and Assurance Standards Board.
A ‘limited assurance’ engagement is
substantially less in scope than a
reasonable assurance engagement in
relation to both the risk assessment
procedures, including an understanding
of internal control, and the procedures
performed in response to the assessed
risks. Consequently, the level of assurance
obtained in a limited assurance
engagement is substantially lower than
the assurance that would have been
obtained had a reasonable assurance
engagement been performed.
1.4 Our independence and quality control
We applied the Institute of Chartered
Accountants in England and Wales
(ICAEW) Code of Ethics, which includes
independence and other requirements
founded on fundamental principles of
integrity, objectivity, professional
competence and due care, confidentiality
and professional behaviour.
We apply International Standard on
Quality Control (UK) and accordingly
maintain a comprehensive system of
quality control including documented
policies and procedures regarding
compliance with ethical requirements,
professional standards and applicable
legal and regulatory requirements.
1.5 Understanding reporting and
measurement methodologies
The Subject Matter Information needs to
be read and understood together with
the Reporting Criteria, which Whitbread
is solely responsible for selecting and
applying. The Subject Matter Information
is set out in Appendix A and the Basis of
Preparation 2023.
The absence of a significant body of
established practice on which to draw to
evaluate and measure non-financial
information allows for different, but
acceptable, evaluation and measurement
techniques that can affect comparability
between entities and over time. The Basis
of Preparation used for the reporting of
the Subject Matter Information are for the
2023 reporting year.
1.6 Work undertaken
We are required to plan and perform our
work in order to consider the risk of
material misstatement of the Subject
Matter Information. In carrying out our
limited assurance engagement, we:
• considered the suitability in the
circumstances of Whitbread‘s use of
the Reporting Criteria as the basis for
preparing the Subject Matter
Information;
• through enquiries of Whitbread’s
management, including those with
responsibility for Force for Good
governance, management and
reporting, obtained an understanding
of Whitbread’s control environment,
processes and systems relevant to the
preparation of the Subject Matter
Information;
• evaluated whether Whitbread’s
methods for developing estimates
areappropriate and had been
consistently applied;
• obtained Whitbread’s internal working
papers to prepare the Subject Matter
Information and checked whether
thiswas consistent with the Basis
ofPreparation;
• performed limited substantive testing
on a selective basis of the Subject
Matter Information to check that the
underlying information had been
appropriately measured, recorded,
collated, and reported, including:
• undertook site visits at a selection
of Whitbread’s Hotels, Offices and a
third party operator site;
• reviewing the data collection and
consolidation processes used to
compile the Subject Matter
Information, including the data
scope and reporting boundaries;
• agreeing a selection of Subject
Matter Information to corresponding
source documents, including third
party data;
• reperforming calculation of Subject
Matter Information; and
• vouching emission factors used to
independent external sources; and
• considered the disclosure and
presentation of the Subject
MatterInformation.
1.7 Whitbread Group PLC’s
responsibilities
The Directors of Whitbread are
responsible for:
• determining appropriate reporting
topics and selecting or establishing
suitable criteria for measuring or
evaluating the underlying subject
matter;
• ensuring that those criteria are relevant
and appropriate for Whitbread and the
intended users of the report;
• designing, implementing and
maintaining internal controls over
information relevant to the
preparation of the Subject Matter
Information is free from material
misstatement, whether due to fraud or
error; and
• producing the report, including
underlying information and a
statement of Director’s responsibilities,
which provides accurate, balanced
reflection of Whitbread’s performance
in this area and discloses, with
supporting rationale, matters relevant
to the intended users of the report.
1.8 Our responsibilities
We are responsible for:
• planning and performing the
engagement to obtain limited
assurance about whether the Subject
Matter Information is free from
material misstatement, whether due to
fraud or error;
• forming an independent conclusion,
based on the procedures we have
performed and the evidence we have
obtained; and
Whitbread Annual Report and Accounts 2022/23
122
Independent Limited Assurance Report
• reporting our conclusion to the
Directors of Whitbread.
1.9 Use and distribution of our report
This report, including our conclusion, has
been prepared solely for the Board of
Directors of Whitbread in accordance
with the agreement between us, to assist
the Directors in reporting sustainability
performance and activities. To the fullest
extent permitted by law, we do not
accept or assume responsibility to
anyone other than the Board of
Directors and Whitbread for our work or
this report except where terms are
expressly agreed between us in writing.
Signed
RSM UK Risk Assurance Services LLP
25 Farringdon Street, London,
EC4A4AB
24 April 2023
Appendix A – The reported Subject Matter Information
Pillar Force for Good performance measure
UK/
Germany
2023 reported performance result
(SubjectMatter Information)
Opportunity In our leadership population*:
X% of female representation
X% of ethnic minority representation
* Leadership community is defined by all roles at grades C20+
that are UK based
UK 40.4% female representation, 6.7% ethnic
minority representation (Asian, black and
mixedethnicity)
Opportunity The number of employees completing
apprenticeship scheme in the year
UK 237 employees completing apprenticeship
scheme in the year
Opportunity X% of promotions within Operations
Management teams were internal
UK 64% of promotions within our salaried Operations
Management teams were internal
Opportunity In our workforce population:
X% of female representation
X% of ethnic minority representation
UK Female 64.9%
Male 35.1%
Asian | Asian British 6.6%
Black | African 4.1%
Mixed Ethnic 4.6%
White 75.3%
No Record 8.1%
Opportunity X% of positive response to the question from
our internal survey – ‘Would you recommend
Whitbread as a place to work’
UK UK Operations: 78.7%
UK Support Centre: 79.5%
Opportunity The number of Mental Health First Aiders UK 121 active Mental Health First Aiders
Community The amount of money raised for the charity
partner Great Ormond Street in the financial year
UK £1,932,643 raised for charity partner GOSH in
financial year
Community X% salt reduction based on 2017 baseline UK 4.8% salt reduction
Community X% sugar reduction based on 2015 baseline UK 24.1% sugar reduction
Community X% calorie reduction based on 2017 baseline UK 3.4% calorie increase
Responsibility X% of whole shell eggs sourced from cage free
sources
UK 100% of whole shell eggs sourced from cage
freesources
Responsibility X% of eggs used as ingredients sourced from
cage free hens*
* Relates to Whitbread own recipes only
UK 70% of eggs used as ingredients sourced from
cage free hens*
Responsibility X% of our raw beef range in the UK is produced
to a recognised farm assurance scheme in its
country of origin
UK 100% of our raw beef range in the UK is produced
to a recognised farm assurance scheme in its
country of origin
Responsibility X% of suppliers’ risk assessed for human rights
risks*
* Assessments are based on both the supplier’s country of
operation and associated sector risk. 100% of suppliers receive
a country risk assessment but only suppliers over £10,000 in
annual spend receive both assessments
UK 100% of suppliers’ risk assessed for human rights
risks*
Responsibility The number of meals donated to charity UK 42,110 meals donated to charity in FY22/23
Responsibility X% food waste reduction from our FY18/19 base
year
UK 11.88% food waste reduction from our FY18/19
baseyear
Responsibility Scope 1 and 2 greenhouse gas (GHG) footprint UK and
Germany
Group GHG location based: 138,942
Group GHG market based: 71,412
(Tonnes of CO
2
e)
Responsibility Scope 1 and 2 GHG reductions based on
intensity metrics based on FY16/17 baseline
yeardata
UK and
Germany
52.1% reduction in Scope 1 and 2 emissions
intensity against FY16/17 baseline year
Responsibility X% of operational waste diverted from landfill UK 99.96% of operational waste diverted from landfill
Responsibility In 2022*, we sourced X% of our cotton** as
Better Cotton
* Calendar year
** Relates to cotton in rented linen, guest guys the bedding and
duvets and pillow purchases annually
UK In 2022, we sourced 52.36% of our cotton* as
Better Cotton
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
123
Independent Limited Assurance Report continued
1. Opinion
In our opinion:
• the financial statements of
Whitbread PLC (the ‘parent
company’) and its subsidiaries
(the‘Group’) give a true and fair
viewof the state of the Group’s and
of the parent company’s affairs as
at2 March 2023 and of the Group’s
profit for the year then ended;
• the Group financial statements
havebeen properly prepared
inaccordance with United
Kingdomadopted international
accounting standards;
• the parent company financial
statements have been properly
prepared in accordance with
UnitedKingdom Generally
AcceptedAccounting Practice,
including Financial Reporting
Standard 101 “Reduced Disclosure
Framework”; and
• the financial statements have been
prepared in accordance with the
requirements of the Companies
Act2006.
We have audited the financial
statements which comprise:
• the Consolidated income statement;
• the Consolidated statement
ofcomprehensive income;
• the Consolidated and parent
company statements of changes
inequity;
• the Consolidated and parent
company balance sheets;
• the Consolidated cash flow
statement;
• the statement of accounting
policies;and
• the related notes to the consolidated
financial statements 1 to 35.
• The related notes to the parent
company financial statements 1 to 9.
The financial reporting framework that
has been applied in the preparation of
the Group financial statements is
applicable law and United Kingdom
adopted international accounting
standards. The financial reporting
framework that has been applied in the
preparation of the parent company
financial statements is applicable
lawand United Kingdom Accounting
Standards, including FRS 101
“ReducedDisclosure Framework”
(UnitedKingdom Generally Accepted
Accounting Practice).
2. Basis for opinion
We conducted our audit in accordance
with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law.
Ourresponsibilities under those
standards arefurther described in the
auditor’s responsibilities for the audit
ofthe financial statements section
ofourreport.
We are independent of the Group and
the parent company in accordance with
the ethical requirements that are relevant
to our audit of the financial statements in
the UK, including the Financial Reporting
Council’s (the ‘FRC’s’) Ethical Standard as
applied to listed public interest entities,
and we have fulfilled our other ethical
responsibilities in accordance with these
requirements. The non-audit services
provided to the Group and parent
company for the year are disclosed
innote 5 to the financial statements.
Weconfirm that we have not provided
any non-audit services prohibited by
theFRC’s Ethical Standard to the
Groupor the parent company.
We believe that the audit evidence
wehave obtained is sufficient and
appropriate to provide a basis for
ouropinion.
3. Summary of our audit approach
KEY AUDIT MATTERS The key audit matter that we identified in the current year was
• Impairment and impairment reversals of property, plant and equipment and
right-of-use assets
Within this report, the key audit matter is identified as follows:
 Similar level of risk
MATERIALITY We have determined materiality for the Group financial statements to be
£20.0 million (2022: £16.0 million), which represents 4.8% % of adjusted profit before
tax. This represents 5.3% of statutory profit before tax and 0.49% of net assets.
SCOPING We focused our Group audit scoping primarily on all significant trading entities at
Premier Inn in the UK and Group head office, with specified audit procedures
performed on certain financial statement line items for the Germany business.
Theselocations account for 95.1% of the Group’s revenues and 99.8% of the
Group’stotal assets.
SIGNIFICANT CHANGES
INOURAPPROACH
In terms of materiality, we have used adjusted profit before tax as our benchmark
inthe current year. In the prior year, the materiality benchmark was net assets.
Thereason for this change was the impact of COVID-19 which continued to affect
the Group’s financial performance in the prior year.
Our audit report no longer includes the following as a key audit matter:
• Recognition of UK and Germany government grants – In the prior period, we
identified a key audit matter relating to the presentation and accuracy of amounts
received from government support in the UK and Germany. No further claims have
been made in relation to government grants during the year and therefore we do
not consider this to be a key audit matter in the current year.
Whitbread Annual Report and Accounts 2022/23
124
Independent Auditor’s report
Report on the audit of the financial statements
4. Conclusions relating
togoing concern
In auditing the financial statements,
wehave concluded that the directors’
use ofthe going concern basis of
accounting in the preparation of the
financial statements is appropriate.
Our evaluation of the directors’
assessment of the Group’s and
parentcompany’s ability to continue
toadoptthe going concern basis
ofaccounting included:
• Obtained an understanding of the
processes and controls focusing on
the Group’s forecasting of financial
performance and cash flow;
• Obtained confirmation of the
financing facilities including nature
offacilities, repayment terms
andcovenants;
• Assessed the reasonableness of the
assumptions used in the Group’s
business plan;
• Tested the clerical accuracy and
assessed the models used to
preparethe business plans; this work
included obtaining an understanding
of the relevant controls over
management’s model;
• Considered the amount of headroom
in the business plans with regards
toliquidity and covenants;
• Assessed the sensitivity of the
headroom in the Group’s business
plans; and
• Assessed the appropriateness of the
Group’s disclosure concerning the
going concern basis.
Based on the work we have performed,
we have not identified any material
uncertainties relating to events or
conditions that, individually or
collectively, may cast significant doubt
on the Group’s and parent company’s
ability to continue as a going concern
for a period of at least twelve months
from when the financial statements are
authorised for issue.
In relation to the reporting on how the
Group has applied the UK Corporate
Governance Code, we have nothing
material to add or draw attention to
inrelation to the directors’ statement
inthe financial statements about
whether the directors considered
itappropriate to adopt the going
concern basis ofaccounting.
Our responsibilities and the
responsibilities of the directors with
respect to going concern are described
in the relevant sections of this report.
5. Key audit matters
Key audit matters are those matters
that, in our professional judgement, were
of most significance in our audit of the
financial statements of the current
period and include the most significant
assessed risks of material misstatement
(whether or not due to fraud) that we
identified. These matters included those
which had the greatest effect on: the
overall audit strategy, the allocation of
resources in the audit; and directing the
efforts of the engagement team.
These matters were addressed in the
context of our audit of the financial
statements as a whole, and in forming
our opinion thereon, and we do
notprovide a separate opinion
onthesematters.
5.1. Impairment and impairment reversals of property, plant and equipment and right-of-use assets 
KEY AUDIT MATTER
DESCRIPTION
As described in Note 15 (Impairment), Note 14 (Property, plant and equipment) and Note 22
(Lease Agreements) of the financial statements, the Group held £4,554.2 million
(2022: £4,227.1 million) of Property, plant and equipment and £3,504.6 million
(2022: £3,267.6 million) of Right-of-use assets at 3 March 2023.
Under IAS 36 Impairment of Assets, the Group is required to complete an impairment review of
its site portfolio where there are indicators of impairment. In the prior year, the Group recognised
a net impairment reversal of £36.2 million as a result of the recovery in financial performance
ahead of previous forecasts following the COVID-19 pandemic.
In the current year, although accommodation sales have significantly increased compared to the
prior year, uncertainty in the macroeconomic environment has driven higher market interest rates
which has subsequently led to an increase in market-based discount rates for both the UK and
Germany. The discount rates are a key assumption in the valuation of the Group’s portfolio of
sites and the increase has led to impairments in the year. Food and Beverage (“F&B”) sales are
yet to recover to the levels achieved before the COVID-19 pandemic and this has led to continued
judgement and complexity in the cash flow forecasting, particularly for sites which are
standalone restaurants and those specific sites where F&B sales represent a more significant
proportion of total sales.
In the current year, the Group recognised impairment losses in the UK of £54.2 million driven by
the higher discount rate and lower cash flow forecasts for F&B related sites. Impairment reversals
were also recognised in the UK of £54.9 million, on accommodation sites where anticipated cash
flows have increased significantly following the COVID-19 pandemic. In Germany, impairment
losses of £30.8 million have been recognised driven by the higher discount rate and lower
forecast cash flows on specific sites. The net impairment charge for the year of £33.4 million
(£30.1 million from the impairment assessment and £3.3 million from the impairment of assets
held for sale) has been recognised through the consolidated income statement.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
125
KEY AUDIT MATTER
DESCRIPTION CONTINUED
Estimation is required in determining the recoverable amount of the Group’s portfolio of sites.
There is a risk that the carrying value of sites (including the property, plant and equipment and
right-of-use assets) may be higher than the recoverable amount, which would indicate an
impairment is required. There is also a risk that the recoverable value of previously impaired sites
is higher than the carrying value, which would indicate an impairment reversal is required. Where
an impairment review is performed, the recoverable amount is determined based on the higher
of ‘value-in-use’ or ‘fair value less costs of disposal’ (which is determined through the use of
either a discounted cash flow method using a market based discount rate or an industry
valuation methodology).
There are several judgements in assessing the appropriate valuation, which are set out below:
• Determining the cash-generating units (“CGUs”) that show indicators of impairment or
impairment reversal. A CGU is determined to be each individual or a joint trading outlet;
• Assessing the appropriate discount and long-term growth rates;
• Estimating future trading earnings and cash flow projections, including the recovery profile of
F&B sales;
• Assessing the future growth profile of sites which have not yet reached maturity;
• Assessing the appropriateness of the valuation methodology, as well as inputs to these; and
• Estimating a reasonable possible change in assumptions for the purpose of sensitivity analysis.
The Group’s accounting policy on impairment and key sources of estimation uncertainty in
relation to impairment testing are set out in Note 2. In addition, impairment testing – property,
plant and equipment and right-of-use assets is also a significant matter considered by the Audit
Committee, as discussed on page 81.
HOW THE SCOPE OF OUR
AUDIT RESPONDED TO THE
KEY AUDIT MATTER
In responding to the identified key audit matter, we completed the following audit procedures:
• Obtained an understanding of the relevant controls relating to the impairment review process
and determination of cash flow forecasts;
• Evaluated the valuation methodologies adopted by management to identify impairment
indicators, including the consistency of these with the requirements of IAS 36 and IFRS 13
FairValue Measurement;
• Tested the mechanical accuracy of the impairment models, with involvement of our analytics
and modelling specialists;
• Assessed the completeness of CGUs displaying impairment indicators or impairment reversal
indicators by challenging a sample of CGUs for which no indicators had been identified;
• Assessed the appropriateness of the discount rates applied with the involvement
ofourinternal valuation specialists and compared the rates applied with our internal
benchmarking data;
• Assessed the appropriateness of forecast revenue and margin growth rates through
comparison to board approved plans with reference to historical forecasting accuracy
andexternal market data (such as industry forecasts);
• Performed testing on a sample of sites where impairment had been recognised, sites where
impairment indicators were identified, but no impairment recognised and sites which indicated
an impairment reversal was required; we challenged the individual circumstances of these
sitesand whether the rationale for management’s conclusion was appropriate. In order to
perform this assessment, we reviewed the trading history of the site, understood its current
performance with reference to market data and evaluated the appropriateness of Group-wide
forecasts being applied;
• Assessed the sensitivity analysis performed by management; and
• Assessed the completeness and accuracy of disclosures within the financial statements
inaccordance with IFRS, in particular Note 15.
KEY OBSERVATIONS Based on the audit procedures performed, we are satisfied that the impairment and impairment
reversals recognised in the year are appropriate. We consider the disclosures, including the
sensitivities in Note 15, to be appropriate.
Whitbread Annual Report and Accounts 2022/23
126
Report on the audit of the financial statements
6. Our application of materiality
6.1. Materiality
We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic
decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality both in planning the scope
ofour audit work and in evaluating the results of our work.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Group financial statements Parent company financial statements
MATERIALITY £20.0 million (2022: £16.0 million) £16.6 million (2022: £13.6 million)
BASIS FOR DETERMINING MATERIALITY We have determined materiality to be
£20.0 million, which represents 4.8%
ofadjusted profit before tax. This
represents 5.3% of statutory profit
beforetax and 0.49% of net assets.
Determined materiality in the prior
yearrepresented 0.38% of net assets.
Materiality was determined on the basis
ofthe parent company’s net assets.
Thiswas then capped at 85% of group
materiality. This is consistent with the
prioryear.
RATIONALE FOR THE
BENCHMARKAPPLIED
In the previous year, we applied net
assetsas the benchmark for determining
materiality given the continued
impactofCOVID-19 on the Group’s
financial performance.
In determining the benchmark for the
current year, we have considered the
focus of the users of the financial
statements onthe Group’s trading
performance and determined that
adjusted profit before taxis the most
appropriate benchmark. The use of
adjusted profit before tax isconsistent
with our approach prior toCOVID-19.
The entity is non-trading and contains an
investment in all of the Group’s trading
components and as a result, in line with
prior year, we have determined materiality
using net assets as our benchmark for the
current year.
Group materiality
Adjusted profit before tax
Adjusted profit
before tax £413m
Group materiality £20m
Component
materiality range
£8m to £19m
Audit Committee
reporting threshold £1.0m
6.2. Performance materiality
We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected and
undetected misstatements exceed the materiality for the financial statements as a whole.
Group financial statements Parent company financial statements
PERFORMANCE MATERIALITY 70% (2022: 70%) of Group materiality 70% (2022: 70%) of parent
companymateriality
BASIS AND RATIONALE FOR
DETERMINING PERFORMANCE
MATERIALITY
In determining performance materiality, we considered the following factors:
• Our risk assessment, including our assessment of the Group’s overall control
environment; and
• Our cumulative knowledge of the Group, including the nature, quantum and
volumeof corrected and uncorrected misstatements in prior periods.
6.3. Error reporting threshold
We agreed with the Audit Committee that we would report to the Committee all audit differences in excess of £1.0 million
(2022: £0.8 million), as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds. We
also report to the Audit Committee on disclosure matters that we identified when assessing the overall presentation of the
financial statements.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
127
7. An overview of the scope
ofour audit
7.1. Identification and scoping
ofcomponents
Our Group audit was scoped by
obtaining an understanding of the Group
and its environment, including Group-
wide controls and assessing the risks
ofmaterial misstatement at the
Grouplevel.
Components were selected to provide
an appropriate basis for undertaking
audit work to address the risks of
material misstatement.
Based on our assessment, we have
focused our audit on the UK business,
which was subject to full audit
procedures, and performed specified
audit procedures on certain financial
statement line items in the German
business. This work was performed by
the Group audit team, with the
assistance of component auditors in
Germany. In terms of coverage, we have
performed full audit scope procedures
covering 95.1% of the Group’s revenues
and 99.8% of total assets within the
Group. For the UK business, component
materiality was assessed at £19.0m and
for Germany this was assessed at £8.0m.
At the Group level, we also tested the
consolidation process and carried out
analytical procedures to confirm our
conclusion that there were no significant
risks of material misstatement of the
aggregated financial information of the
remaining components not subject to
audit or specified audit procedures. We
have also performed analytical review
procedures on other wholly owned
andjoint venture businesses.
Full audit scope
95.1%
Review group level
4.9%
Revenue
Full audit scope
99.8%
Review group level
0.2%
Total assets
7.3. Our consideration of climate-
related risks
As described on pages 52 and 66,
theGroup has assessed the risks and
opportunities associated with various
future climate-related scenarios. The
Group’s full Task Force on Climate-
Related disclosures report outlines the
process they have taken to identify the
principal climate-related issues which
have affected and will potentially affect
the business. We have considered the
Group’s assessment of the impact of
these risks and the opportunities on the
financial statements and their conclusion
that there is no material impact on the
financial performance and position of
the Group (as described in Note 2 to the
financial statements).
As part of our risk assessment
procedures, we have performed
thefollowing:
• Obtained an understanding
ofmanagement’s process and
controlsin considering the impact
ofclimate risks;
• Performed enquiries of management
and those charged with governance
tounderstand the impact of climate-
related risks;
• Assessed whether the risks identified
by the entity are complete and
consistent with our understanding
ofthe entity;
• Performed a review of the climate
change risk assessment and related
documentation prepared by
management and read the Task
Forceon Climate-related financial
disclosures report on page 52 to
consider whether they are materially
consistent with the financial
statements and our knowledge
obtained in the audit; and
• Evaluated whether appropriate
disclosures have been made in
relationto climate-related risks
inthefinancial statements.
7.2. Our consideration of the
controlenvironment
The Whitbread IT landscape contains
anumber of IT systems, applications
andtools used to support business
processes and for reporting. In line with
our scoping of components (refer to
section 7.1) our work in relation to IT
controls focuses on the UK component.
We perform an independent risk
assessment of the systems, applications
and tools to determine those which are
of greatest relevance to the Group’s
financial reporting, including those that
contain system configured automated
controls that host financially relevant
data and associated reports. In
addition,we tested the relevant
manualbusinesscontrols alongside
theautomated controls.
With involvement of our IT specialists
we performed testing of General IT
Controls (“GITCs”) of these systems,
typically covering controls over user
access management, change
management and interfaces with
othersystems relating to in scope
ITsystems (including Oracle Fusion)
aswell as controls over key reports
generated from the IT systems and
theirsupporting infrastructure
(databaseand operating system).
In order to evaluate IT controls, we
performed walkthrough procedures of
relevant controls in key business cycles,
including revenue, property, plant and
equipment, intangible assets and
expenditure (processed through Oracle
Fusion) to understand whether the
purpose of the control was effectively
designed to address the IT related risk.
We then performed testing of the
relevant controls across the audit period,
to determine whether the control had
been consistently applied as designed.
Our procedures enabled us to place
reliance on IT controls, as planned, in
theaudit approach across a number of
business cycles, where audit quality and
effectiveness are enhanced by doing so.
Based on the testing performed, we
adopted a controls reliance approach
over the processes supporting revenue,
expenditure (processed through Oracle
Fusion), additions to property plant
andequipment and intangible assets.
Whitbread Annual Report and Accounts 2022/23
128
Report on the audit of the financial statements continued
7.4. Working with other auditors
The Group audit team is responsible for
the scope and direction of the audit
process and provides direct oversight,
review and coordination of our
component audit teams. During the
current year we engaged component
auditors from the Deloitte member firm
in Germany to perform specified audit
procedures on certain financial
statement line items on the German
entities. This approach allowed us to
engage local auditors who have
appropriate knowledge of local
regulations to perform this audit work.
We issued detailed instructions to the
component auditor and directed and
supervised their work.
We interacted regularly with the
component Deloitte team during each
stage of the audit and reviewed key
working papers. We maintained
continuous and open dialogue with our
component teams in addition to holding
formal meetings so that we were fully
aware of their progress and results of
their procedures.
8. Other information
The other information comprises the
information included in the annual
report, strategic reports on pages 2 to
67 and the governance reports on pages
68 to 131, other than the financial
statements and our auditor’s report
thereon. The directors are responsible
for the other information contained
within the annual report.
Our opinion on the financial statements
does not cover the other information
and, except to the extent otherwise
explicitly stated in our report, we do not
express any form of assurance
conclusion thereon.
Our responsibility is to read the other
information and, in doing so, consider
whether the other information is
materially inconsistent with the financial
statements or our knowledge obtained
in the course of the audit, or otherwise
appears to be materially misstated.
If we identify such material
inconsistencies or apparent material
misstatements, we are required to
determine whether this gives rise to a
material misstatement in the financial
statements themselves. If, based on the
work we have performed, we conclude
that there is a material misstatement of
this other information, we are required
to report that fact.
We have nothing to report in respect
of these matters.
9. Responsibilities of directors
As explained more fully in the directors’
responsibilities statement, the directors
are responsible for the preparation of
the financial statements and for being
satisfied that they give a true and fair
view, and for such internal control as
thedirectors determine is necessary
toenable the preparation of financial
statements that are free from material
misstatement, whether due to fraud
orerror.
In preparing the financial statements, the
directors are responsible for assessing
the Group’s and the parent company’s
ability to continue as a going concern,
disclosing as applicable, matters related
to going concern and using the going
concern basis of accounting unless the
directors either intend to liquidate the
Group or the parent company or to
cease operations, or have no realistic
alternative but to do so.
10. Auditor’s responsibilities
forthe audit of the
financialstatements
Our objectives are to obtain reasonable
assurance about whether the financial
statements as a whole are free from
material misstatement, whether due to
fraud or error, and to issue an auditor’s
report that includes our opinion.
Reasonable assurance is a high level of
assurance, but is not a guarantee that an
audit conducted in accordance with ISAs
(UK) will always detect a material
misstatement when it exists.
Misstatements can arise from fraud or
error and are considered material if,
individually or in the aggregate, they
could reasonably be expected to
influence the economic decisions of
users taken on the basis of these
financial statements.
A further description of our
responsibilities for the audit of the
financial statements is located on the
FRC’s website at: www.frc.org.uk/
auditorsresponsibilities. This description
forms part of our auditor’s report.
11. Extent to which the audit
was considered capable
ofdetecting irregularities,
including fraud
Irregularities, including fraud, are
instances of non-compliance with laws
and regulations. We design procedures
in line with our responsibilities, outlined
above, to detect material misstatements
in respect of irregularities, including
fraud. The extent to which our
procedures are capable of detecting
irregularities, including fraud is
detailedbelow.
11.1. Identifying and assessing potential
risks related to irregularities
In identifying and assessing risks
ofmaterial misstatement in respect
ofirregularities, including fraud
andnon-compliance with laws
andregulations, we considered
thefollowing:
• the nature of the industry and sector,
control environment and business
performance including the design
ofthe Group’s remuneration policies,
key drivers for directors’ remuneration,
bonus levels and performance targets;
• results of our enquiries of
management, internal audit, General
Counsel and the Audit Committee
about their own identification
andassessment of the risks of
irregularities, including those that
arespecific to the Group’s sector;
• any matters we identified having
obtained and reviewed the Group’s
documentation of their policies and
procedures relating to:
• identifying, evaluating and
complying with laws and regulations
and whether they were aware of any
instances of non-compliance
• detecting and responding to the
risks of fraud and whether they
haveknowledge of any actual,
suspected or alleged fraud;
• the internal controls established
tomitigate risks of fraud or
non-compliance with laws
andregulations;
• the matters discussed among the
audit engagement team, component
audit team and relevant internal
specialists, including tax, valuations,
pensions, IT, financial instrument,
industry, valuation, modelling and
analytics specialists regarding how
and where fraud might occur in the
financial statements and any potential
indicators of fraud.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
129
As a result of these procedures, we
considered the opportunities and
incentives that may exist within the
organisation for fraud and identified the
greatest potential for fraud in the
following area: impairment and
impairment reversals of property, plant
and equipment and right-of-use assets.
In common with all audits under ISAs
(UK), we are also required to perform
specific procedures to respond to the
risk of management override.
We also obtained an understanding of
the legal and regulatory frameworks
thatthe Group operates in, focusing on
provisions of those laws and regulations
that had a direct effect on the
determination of material amounts and
disclosures in the financial statements.
The key laws and regulations we
considered in this context included
theUK Companies Act, Listing Rules,
pensions legislation, UK and overseas
tax legislation.
In addition, we considered provisions
ofother laws and regulations that do
nothave a direct effect on the financial
statements but compliance with
whichmay be fundamental to the
Group’s ability to operate or to avoid
amaterial penalty.
11.2. Audit response to risks identified
As a result of performing the above, we
identified impairment and impairment
reversals of property, plant and
equipment and right-of use assets as a
key audit matter related to the potential
risk of fraud. The key audit matters
section of our report explains the matter
in more detail and also describes the
specific procedures we performed in
response to that key audit matter.
In addition to the above, our procedures
to respond to risks identified included
the following:
• reviewing the financial statement
disclosures and testing to supporting
documentation to assess compliance
with provisions of relevant laws
andregulations described as
havingadirect effect on the
financialstatements;
• enquiring of management, the Audit
Committee and General counsel
concerning actual and potential
litigation and claims;
• performing analytical procedures to
identify any unusual or unexpected
relationships that may indicate risks
ofmaterial misstatement due to fraud;
• reading minutes of meetings of those
charged with governance, reviewing
internal audit reports and reviewing
correspondence with HMRC; and
• in addressing the risk of fraud through
management override of controls,
testing the appropriateness of journal
entries and other adjustments;
assessing whether the judgements
made in making accounting estimates
are indicative of a potential bias; and
evaluating the business rationale of
any significant transactions that are
unusual or outside the normal course
of business.
We also communicated relevant
identified laws and regulations and
potential fraud risks to all engagement
team members including internal
specialists and the component audit
team and remained alert to any
indications of fraud or non-compliance
with laws and regulations throughout
the audit.
Whitbread Annual Report and Accounts 2022/23
130
Report on the audit of the financial statements continued
12. Opinions on other matters
prescribed by the Companies
Act 2006
In our opinion the part of the directors’
remuneration report to be audited has
been properly prepared in accordance
with the Companies Act 2006.
In our opinion, based on the work
undertaken in the course of the audit:
• the information given in the
strategic report and the directors’
report for the financial year for
which the financial statements are
prepared is consistent with the
financial statements; and
• the strategic report and the
directors’ report have been
prepared in accordance with
applicable legal requirements.
In the light of the knowledge and
understanding of the Group and
theparent company and their
environment obtained in the course of
the audit, we have not identified any
material misstatements in the strategic
report or the directors’ report.
13. Corporate Governance
Statement
The Listing Rules require us to review
the directors’ statement in relation to
going concern, longer-term viability and
that part of the Corporate Governance
Statement relating to the Group’s
compliance with the provisions of the
UK Corporate Governance Code
specified for our review.
Based on the work undertaken as
part of our audit, we have concluded
that each of the following elements of
the Corporate Governance Statement
is materially consistent with the
financial statements and our
knowledge obtained during the audit:
• the directors’ statement with
regards to the appropriateness of
adopting the going concern basis
ofaccounting and any material
uncertainties identified set out
onpage 121;
• the directors’ explanation as to
itsassessment of the Group’s
prospects, the period this
assessment covers and why
theperiod is appropriate set
outonpage 67;
• the directors’ statement on fair,
balanced and understandable set
out on page 60;
• the board’s confirmation that it has
carried out a robust assessment of
the emerging and principal risks set
out on page 60;
• the section of the annual report
thatdescribes the review of
effectiveness of risk management
and internal control systems set out
on page 60; and
• the section describing the work
ofthe Audit Committee set out
onpage 86.
14. Matters on which we are
required to report by exception
14.1. Adequacy of explanations received
and accounting records
Under the Companies Act 2006 we
arerequired to report to you if, in
ouropinion:
• we have not received all the
information and explanations
werequire for our audit; or
• adequate accounting records have
notbeen kept by the parent company,
or returns adequate for our audit have
not been received from branches not
visited by us; or
• the parent company financial
statements are not in agreement with
the accounting records and returns.
We have nothing to report in respect
of these matters.
14.2. Directors’ remuneration
Under the Companies Act 2006 we are
also required to report if in our opinion
certain disclosures of directors’
remuneration have not been made or
the part of the directors’ remuneration
report to be audited is not in agreement
with the accounting records and returns.
We have nothing to report in respect
of these matters.
15. Other matters which we are
required to address
15.1. Auditor tenure
Following the recommendation of the
Audit Committee, we were appointed by
the members on 21st June 2015 to audit
the financial statements for the year
ending 3rd March 2016 and subsequent
financial periods. The period of total
uninterrupted engagement including
previous renewals and reappointments
ofthe firm is eight years, covering
theyears ending 3rd March 2016
to2ndMarch 2023.
15.2. Consistency of the audit
reportwith the additional report
totheAudit Committee
Our audit opinion is consistent with the
additional report to the Audit Committee
we are required to provide in accordance
with ISAs (UK).
16. Use of our report
This report is made solely to the
company’s members, as a body, in
accordance with Chapter 3 of Part 16 of
the Companies Act 2006. Our audit work
has been undertaken so that we might
state to the company’s members those
matters we are required to state to them
in an auditor’s report and for no other
purpose. 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.
As required by the Financial Conduct
Authority (FCA) Disclosure Guidance and
Transparency Rule (DTR) 4.1.14R, these
financial statements form part of the
European Single Electronic Format
(ESEF) prepared Annual Financial Report
filed on the National Storage Mechanism
of the UK FCA in accordance with the
ESEF Regulatory Technical Standard
(‘ESEF RTS’). This auditor’s report
provides no assurance over whether
theannual financial report has been
prepared using the single electronic
format specified in the ESEF RTS.
Kate J Houldsworth FCA
(Seniorstatutory auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
London, UK
24 April 2023
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
131
Report on other legal and regulatory requirements
132
Contents
133 Consolidated income statement
133 Earnings per share
134 Consolidated statement of comprehensive income
135 Consolidated statement of changes in equity
136 Consolidated balance sheet
137 Consolidated cash flow statement
138 Notes to the consolidated financial statements
Consolidated accounts 2022/23
Whitbread Annual Report and Accounts 2022/23
132
133
Consolidated income statement
Year ended 2 March 2023
52 weeks to 2 March 2023 53 weeks to 3 March 2022
Notes
Before
adjusting
items
£m
Adjusting
items
(Note 6)
£m
Statutory
£m
Before
adjusting
items
£m
Adjusting
items
(Note 6)
£m
Statutory
£m
Revenue 3 2,62 5. 2 – 2 ,625. 2 1 ,7 0 3 . 4 – 1 ,70 3. 4
Other income 4 8.0 4.7 12 .7 1 2 2.4 8 .7 1 31 .1
Operating costs 5 (2 ,09 0. 5) (4 3 . 2) (2 ,1 33 .7) (1,67 1.1) 65. 3 (1 ,6 0 5.8)
Impairment of loans to joint ventures 16 (1 .5) – (1 .5) (1. 8) – (1 . 8)
OPERATING PROFIT/(LOSS) BEFORE
JOINTVENTURES 541 .2 (38.5) 502 .7 1 52.9 74 . 0 2 26.9
Share of profit from joint ventures 16 2.3 – 2.3 0.4 – 0. 4
OPERATING PROFIT/(LOSS) 3 543. 5 (38. 5) 505.0 1 5 3.3 74 . 0 2 2 7. 3
Finance costs
8 (166 . 9) – (16 6. 9) (173.6) – (173 .6)
Finance income
8 36.8 – 36. 8 4.5 – 4.5
PROFIT/(LOSS) BEFORE TAX 3 41 3.4 (3 8. 5) 3 74 . 9 (1 5. 8) 74 . 0 5 8.2
Tax (expense)/credit 10 (85. 2) (10. 9) (96. 1) 10 .7 (2 6 .4) (1 5 .7)
PROFIT/(LOSS) FOR THE YEAR 328. 2 (4 9 . 4) 2 78.8 (5.1) 4 7. 6 42 .5
Earnings per share
(Note 11)
52 weeks to 2 March 2023 53 weeks to 3 March 2022
pence pence pence pence pence pence
Basic 162. 9 (2 4. 5) 1 38.4 (2 . 5) 23.6 21 .1
Diluted 161 . 8 (24 .3) 13 7 .5 (2 . 5) 2 3.4 20.9
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
133
Strategic report Governance Financial statements Other information
134
Consolidated statement of comprehensive income
Year ended 2 March 2023
Notes
52 weeks
to 2 March
2023
£m
53 weeks
to 3 March
2022
£m
PROFIT FOR THE YEAR 27 8.8 42.5
ITEMS THAT WILL NOT BE RECLASSIFIED TO THE INCOME STATEMENT:
Remeasurement (loss)/gain on defined benefit pension scheme 32 (223 .6) 31 8.8
Current tax on defined benefit pension scheme 10 0 .7 (2. 3)
Deferred tax on defined benefit pension scheme 10 5 4 .7 (8 8.0)
(16 8. 2) 2 28.5
ITEMS THAT MAY BE RECLASSIFIED SUBSEQUENTLY TO THE INCOME STATEMENT:
Net (loss)/gain on cash flow hedges 25 (1.3) 2.4
Deferred tax on cash flow hedges 10 – (0 . 5)
Net (loss)/gain on hedge of a net investment 25 (22 . 2) 9.0
Deferred tax on net loss/(gain) on hedge of a net investment 10 2.1 (0. 8)
Cost of hedging 25 1.1 2.5
(20. 3) 1 2.6
Exchange differences on translation of foreign operations 3 7. 3 (16 .0)
Deferred tax on exchange differences on translation of foreign operations (4 . 0) 2 .7
33.3 (13. 3)
OTHER COMPREHENSIVE (LOSS)/INCOME FOR THE YEAR, NET OF TAX (1 55. 2) 2 2 7. 8
TOTAL COMPREHENSIVE INCOME FOR THE YEAR, NET OF TAX 123.6 270. 3
Whitbread Annual Report and Accounts 2022/23
134
135
Consolidated statement of changes in equity
Year ended 2 March 2023
Share
capital
(Note 27)
£m
Share
premium
(Note 28)
£m
Capital
redemption
reserve
(Note 28)
£m
Retained
earnings
(Note 28)
£m
Currency
translation
reserve
(Note 28)
£m
Other
reserves
(Note 28)
£m
Total
£m
At 25 February 2021 1 6 4 .7 1 ,0 2 2. 9 50. 2 4,9 4 4.8 2 8 .7 (2,377 .2) 3,8 3 4 .1
Profit for the year – – – 42 .5 – – 42. 5
Other comprehensive income – – – 2 28.5 (4. 4) 3 .7 2 2 7. 8
Total comprehensive income – – – 27 1 .0 (4 . 4) 3 .7 270.3
Ordinary shares issued on exercise of
employee share options (Note 27) 0.1 1.8 – – – – 1 .9
Loss on ESOT shares issued – – – (3. 2) – 3.2 –
Accrued share-based payments (Note 31) – – – 1 2.9 – – 1 2.9
Tax on share-based payments – – – (0. 2) – – (0. 2)
AT 3 MARCH 2022 16 4.8 1 ,0 24 .7 5 0. 2 5, 225 .3 2 4.3 (2, 370. 3) 4,119.0
Profit for the year – – – 27 8.8 – – 27 8.8
Other comprehensive income – – – (16 8. 2) 10.7 2. 3 (1 55. 2)
TOTAL COMPREHENSIVE INCOME – – – 1 10.6 10.7 2.3 123.6
Ordinary shares issued on exercise of
employee share options (Note 27) 0.1 1 .9 – – – – 2 .0
Loss on ESOT shares issued – – – (4 . 3) – 4 .3 –
Accrued share–based payments (Note 31) – – – 1 7. 7 – – 1 7. 7
Tax on share–based payments – – – (0. 1) – – (0. 1)
Equity dividends paid – – – (119. 1) – – (1 19. 1)
Purchase of ESOT shares – – – – – (31 .7) (31 .7)
AT 2 MARCH 2023 164 .9 1 ,026.6 50. 2 5, 2 30.1 35.0 (2 , 3 95 . 4) 4, 111 .4
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
135
Strategic report Governance Financial statements Other information
136
Consolidated balance sheet
At 2 March 2023
Notes
2 March
2023
£m
3 March
2022
£m
NON-CURRENT ASSETS
Intangible assets 13 179.6 1 5 9.3
Right-of-use assets 22 3 ,504. 6 3,267 .6
Property, plant and equipment 14 4,5 54.2 4,227 .1
Investment in joint ventures 16 48. 2 41 . 1
Derivative financial instruments 25 – 1 5.8
Defined benefit pension surplus 32 324 .7 52 2.6
8,611 .3 8,233 .5
CURRENT ASSETS
Inventories 17 2 1 .7 1 9.4
Trade and other receivables 18 141 .8 116.4
Cash and cash equivalents 19 1,164.8 1,132.4
1, 328 .3 1,268.2
Assets classified as held for sale 14 3.2 6 4.8
TOTAL ASSETS 9,9 4 2 . 8 9,5 6 6 .5
CURRENT LIABILITIES
Borrowings 20 – –
Lease liabilities 22 14 4.1 1 2 9.3
Provisions 23 2 0.2 1 9.6
Current tax liabilities 4 .6 –
Trade and other payables 26 676 .7 5 7 0 .7
845 .6 71 9.6
NON-CURRENT LIABILITIES
Borrowings 20 99 3.4 9 91 .9
Lease liabilities 22 3,81 4 .3 3,5 72.5
Provisions 23 8. 3 1 1 .7
Derivative financial instruments 25 7. 8 –
Deferred tax liabilities 10 1 58. 2 1 5 0.6
Trade and other payables 26 3.8 1.2
4,985.8 4 , 7 2 7. 9
TOTAL LIABILITIES 5,8 31 .4 5 , 4 4 7. 5
NET ASSETS 4, 111 .4 4 ,1 1 9. 0
EQUITY
Share capital 27 16 4. 9 164 .8
Share premium 28 1 ,026.6 1 , 0 2 4 .7
Capital redemption reserve 28 5 0.2 5 0.2
Retained earnings 28 5, 230. 1 5, 2 25.3
Currency translation reserve 28 35 .0 24. 3
Other reserves 28 (2 , 3 95 . 4) (2,37 0.3)
TOTAL EQUITY 4,111 .4 4, 1 1 9.0
Dominic Paul Chief Executive Hemant Patel Chief Financial Officer 24 April 2023
Whitbread Annual Report and Accounts 2022/23
136
137
Consolidated cash flow statement
At 2 March 2023
Notes
52 weeks
to 2 March
2023
£m
53 weeks
to 3 March
2022
£m
CASH GENERATED FROM OPERATIONS 29 99 6.3 6 9 3 .7
Payments against provisions (2 .7) (18 . 9)
Defined benefit pension scheme payments 32 (1 5 .7) (14.8)
Interest paid – lease liabilities 22 (1 38 .7) (1 3 3. 2)
Interest paid – other (32 .0) (2 0. 2)
Interest received 22.6 2.2
Corporation taxes paid (2 9.9) (0.1)
NET CASH FLOWS FROM OPERATING ACTIVITIES 799.9 5 0 8 .7
CASH FLOWS (USED IN)/FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment and investment properties 3 (4 8 2 . 0) (2 0 0. 4)
Proceeds from disposal of property, plant and equipment 59.6 56.4
Investment in intangible assets 13 (36. 8) (2 1 . 1)
Payment of deferred and contingent consideration 26 (25. 3) (36.3)
Capital contributions to joint ventures 16 – (1 .4)
Loans advanced to joint ventures 16 (1 .5) (1 .8)
NET CASH FLOWS USED IN INVESTING ACTIVITIES (4 8 6 . 0) (2 0 4 .6)
CASH FLOWS (USED IN)/FROM FINANCING ACTIVITIES
Proceeds from issue of shares on exercise of employee share options 27 2 .0 1.9
Drawdowns of long-term borrowings – 5 0.0
Repayments of long-term borrowings – (3 5 3. 9)
Payment of facility fees (4 . 2) –
Net lease incentives received 3.5 2.0
Payment of principal of lease liabilities (133.9) (1 2 7. 1)
Purchase of own shares for ESOT 28 (31 .7) –
Dividends paid 12 (119. 1) –
NET CASH FLOWS USED IN FINANCING ACTIVITIES (283.4) (4 2 7. 1)
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 21 3 0.5 (1 2 3 .0)
Opening cash and cash equivalents 21 1 ,132 .4 1,256. 0
Effect of foreign exchange rate changes 21 1 .9 (0. 6)
CLOSING CASH AND CASH EQUIVALENTS 19 1,164.8 1,132.4
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
137
Strategic report Governance Financial statements Other information
138
1 GENERAL INFORMATION AND AUTHORISATION OF CONSOLIDATED
FINANCIAL STATEMENTS
The consolidated financial statements of Whitbread PLC for the year ended 2 March 2023 were authorised for issue by
the Board of Directors on 24 April 2023. Whitbread PLC is a public company limited by shares incorporated in the United
Kingdom under the Companies Act and is registered in England and Wales. The Company’s ordinary shares are traded
on the London Stock Exchange. The address of the registered office is shown on page 120.
Whitbread PLC, its subsidiaries and joint ventures, operate hotels and restaurants, located in the UK and internationally.
2 ACCOUNTING POLICIES
Basis of accounting and preparation
The consolidated financial statements of Whitbread PLC and all its subsidiaries have been prepared in accordance with
international accounting standards in conformity with the requirements of the Companies Act 2006 and UK-adopted
international accounting standards.
The consolidated financial statements have been prepared on the historical cost basis, except for certain financial
instruments that are measured at fair value at the end of each reporting period and the defined benefit pension
scheme as explained in the accounting policies below.
The consolidated financial statements are presented in pounds sterling and all values are rounded to the nearest hundred
thousand except when otherwise indicated. The financial year represents the 52 weeks to 2 March 2023 (prior financial year:
53 weeks to 3 March 2022).
Going concern
A combination of the strong cash flows generated by the business, and the significant available headroom on its credit
facilities, support the directors’ view that the Group has sufficient funds available for it to meet its foreseeable working
capital requirements. In reaching this conclusion, the directors have considered all elements of the capital allocation
framework. The directors have also determined that, over the period of the going concern assessment, there is not expected
to be a significant impact as a result of climate change.
The directors have therefore concluded that the going concern basis of preparation remains appropriate.
Notes to the consolidated financial statements
At 2 March 2023
Whitbread Annual Report and Accounts 2022/23
138
139
2 ACCOUNTING POLICIES CONTINUED
Changes in accounting policies
The accounting policies adopted in the preparation of these consolidated financial statements are consistent with those
followed in the preparation of the consolidated financial statements for the year ended 3 March 2022, except for the
adoption of the new standards and policies applicable for the year ended 2 March 2023. The significant accounting policies
adopted during the year are set out below. They have been assessed as having minimal or no financial impact.
The Group has applied the following standards and amendments for the first time for the annual reporting period
commencing 4 March 2022:
• Amendments to IAS 16 Property, Plant and Equipment – proceeds before intended use (effective for periods beginning
on or after 1 January 2022)
• Amendments to IAS 37 – Onerous Contracts – Cost of Fulfilling a Contract (effective for periods beginning on or after
1 January 2022)
• Amendments to IFRS 3 – Reference to the Conceptual Framework (effective for periods beginning on or after
1 January 2022)
• Annual Improvements to IFRS Standards 2018-2020 Cycle
Standards issued by the IASB not effective for the current year and not early adopted by the Group
Whilst the following standards and amendments are relevant to the Group, they have been assessed as having minimal or no
financial impact or additional disclosure requirements at this time:
• IFRS 17 Insurance Contracts (effective for periods beginning on or after 1 January 2023)
• Amendments to IAS 1 – Classification of Liabilities as Current or Non-Current (effective for periods beginning on or after
1 January 2023)
• Amendments to IAS 1 – Disclosure of Accounting Policies (effective for periods beginning on or after 1 January 2023)
• Amendments to IFRS 10 Consolidated Financial Statements and IAS 28 – Sale or Contribution of Assets Between an
Investor and its Associate or Joint Venture
• Amendments to IAS 8 – Definition of Accounting Estimate (effective for periods beginning on or after 1 January 2023)
• Amendments to IAS 12 – Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction (effective for
periods beginning on or after 1 January 2023)
The Group does not intend to early adopt any of these new standards or amendments.
Basis of consolidation
The consolidated financial statements incorporate the accounts of Whitbread PLC and all its subsidiaries, together with the
Group’s share of the net assets and results of joint ventures incorporated using the equity method of accounting. These are
adjusted, where appropriate, to conform to Group accounting policies. The financial statements of significant trading
subsidiaries are prepared for the same reporting year as the parent company.
A subsidiary is an entity controlled by the Group. Control is achieved when the Company:
• has power over the investee;
• is exposed, or has rights, to variable returns from its involvement with the investee; and
• has the ability to use its power to affect its returns.
The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to
one or more of the three elements of control listed above.
Apart from the acquisition of Whitbread Group PLC by Whitbread PLC in 2000/01, which was accounted for using merger
accounting, acquisitions by the Group are accounted for under the acquisition method and any goodwill arising is capitalised
as an intangible asset. The results of subsidiaries acquired or disposed of during the year are included in the consolidated
financial statements from, or up to, the date that control passes respectively. All intra-group transactions, balances, income
and expenses are eliminated on consolidation. Unrealised losses are also eliminated, unless the transaction provides evidence
of an impairment of the asset transferred.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
139
Strategic report Governance Financial statements Other information
140
2 ACCOUNTING POLICIES CONTINUED
Business combinations
Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business
combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of assets transferred
by the Group, liabilities incurred by the Group to the former owners of the acquiree and any equity interest issued by
the Group in exchange for control of the acquiree. Acquisition-related costs are recognised in the consolidated income
statement as incurred.
When the consideration transferred by the Group in a business combination includes contingent consideration, the
contingent consideration is measured at its acquisition-date fair value and included as part of the consideration transferred
in a business combination. Changes in fair value of the contingent consideration that qualify as measurement period
adjustments are adjusted retrospectively, with corresponding adjustments against goodwill. Measurement period
adjustments are adjustments that arise from additional information obtained during the ‘measurement period’ (which cannot
exceed one year from the acquisition date) about facts and circumstances that existed at the acquisition date.
Changes in the fair value of the contingent consideration at subsequent reporting dates that do not qualify as measurement
period adjustments are recognised within finance costs in the consolidated income statement, unless the contingent
consideration is classified as equity.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination
occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional
amounts are adjusted during the measurement period (see above), or additional assets or liabilities are recognised, to reflect
new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have
affected the amounts recognised as of that date.
Goodwill
Goodwill arising on acquisition is capitalised and represents the excess of the fair value of consideration over the value of the
Group’s interest in the identifiable assets and liabilities of a subsidiary, at the date of acquisition. Goodwill is not amortised
but reviewed for impairment annually, or more frequently if events or changes in circumstances indicate that the carrying
value may be impaired. On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of
the profit or loss on disposal.
Intangible assets
Intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired separately from a business are carried initially at cost. An intangible asset acquired as part of a
business combination is recognised at fair value, separately from goodwill if the asset is separable, or arises from contractual
or other legal rights, and its fair value can be measured reliably.
Amortisation of IT software and technology is calculated on a straight-line basis over the estimated life which varies between
three and ten years.
The carrying values are reviewed for impairment if events or changes in circumstances indicate that they may not
be recoverable.
Software-as-a-Service (SaaS) arrangements
SaaS arrangements are service contracts providing the Company with the right to access the cloud provider’s application
software over the contract period. Costs incurred to configure or customise, and the ongoing fees to obtain access to the
cloud provider’s application software, are recognised as operating expenses when the services are received.
Some of these costs incurred are for the development of software code that enhances or modifies, or creates additional
capability to, existing on-premise systems and meets the definition of and recognition criteria for an intangible asset.
These costs are recognised as intangible software assets and amortised over the useful life of the software on a straight-line
basis. The useful lives of these assets are reviewed at least at the end of each financial year, and any change accounted for
prospectively as a change in accounting estimate.
Property, plant and equipment
Property, plant and equipment acquired separately from a business are stated at cost or deemed cost at transition to IFRS,
less accumulated depreciation and any impairment in value. Gross interest costs incurred on the financing of qualifying
assets are capitalised until the time that the assets are available for use. Property, plant and equipment acquired as part of
a business combination are recognised at fair value. Depreciation is calculated on a straight-line basis over the estimated
useful life of the asset as follows:
• freehold land is not depreciated;
• freehold and long leasehold buildings are depreciated to their estimated residual values over periods up to 50 years;
and
• plant and equipment is depreciated over three to 25 years.
Whitbread Annual Report and Accounts 2022/23
140
Notes to the Consolidated Financial Statements continued
141
2 ACCOUNTING POLICIES CONTINUED
The residual values and estimated useful lives are reviewed annually.
Profits or losses on disposal of property, plant and equipment reflect the difference between net selling price and carrying
amount at the date of disposal and are recognised in the consolidated income statement.
Investment property
Investment property assets, including properties which are owned by the Group and properties which are leased by the
Group, are carried at cost less accumulated depreciation and any recognised impairment in value. The depreciation policies
for investment property are consistent with those described for property, plant and equipment.
Leases
Right-of-use assets
The Group recognises right-of-use assets for hotel and restaurant properties which are used in the Premier Inn business and
other equipment at the commencement date of the lease (i.e. the date the underlying asset is available for use). Right-of-use
assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement
of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs
incurred, and lease payments made at or before the commencement date, less any lease incentives received. Unless the
Group is reasonably certain to obtain ownership of the leased asset at the end of the lease term, the recognised right-of-use
asset is depreciated over the shorter of its estimated useful life and lease term.
Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease
payments to be made over the lease term. The lease payments include fixed payments and variable lease payments that
depend on an index or a rate less any lease incentives receivable. Variable lease payments that do not depend on an index
or a rate (e.g. turnover rent) are recognised as an expense in the period over which the event or condition that triggers the
payment occurs. The Group incurs service charges on property leases which are non-lease components of the contract
under IFRS 16 and therefore these charges are recorded separately within operating costs.
In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease
commencement date if the interest rate implicit in the lease is not readily determinable. Incremental borrowing rates are
determined quarterly and depend on the country, currency and start date of the lease. The incremental borrowing rate is
determined based on a series of inputs including: the risk-free rate based on Government bond rates; a country specific risk
adjustment; and a credit risk adjustment based on the Group’s credit rating.
After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for
lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification or a change
in the lease term. Cash outflows relating to lease interest are recorded within net cash flows from operating activities and
cash outflows relating to principal repayments are included within net cash flows from financing activities in the consolidated
cash flow statement.
Sale and leaseback
A sale and leaseback transaction occurs when the Group sells an asset and immediately reacquires the use of same asset in
the same state as sold by entering into a lease with the buyer. A sale occurs when control of the underlying asset passes to
the buyer. A lease liability is recognised, the associated property, plant and equipment asset is derecognised, and a right-of-
use asset is recognised at the proportion of the carrying value relating to the right retained. Any gain or loss arising therefore
relates to the rights transferred to the buyer and development of the underlying asset.
Rental income
The Group recognises rental income from leases on a straight-line basis over the lease term within other income in the
consolidated income statement.
Impairment of non-current assets
Property, plant and equipment and right-of-use assets
The carrying values of property, plant and equipment and right-of-use assets are reviewed for impairment whenever events
or changes in circumstances indicate that their carrying values may not be recoverable. For the purposes of the impairment
review, the Group considers each trading outlet to be a separate cash generating unit (CGU). Consideration is also given,
where appropriate, to the market value of the asset either from independent sources or, in conjunction with an accepted
industry valuation methodology. Any impairment in the values of property, plant and equipment and right-of-use assets is
charged to the consolidated income statement.
The Group assesses assets or groups of assets for impairment whenever events or changes in circumstances indicate that
the carrying value of an asset may not be recoverable. Individual assets are grouped, for impairment assessment purposes,
at the lowest level at which there are identifiable cash flows that are largely independent of the cash flows of other groups
of assets (cash generating units or CGUs). If such indication of impairment exists or when annual impairment testing for an
asset group is required, the Group makes an estimate of the recoverable amount.
The recoverable amount of an asset or CGU is the greater of its fair value less costs of disposal and value in use. In assessing
value in use, the estimated future cash flows are discounted to their present value, using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset. For an asset that does not
generate largely independent cash inflows, the recoverable amount is determined with reference to the CGU to which the
asset belongs. Impairment losses are recognised in the consolidated income statement within operating costs.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
141
Strategic report Governance Financial statements Other information
142
2 ACCOUNTING POLICIES CONTINUED
An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its estimated recoverable amount.
Impairment losses recognised in respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated
to the units and then to reduce the carrying amounts of other assets in the CGU, on a pro-rata basis.
An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment
losses may no longer exist or may have decreased. If such an indication exists, the CGU’s recoverable amount is estimated.
A previously recognised impairment loss is reversed only if there has been a change in the estimated future cash flows used
to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case, the carrying
amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that
would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years.
Such a reversal is recognised in the consolidated income statement. After such a reversal, the depreciation charge is
adjusted in future periods to allocate the asset’s carrying amount, less any residual value, on a straight-line basis over its
remaining useful life.
For the purposes of impairment testing, all centrally held assets are allocated in line with IAS 36 to CGUs based on
management’s view of the consumption of the asset. Any resulting impairment is recorded against the centrally held asset.
Goodwill
Goodwill acquired through business combinations is allocated to groups of CGUs at the level management monitors
goodwill, which is at an operating segment level. The Group performs an annual review of its goodwill to ensure that
its carrying amount is not greater than its recoverable amount. The recoverable amount is determined as the greater
of fair value, less costs of disposal and value in use. An impairment is then made to reduce the carrying amount to the
recoverable amount.
Investments in joint ventures
The Group assesses investments for impairment whenever events or changes in circumstances indicate that the carrying
value may not be recoverable. If any such indication of impairment exists, the carrying amount of the investment is
compared with its recoverable amount. Where the carrying amount exceeds the recoverable amount, the investment is
written down to its recoverable amount.
Assets held for sale
Non-current assets and disposal groups are classified as held for sale only if available for immediate sale in their present
condition and a sale is highly probable and expected to be completed within one year from the date of classification.
Such assets are measured at the lower of carrying amount and fair value, less the cost of disposal, and are not depreciated
or amortised.
In accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations, the net results of discontinued
operations are presented separately in the consolidated income statement.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is calculated on the basis of first in, first out and net
realisable value is the estimated selling price less any costs to sell.
Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of a past event, it is
probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made of the
amount of the obligation.
Provisions are discounted to present value, using a pre-tax discount rate that reflects current market assessments of the time
value of money and the risks specific to the liability. The amortisation of the discount is recognised as a finance cost.
Onerous contracts
Present obligations arising under onerous contracts are recognised and measured as provisions. An onerous contract is
considered to exist where the Group has a contract under which the unavoidable costs of meeting the obligations under the
contract exceed the economic benefits expected to be received under it.
Restructuring costs
A restructuring provision is recognised when the Group has developed a detailed formal plan and has raised a valid
expectation, in those affected, that it will carry out the restructuring by starting to implement the plan or announcing its
main features to those affected by it. The measurement of a restructuring provision includes only the direct expenditures
arising from the restructuring which are those amounts that are both necessarily entailed by the restructuring and not
associated with the ongoing activities of the entity.
Whitbread Annual Report and Accounts 2022/23
142
Notes to the Consolidated Financial Statements continued
143
2 ACCOUNTING POLICIES CONTINUED
Adjusting items and use of alternative performance measures
We use a range of measures to monitor the financial performance of the Group. These measures include both statutory
measures in accordance with IFRS and alternative performance measures (APMs) which are consistent with the way the
business performance is measured internally by the Board and Executive Committee. A glossary of APMs and reconciliations
to statutory measures is given on pages 206 to 210.
The term adjusted profit is not defined under IFRS and may not be directly comparable with adjusted profit measures used
by other companies. It is not intended to be a substitute for, or superior to, statutory measures of profit. Adjusted measures
of profitability are non-IFRS because they exclude amounts that are included in, or include amounts that are excluded from,
the most directly comparable measure calculated and presented in accordance with IFRS.
The Group makes certain adjustments to the statutory profit measures in order to derive many of its APMs. The Group’s
policy is to exclude items that are considered to be significant in nature and quantum, not in the normal course of
business or are consistent with items that were treated as adjusting in prior periods or that span multiple financial periods.
Treatment as an adjusting item provides users of the accounts with additional useful information to assess the year-on-year
trading performance of the Group.
On this basis, the following are examples of items that may be classified as adjusting items:
• net charges associated with the strategic review of the Group’s hotel and restaurant property estate;
• significant restructuring costs and other associated costs arising from strategy changes that are not considered by the
Group to be part of the normal operating costs of the business;
• significant pension charges arising as a result of the changes to UK defined benefit scheme practices;
• net impairment and related charges for sites which are/were underperforming that are considered to be significant in
nature and/or value to the trading performance of the business;
• costs in relation to non-trading legacy sites which are deemed to be significant and not reflective of the Group’s
ongoing trading results;
• transformation and change costs associated with the implementation of the Group’s strategic IT programme;
• profit or loss on the sale of a business or investment, and the associated cost impact on the continuing business from
the sale of the business or investment;
• acquisition costs incurred as part of a business combination or other strategic asset acquisitions;
• amortisation of intangible assets recognised as part of a business combination or other transaction outside of the
ordinary course of business; and
• tax settlements in respect of prior years, including the related interest and the impact of changes in the statutory tax
rate, the inclusion of which would distort year-on-year comparability, as well as the tax impact of the adjusting items
identified above.
The Group income statement is presented in a columnar format to enable users of the accounts to see the Group’s
performance before adjusting items, the adjusting items, and the statutory total on a line-by-line basis. The directors believe
that the adjusted profit and earnings per share measures provide additional useful information to shareholders on the
performance of the business. These measures are consistent with how business performance is measured internally by the
Board and Executive Committee.
Foreign currency translation
Monetary assets and liabilities denominated in foreign currencies are translated into functional currency at the rates of
exchange quoted at the balance sheet date. Non-monetary items that are measured in terms of historical cost in a foreign
currency are translated using the exchange rates as at the dates of the initial transactions.
Day-to-day transactions in a foreign currency are recorded in the functional currency at an average rate for the month
in which those transactions take place, which is used as a reasonable approximation to the actual transaction rate.
Translation differences on monetary items are taken to the consolidated income statement.
A number of subsidiaries within the Group have a non-sterling functional currency. The financial performance and end
position of these entities are translated into sterling in the consolidated financial statements. Balance sheet items are
translated at the rate applicable at the balance sheet date. Transactions reported in the consolidated income statement are
translated using an average rate for the month in which they occur.
The differences that arise from translating the results of foreign entities at average rates of exchange, and their assets and
liabilities at closing rates, are dealt with in a separate component of equity. On disposal of a foreign entity, the deferred
cumulative amount recognised in equity relating to that particular foreign operation is recognised in the consolidated
income statement. All other currency gains and losses are dealt with in the income statement.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
143
Strategic report Governance Financial statements Other information
144
2 ACCOUNTING POLICIES CONTINUED
Revenue recognition
Revenue is recognised at an amount that reflects the consideration to which the Group expects to be entitled in exchange
for transferring goods or services to a customer. Consideration is net of discounts, allowances for customer loyalty and other
promotional activities and amounts collected on behalf of other parties, such as value added tax. Revenue includes duties
which the Group pays as principal.
The Group has analysed its business activities and applied the five step model prescribed by IFRS 15 Revenue from Contracts
with Customers to each material line of business, as outlined below:
Sale of accommodation
The contract to provide accommodation is established when the customer books accommodation. The performance
obligation is to provide the right to use accommodation for a given number of nights, and the transaction price is the room
rate for each night determined at the time of booking. The performance obligation is met when the customer is given the
right to use the accommodation, and so revenue is recognised for each night as it takes place, at the room rate for that night.
Sale of food and beverage
The contract is established when the customer orders the food or beverage item and the performance obligation is the
provision of food and beverage by the outlet. The performance obligation is satisfied when the food and beverage is
delivered to the customer, and revenue is recognised at this point at the price for the items purchased. Payment is made on
the same day and consequently there are no contract assets or liabilities.
Payment terms
Customers may pay in advance for accommodation, food and beverage. In this case the Group has received consideration
for services not yet provided. This is treated as a contract liability until the performance obligation is met. The Group
has taken advantage of the practical expedient in IFRS 15 to not adjust the consideration for the effects of a financing
component as the period between payment and the performance obligation is less than one year.
Payment terms for corporate customers are generally 30 days with amounts recorded in trade and other receivables once
the performance obligations have been met.
Contract costs
The Group applies the practical expedient in paragraph 94 of IFRS 15 and consequently contract costs incurred related to
contracts with an amortisation period of less than one year have been expensed as incurred.
Variable consideration
The Group makes an estimate, based on historical information, of amounts that will be refunded to customers. The refund
liability represents variable consideration under IFRS 15 with revenue recognised reduced by this amount and a
corresponding liability recognised in other payables in the consolidated balance sheet.
Certain restaurants within the Group offer customer loyalty programmes where the customer can earn vouchers for historic
purchases which are redeemable as discounts on future purchases. The loyalty points issued by the Group are a separate
performance obligation providing a material right to a future discount. The sales price of goods is allocated to the loyalty
points and the goods sold based on their relative standalone selling prices, with the loyalty points standalone price based
on the value of the points to the customer, adjusted for expected redemption rates. The amount allocated to loyalty points
is deferred as a contract liability within trade and other payables. Revenue is recognised as the points are redeemed by
the customer.
Finance income
Interest income is recognised as the interest accrues, using the effective interest method.
Borrowing costs
Borrowing costs are recognised as an expense in the period in which they are incurred, except for gross interest costs
incurred on the financing of major projects, which are capitalised until the time that the projects are available for use.
Whitbread Annual Report and Accounts 2022/23
144
Notes to the Consolidated Financial Statements continued
145
2 ACCOUNTING POLICIES CONTINUED
Retirement benefits
In respect of the defined benefit pension scheme, the surplus recognised in the consolidated balance sheet represents the
fair value of scheme assets, reduced by the present value of the defined benefit obligation. Where the calculation results
in a surplus to the Group, the recognised asset is limited to the present value of any future available refunds from the plan.
The cost of providing benefits is determined using the projected unit credit actuarial valuation method. Remeasurements
are recognised in full in the period in which they occur in the statement of comprehensive income and are not reclassified
to the consolidated income statement in subsequent periods.
For defined benefit plans, the employer’s portion of the past and current service cost is charged to operating profit,
with net interest costs reported within finance costs. In addition, all administration costs, other than those relating to
the management of plan assets or taxes payable by the plan itself, are charged as incurred to operating costs in the
consolidated income statement. Net interest is calculated by applying the opening discount rate to the opening net
defined benefit obligation, taking into account the expected contributions and benefits paid.
On 20 November 2020, the High Court ruled that pension schemes will need to revisit and equalise guaranteed minimum
pensions for historic individual transfers. The ruling impacted the Group’s actuarial surplus as it will lead to an increase
in pension obligations. The Group recognised the increase in its defined benefit liability as a charge to the consolidated
income statement.
Curtailments and settlements relating to the Group’s defined benefit plan are recognised in the period in which the
curtailment or settlement occurs.
Payments to defined contribution pension schemes are charged as an expense as they fall due.
Government grants
A Government grant is recognised in the consolidated balance sheet within other receivables when there is reasonable
assurance that it will be received and that the Group will comply with the conditions attached to it. Grants are recognised
within other income in the consolidated income statement at a point in time to match the timing of the recognition of the
related expenses they are intended to compensate. Where cash is received in advance of the associated conditions being
met, the grant is recorded within trade and other payables in the consolidated balance sheet.
Share-based payment transactions
Equity-settled transactions
Certain employees and directors of the Group receive equity-settled remuneration in the form of share-based payment
transactions, whereby employees render services in exchange for shares or rights over shares. The cost of these equity-
settled transactions is measured by reference to the fair value, determined using a stochastic model, at the date at which
they are granted. The cost of equity-settled transactions is recognised, together with a corresponding increase in equity,
over the period in which the performance conditions or non-vesting conditions are fulfilled, ending on the relevant vesting
date. Except for awards subject to market-related conditions for vesting, the cumulative expense recognised for equity-
settled transactions, at each reporting date until the vesting date, reflects the extent to which the vesting period has expired,
and is adjusted to reflect the directors’ best available estimate of the number of equity instruments that will ultimately vest.
The income statement charge or credit for a period represents the movement in cumulative expense recognised as at the
beginning and end of that period. If options are subject to market-related conditions, awards are not cumulatively adjusted
for the likelihood of these targets being met. Instead, these conditions are included in the fair value of the awards.
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense
not yet recognised for the award is recognised immediately. Where an equity-settled award is forfeited, the related expense
recognised to date is reversed.
Where an equity-settled award is replaced by newly granted instruments, these are accounted for as a modification of
the existing award. When the terms of an equity-settled award are modified, the minimum expense recognised is the grant
date fair value of the unmodified award, provided the original vesting terms of the award are met. An additional expense,
measured as at the date of modification, is recognised for any modification that increases the total fair value of the share-
based payment transaction, or is otherwise beneficial to the employee.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
145
Strategic report Governance Financial statements Other information
146
2 ACCOUNTING POLICIES CONTINUED
Tax
The income tax charge represents both the income tax payable, based on profit for the year, and deferred income tax.
Deferred income tax is recognised in full, using the liability method, in respect of temporary differences between the tax
base of the Group’s assets and liabilities and their carrying amounts that have originated but have not been reversed by
the balance sheet date. No deferred tax is recognised if the temporary difference arises from the initial recognition of
goodwill, or the initial recognition of an asset or liability, in a transaction that is not a business combination and, at the
time of the transaction, affects neither the accounting profit nor taxable profit or loss. Deferred income tax is recognised
in respect of taxable temporary differences associated with investments in joint ventures, except where the timing of the
reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse
in the foreseeable future.
Deferred income tax assets are recognised to the extent that it is probable that taxable profit will be available against
which the deductible temporary differences or unused tax losses can be utilised. The carrying amount of deferred income
tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient
taxable profit will be available to allow all, or part of, the deferred income tax asset to be utilised.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the
asset is realised or the liability is settled, based on tax rates that have been enacted or substantively enacted at the balance
sheet date.
Income tax is charged or credited to other comprehensive income if it relates to items that are charged or credited to other
comprehensive income. Similarly, income tax is charged or credited directly to equity if it relates to items that are charged
or credited directly to equity. Otherwise, income tax is recognised in the consolidated income statement.
Investments in joint ventures
Investments in joint arrangements are classified as either joint operations or joint ventures depending on the contractual
rights and obligations of each investor. The Group has assessed the nature of its joint arrangements and determined them
to be joint ventures.
The Group’s investments in joint ventures are accounted for using the equity method. Under the equity method, the
investment in a joint venture is initially recognised at cost. The carrying amount of the investment is adjusted to recognise
changes in the Group’s share of net assets of the joint venture since the acquisition date. Goodwill relating to joint ventures
is included in the carrying amount of the investment.
The consolidated income statement reflects the Group’s share of the results of operations of the joint ventures.
Any change in other comprehensive income of those investees is presented as part of the Group’s consolidated
statement of comprehensive income. Unrealised gains and losses resulting from transactions between the Group
and the joint ventures are eliminated to the extent of the interest in the joint venture. When necessary, adjustments
are made to bring the accounting policies in line with those of the Group.
Whitbread Annual Report and Accounts 2022/23
146
Notes to the Consolidated Financial Statements continued
147
2 ACCOUNTING POLICIES CONTINUED
Financial assets
Trade receivables and contract assets
Trade receivables and contract assets are initially measured at fair value. Subsequently they are measured at amortised cost
as the objective of the business model is to hold the assets to collect contractual cash flows and the contractual terms of the
asset give rise to cash flows on specified dates which are solely payments of principal and interest.
In line with the IFRS 9 Financial Instruments ‘simplified approach’, the Group segments its trade receivables and contract
assets based on shared characteristics, and recognises a loss allowance for the lifetime expected credit loss for each
segment. The expected credit loss is based on the Group’s historical credit loss experience, adjusted for factors that are
specific to the debtors, general economic conditions and an assessment of the current and forecast conditions at the
reporting date.
Credit impaired financial assets
A financial asset is credit impaired when one of more events that have a detrimental impact on the estimated future cash
flows of that financial asset have occurred, such as significant financial difficulty of the debtor or default by the debtor.
The Group writes off a financial asset where there is no realistic prospect of recovery. Credit losses are recorded within
operating costs in the consolidated income statement.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank, cash in hand and deposits (including Money Market Funds) which are
short term, highly liquid and which are not at significant risk of changes in value.
Recognition and derecognition
The recognition of financial assets occurs when the Group becomes party to the contractual provisions of the instrument.
The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it
transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.
Derivatives and hedging
The Group enters into derivative transactions to manage its exposure to interest rate, foreign exchange rate and power
commodity price risks.
Derivatives are recognised initially at fair value on the date the contract is entered into and subsequently remeasured to their
fair value at each reporting date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is
designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on
the nature of the hedge relationship.
A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is
recognised as a financial liability. Derivatives are not offset in the financial statements unless the Group has both the legal
right and intention to offset.
A derivative is presented as a non-current asset or a non-current liability if the remaining maturity of the instrument is more
than 12 months and is not expected to be realised or settled within 12 months. Other derivatives are presented as current
assets or current liabilities.
The Group designates certain derivatives as hedging instruments in respect of interest rate, foreign currency and
power commodity price risks as either fair value hedges or cash flow hedges. Hedges of foreign exchange risk on firm
commitments are accounted for as cash flow hedges.
At the inception of the hedge relationship, the Group documents the relationship between the hedging instrument and
the hedged item, along with its risk management objectives and its strategy for undertaking various hedge transactions.
The Group documents whether the hedging instrument is effective in offsetting the hedged risk, by confirming that:
• there is an economic relationship between hedged items and the hedging instrument;
• the effect of credit risk does not dominate the value changes that result from that economic relationship; and
• the planned ratio of hedge: hedge item is the same as the actual ratio of hedge: hedge item.
The fair value change on qualifying fair value hedges is recognised in profit or loss.
Cash flow hedges
The effective portion of changes in the fair value of derivatives that are designated as cash flow hedges is recognised
in other comprehensive income and accumulated under the cash flow hedging reserve. Any gain or loss relating to the
ineffective portion of the hedge is recognised immediately in profit or loss. Amounts previously recognised in other
comprehensive income and accumulated in equity are reclassified to profit or loss in the periods when the hedged item
affects profit or loss, in the same line as the recognised hedged item.
The Group discontinues hedge accounting when the hedge relationship ceases to meet the qualifying criteria, or when the
hedging instrument expires, is sold, terminated or exercised.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
147
Strategic report Governance Financial statements Other information
148
2 ACCOUNTING POLICIES CONTINUED
Hedges of a net investment
Hedges of a net investment in a foreign operation, including a hedge of a monetary item that is accounted for as part of the
net investment, are accounted for in a way similar to cash flow hedges. Gains or losses on the hedging instrument relating
to the effective portion of the hedge are recognised in other comprehensive income while any gains or losses relating to
the ineffective portion are recognised in the statement of profit or loss. On disposal of the foreign operation, the cumulative
value of any such gains or losses recorded in equity is transferred to the statement of profit or loss.
The Group uses a cross currency swap as a hedge of its exposure to foreign exchange risk on its investments in foreign
subsidiaries. Refer to Note 25 for more details.
Financial liabilities
Debt and equity instruments are classified as financial liabilities or equity in accordance with the substance of the
contractual arrangements.
Financial liabilities are measured at amortised cost using the effective interest rate method unless they are required to be
measured at fair value through profit or loss or the Group has opted to measure them at fair value through the profit or loss.
The effective interest rate method calculates the amortised cost of a financial liability and allocates interest expense to the
relevant period.
Borrowings
Borrowings are initially recognised at the fair value of the consideration received, net of any directly associated issue costs.
Borrowings are subsequently recorded at amortised cost, with any difference between the amount initially recorded and the
redemption value recognised in the consolidated income statement using the effective interest method.
Contingent consideration
Contingent consideration, resulting from business combinations and asset acquisitions, is valued at fair value at the
acquisition date as part of the business combination. When the contingent consideration meets the definition of a financial
liability, it is subsequently remeasured to fair value at each reporting date. The determination of the fair value is based on
discounted cash flows.
Where the period between acquisition and payment is not significant, cash outflows for contingent consideration are
included within cash flows from investing activities. Where the period of deferral is significant, excess payments over the fair
value recognised at acquisition are recognised within cash flows from financing activities. None of the Group’s contingent
consideration is deemed to relate to post-acquisition remuneration.
Recognition and derecognition
The recognition of liabilities occurs when the Group becomes party to the contractual provisions of the instrument.
The derecognition of financial liabilities occurs when the obligation under the liability is discharged, cancelled or expires.
When the Group exchanges with the existing lender one debt instrument into another one with the substantially different
terms, such exchange is accounted for as an extinguishment of the original financial liability and the recognition of a new
financial liability.
Critical accounting judgements and key sources of estimation uncertainty
The preparation of financial statements requires management to make judgements, estimates and assumptions that affect
the amounts reported as assets and liabilities at the balance sheet date and the amounts reported as revenues and expenses
during the year. Although these amounts are based on management’s best estimates, events or actions may mean that
actual results ultimately differ from those estimates, and these differences may be material. These judgements and estimates
and the underlying assumptions are reviewed regularly.
The Group has considered the impact of climate-related risks on its financial performance and position, and although the
impact represents an uncertainty, it is not considered to be material.
Critical accounting judgements
The following are the critical accounting judgements, apart from those involving estimations (dealt with separately below)
that management has made in the process of applying the Group’s accounting policies and which have the most significant
effect on the amounts recognised in the financial statements.
Adjusting items
During the year certain items are identified and separately disclosed as adjusting items. Judgement is applied as to whether
the item meets the necessary criteria as per the accounting policy disclosed earlier in this note. This assessment covers
the nature of the item, cause of occurrence and the scale of impact of that item on reported performance. Reversals of
previous adjusting items are assessed based on the same criteria. Note 6 provides information on all of the items disclosed as
adjusting in the current year and comparative financial statements.
Whitbread Annual Report and Accounts 2022/23
148
Notes to the Consolidated Financial Statements continued
149
2 ACCOUNTING POLICIES CONTINUED
Property transaction including sale and leaseback of land
During the period, the Group entered into a sale and lease transaction of a single property, comprising land and a
hotel currently under construction. Under the agreement, the Group is acting as the developer of the site. As a part of
the transaction, the property is being developed into a completed hotel asset via a forward funding agreement with
a counterparty. The transaction’s sale, development and subsequent lease contracts were all negotiated together
as one commercial transaction, with the transaction prices allocated based on the negotiated position rather than
standalone contracts.
In relation to the land portion of the site sold, management has reviewed the criteria within IFRS 15 Revenue from Contracts
with Customers and IFRS 16 Leases, concluding that a sale and leaseback for the land has occurred to the counterparty.
In relation to the hotel under construction asset, management has reviewed IFRS 15, concluding that a sale for this asset has
occurred to the counterparty and the building leased back in the future will be the completed hotel, not the same asset that
was sold. Therefore, management has concluded that the current year sale and future lease of the completed hotel does not
represent a sale and leaseback under IFRS 16.
Treatment of sale and leaseback of land
The land on which the hotel is being developed has been sold with Whitbread holding no rights to re-obtain the legal title.
The performance obligation for the sale of land has been satisfied as defined under IFRS 15. A gain of £3.1m is recognised
on the sale of the land, which represents the proportion of the land assessed as having been sold and subject to leaseback
at practical completion of the site sold. In assessing the gain to be recognised on the sale and leaseback transaction,
management has considered the fair value of the land at the sale date against the consideration allocated for the sale of
the land.
Treatment for sale of hotel under construction
During the period, the performance obligation associated with the sale of the hotel under construction was assessed as
being satisfied such that the asset has been derecognised. Nil gain was recognised as allocated proceeds were substantially
similar to the carrying value of the building. The Group is exposed to cost overruns on the development of the hotel. Due to
the allocation of the transaction’s proceeds to the land, net costs of £1.7m have been recognised, reducing the overall
transaction’s gain in the reporting period as the commercial terms were negotiated together. The net gain recognised on this
transaction of £1.4m has been based on an assessment of the obligations completed under the terms of the agreement.
Key sources of estimation uncertainty
The following are the key areas of estimation uncertainty that may have a significant risk of causing a material adjustment
to the carrying amounts of assets and liabilities within the next financial year.
Defined benefit pension
Defined benefit pension plans are accounted for in accordance with actuarial advice using the projected unit credit method.
The Group makes significant estimates in relation to the discount rates, mortality rates and inflation rates used to calculate
the present value of the defined benefit obligation. Note 32 describes the assumptions used together with an analysis of the
sensitivity to changes in key assumptions.
Impairment testing – Property, plant and equipment and right-of-use assets
The performance of the Group’s impairment review requires management to make a number of estimates. These are set
out below:
Identification of indicators of impairment and reversal
The Group assesses each of its CGUs for indicators of impairment or reversal on an annual basis and, where there are
indicators of impairment or reversal, management performs an impairment assessment.
Inputs used to estimate value in use
The estimate of value in use is most sensitive to the following inputs:
• Five-year business plan – forecast cash flows for the initial five-year period are based on the five-year business plan,
which is based on results from FY23.
• Discount rate – judgement is required in estimating the weighted average cost of capital (WACC) of a typical market
participant and in assessing the specific country and currency risks associated with the Group. The rate used is adjusted
for the Group’s gearing, including equity, borrowings and lease liabilities.
• Immature sites – judgement is required to estimate the time taken for sites to reach maturity and the sites’ trading level
once they are mature.
Methodology used to estimate fair value
Fair value is determined using a range of methods, including present value techniques using assumptions consistent with
the value in use calculations and market multiple techniques using externally available data.
Key estimates and sensitivities for impairment of assets are disclosed in Note 15.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
149
Strategic report Governance Financial statements Other information
150
3 SEGMENT INFORMATION
The Group provides services in relation to accommodation, food and beverage both in the UK and internationally.
Management monitors the operating results of its operating segments separately for the purpose of making decisions
about allocating resources and assessing performance. Segment performance is measured based on adjusted operating
profit before joint ventures. Included within central and other in the following tables are the costs of running the public
company, other central overhead costs and share of profit from joint ventures.
Whitbread Annual Report and Accounts 2022/23
150
Notes to the Consolidated Financial Statements continued
151
3 SEGMENT INFORMATION CONTINUED
The following tables present revenue and profit information regarding business operating segments for the years ended
2 March 2023 and 3 March 2022.
REVENUE
52 weeks to 2 March 2023 53 weeks to 3 March 2022
UK &
Ireland
£m
Germany
£m
Central
and other
£m
Total
£m
UK &
Ireland
£m
Germany
£m
Central
and other
£m
Total
£m
Accommodation 1,795.0 100.1 – 1,895.1 1,157.8 29.1 – 1,186.9
Food, beverage and other items 712.7 17.4 – 730.1 510.4 6.1 – 516.5
REVENUE 2,507.7 117.5 – 2,625.2 1,668.2 35.2 – 1,703.4
PROFIT/(LOSS)
52 weeks to 2 March 2023 53 weeks to 3 March 2022
UK &
Ireland
£m
Germany
£m
Central
and other
£m
Total
£m
UK &
Ireland
£m
Germany
£m
Central
and other
£m
Total
£m
ADJUSTED OPERATING
PROFIT/(LOSS) BEFORE
JOINT VENTURES 616.6 (35.9) (39.5) 541.2 199.6 (15.4) (31.3) 152.9
Share of profit from joint
ventures – – 2.3 2.3 – – 0.4 0.4
ADJUSTED OPERATING
PROFIT/(LOSS) 616.6 (35.9) (37.2) 543.5 199.6 (15.4) (30.9) 153.3
Net finance costs (124.9) (13.8) 8.6 (130.1) (124.7) (8.5) (35.9) (169.1)
ADJUSTED PROFIT/(LOSS)
BEFORE TAX 491.7 (49.7) (28.6) 413.4 74.9 (23.9) (66.8) (15.8)
Adjusting items before tax
(Note 6) (38.5) 74.0
PROFIT BEFORE TAX 374.9 58.2
In relation to the previous year’s results, adjusted operating profit/(loss) for the UK & Ireland segment included the impact
of £126.5m from Government grants whilst the German segment included the impact of £44.3m. The UK & Ireland segment
includes the impact of the release of a previously held provision of £4.7m. Refer to Note 9 for details.
OTHER SEGMENT
INFORMATION
52 weeks to 2 March 2023 53 weeks to 3 March 2022
UK &
Ireland
£m
Germany
£m
Central
and other
£m
Total
£m
UK &
Ireland
£m
Germany
£m
Central
and other
£m
Total
£m
Capital expenditure:
  Property, plant and equipment
and investment property –
cash basis 405.9 76.1 – 482.0 148.1 52.3 – 200.4
  Property, plant and equipment
and investment property –
accruals basis (Note 14) 430.4 73.7 – 504.1 165.8 54.2 – 220.0
  Intangible assets (Note 13) 36.7 0.1 – 36.8 21.1 – – 21.1
Cash outflows from lease
interest and payment of principal
of lease liabilities 234.0 38.6 – 272.6 234.5 25.8 – 260.3
Depreciation – property, plant
and equipment and investment
property (Note 14) 152.2 11.0 – 163.2 148.3 9.6 – 157.9
Depreciation – right-of-use
assets (Note 22) 133.6 32.2 – 165.8 125.2 22.9 – 148.1
Amortisation (Note 13) 16.3 0.2 – 16.5 20.6 0.3 – 20.9
Segment assets and liabilities are not disclosed because they are not reported to, or reviewed by, the Chief Operating
Decision Maker.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
151
Strategic report Governance Financial statements Other information
152
3 SEGMENT INFORMATION CONTINUED
The Group’s revenue, split by country in which the legal entity resides, is as follows:
2022/23
£m
2021/22
£m
United Kingdom 2,487.7 1,661.8
Germany 117.5 35.2
Other 20.0 6.4
2,625.2 1,703.4
The Group’s non-current assets
1
, split by country in which the legal entity resides, are as follows:
2023
£m
2022
£m
United Kingdom 6,869.2 6,571.3
Germany 1,216.2 1,009.1
Other 201.2 114.7
8,286.6 7,695.1
1 Non-current assets exclude derivative financial instruments and the surplus on the Group’s defined benefit pension scheme.
4 OTHER INCOME
An analysis of the Group’s other income is as follows:
2022/23
£m
2021/22
£m
Rental income 3.1 7.9
Government grants
1
(Note 9) 4.7 113.8
Other 0.2 0.7
OTHER INCOME BEFORE ADJUSTING ITEMS 8.0 122.4
Legal claim settlement (Note 6) 4.7 –
VAT settlement (Note 6) – 8.7
OTHER INCOME 12.7 131.1
1 £4.7m has been released from a previously held provision relating to Government grants. Refer to Note 9 for details.
5 OPERATING COSTS
2022/23
£m
2021/22
£m
Cost of inventories recognised as an expense
1
229.0 146.6
Employee benefits expense
2
(Note 7) 784.3 678.9
Amortisation of intangible assets (Note 13) 16.5 20.9
Depreciation – property, plant and equipment and investment property (Note 14) 163.2 1 57.9
Depreciation – right-of-use assets (Note 22) 165.8 148.1
Utilities 117.2 87.8
Rates 125.0 71.2
Other site property costs 384.3 27 7.3
Variable lease payment expense (Note 22) 2.1 0.3
Net foreign exchange (gain)/loss (2.1) 2.1
Other operating charges
2
105.2 80.0
Adjusting operating costs
2
(Note 6) 43.2 (65.3)
2,133.7 1,605.8
1 Cost of inventories recognised as an expense includes £6.7m (2021/22: £6.1m) of inventory write downs recorded during the year.
2 Adjusting operating costs includes a charge for net impairments of £33.4m (2021/22: credit of £36.2m), a charge of £9.8m (2021/22: credit of £28.8m) relating to other
operating charges and a charge of £0.5m (2021/22: credit of £0.3m) relating to employee benefit expenses (see Note 7).
Whitbread Annual Report and Accounts 2022/23
152
Notes to the Consolidated Financial Statements continued
153
5 OPERATING COSTS CONTINUED
Fees paid to the Group’s auditor during the year consisted of:
2022/23
£m
2021/22
£m
Audit of the Group’s financial statements 1.2 1.0
Audit of the Group’s subsidiaries 0.6 0.6
TOTAL AUDIT FEES 1.8 1.6
Audit-related assurance 0.1 0.1
Other non-audit fees – –
TOTAL NON-AUDIT FEES 0.1 0.1
INCLUDED IN OTHER OPERATING CHARGES 1.9 1.7
6 ADJUSTING ITEMS
As set out in the policy in Note 2, we use a range of measures to monitor the financial performance of the Group. These
measures include both statutory measures in accordance with IFRS and APMs which are consistent with the way that
the business performance is measured internally. We report adjusted measures because we believe they provide both
management and investors with useful additional information about the financial performance of the Group’s businesses.
Adjusted measures of profitability represent the equivalent IFRS measures adjusted for specific items that we consider
hinder the comparison of the financial performance of the Group’s businesses either from one period to another or with
other similar businesses.
2022/23
£m
2021/22
£m
ADJUSTING ITEMS WERE AS FOLLOWS:
Other income:
VAT settlement
1
– 8.7
Legal claim settlement
2
4.7 –
ADJUSTING OTHER INCOME 4.7 8.7
Operating costs:
Net impairment (charges)/reversals – property, plant and equipment and right-of-use assets
3
(33.4) 36.2
UK restructuring
4
– 0.3
Net gains on disposals, property and other provisions
5
4.0 28.8
Strategic IT programme costs
6
(13.8) –
ADJUSTING OPERATING COSTS (43.2) 65.3
ADJUSTING ITEMS BEFORE TAX (38.5) 74.0
Tax on adjusting items (1.1) (13.3)
Impact of change in tax rates (9.8) (13.1)
ADJUSTING TAX EXPENSE (10.9) (26.4)
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
153
Strategic report Governance Financial statements Other information
154
6 ADJUSTING ITEMS CONTINUED
1 During 2021/22, HMRC confirmed it would not appeal the ruling of the First Tier Tribunal in the case of Rank Group plc that VAT was incorrectly applied to revenues
earned from certain gaming machines from 2006 to 2013. The Group has submitted claims for the repayment of overpaid VAT amounting to £8.7m which are
substantially similar.
2 During the year, the Group received a settlement of £4.7m in relation to a legal claim made against a payment card scheme provider.
3 During the year, the Group identified impairment indicators and indicators of impairment reversals relating to assets held by the Group both at the half-year end
date and at the year-end date. An impairment review of those assets was undertaken, resulting in adjusting net impairment charges of £30.1m. This is made up of
impairment charges on trading sites of £85.0m (£76.1m relating to property, plant and equipments and £8.9m relating to right-of-use assets) offset by impairment
reversals of £54.9m (£35.5m relating to property, plant and equipment and £19.4m relating to right-of-use assets). In addition, impairment charges of £3.3m have been
recorded in relation to assets held for sale during the year. This brings the total adjusting net impairment charges to £33.4m within operating costs. Further information
is provided in Note 15.
During 2021/22, a total net impairment reversal of £42.0m was recorded, made up of £10.5m of impairment charges on trading sites (£10.1m relating to property, plant
and equipment and £0.4m relating to right-of-use assets), offset by impairment reversals of £52.5m (£30.4m relating to property, plant and equipment and £22.1m
relating to right-of-use assets). In addition, an impairment charge of £5.8m was recorded in relation to assets classified as held for sale. This brings the total adjusting
net impairment reversals to £36.2m within operating costs.
4 During 2021/22, the Group released the remaining provision of £0.3m following the completion of its restructuring of the Support Centre and site operations after it
had recognised redundancy and project costs of £12.1m during 2020/21.
5 During the year, the Group entered into a sale and lease transaction of land and a hotel currently under construction. As a result of this transaction, the Group received
proceeds of £46.4m and recognised a net gain of £1.4m. The completed hotel and land will be leased back at practical completion to the Group. In addition, the Group
increased its property related provision by £0.4m and made a profit on other property disposals of £3.0m.
During 2021/22, the Group disposed of a single property as part of a sale and leaseback transaction for gross proceeds of £40.0m. A profit on disposal of £27.5m was
recognised on disposal of the property. In addition, during 2021/22, the Group made a profit on other property disposals of £5.7m and recognised other provisions of
£4.4m relating to historic indirect tax matters.
6 During the year, the Group has assessed the presentation of costs incurred in relation to the current and future strategic IT programme implementations.
The programmes currently scheduled include the Group’s Hotel Management System and HR & Payroll System. These represent significant business change costs for
the Group rather than replacements of IT systems with Software as a Service (SaaS). The start date of these projects varies and as such we expect costs to be incurred
within this category over the next few financial years, with their strategic benefit seen as lasting multiple years. At this time, the Group expects to incur costs relating
to the Group’s Hotel Management System and HR & Payroll System presented within adjusting items across future financial years as follows; during the financial year
ended 2024 between £15.0m and £25.0m, during the financial year ended 2025 between £15.0m and £25.0m and during the financial year ended 2026 up to £5.0m.
7 EMPLOYEE BENEFITS EXPENSE
2022/23
£m
2021/22
£m
Wages and salaries 716.1 621.0
Social security costs 55.4 46.7
Defined contribution pension costs 12.8 11.2
784.3 678.9
The amounts above exclude adjusting items. Wages and salaries excludes a charge of £0.5m this year relating to the
Strategic IT programme costs (2021/22: credit of £0.3m relating to the restructuring of Group’s operations).
Included in wages and salaries is a share-based payments expense of £17.7m (2021/22: £12.9m), which arises from
transactions accounted for as equity-settled share-based payments.
Whitbread Annual Report and Accounts 2022/23
154
Notes to the Consolidated Financial Statements continued
155
7 EMPLOYEE BENEFITS EXPENSE CONTINUED
Employee costs are split between hourly paid and salaried employees as below:
2022/23
£m
2021/22
£m
Employee costs – hourly paid 520.1 440.3
Employee costs – salaried 264.2 238.6
784.3 678.9
Average number of employees directly employed
2022/23
Number
2021/22
Number
UK & Ireland 37,865 33,546
Germany 1,139 782
39,004 34,328
Employees of joint ventures are excluded from the numbers above.
Directors’ remuneration is disclosed below:
2022/23
£m
2021/22
£m
Directors’ remuneration 4.8 3.8
Aggregate contributions to the defined contribution pension scheme – –
Aggregate gains on the exercise of share options 1.0 1.2
The number of directors accruing benefits under the defined benefit pension scheme were nil (2021/22: nil).
8 FINANCE (COSTS)/INCOME
2022/23
£m
2021/22
£m
FINANCE COSTS
Interest on bank loans and overdrafts (5.1) (7.4)
Interest on other loans (24.3) (30.0)
Interest on lease liabilities (Note 22) (138.7) (133.2)
Interest capitalised (Note 14) 2.5 0.9
Unwinding of discount on contingent consideration (Note 26) (0.2) (1.4)
Impact of ineffective portion of cash flow and cost of hedging (Note 25) (1.1) (2.5)
(166.9) (173.6)
FINANCE INCOME
Bank interest receivable 23.2 0.7
Other interest receivable – 0.2
IAS 19 pension net finance income (Note 32) 13.6 3.6
36.8 4.5
TOTAL NET FINANCE COSTS (130.1) (169.1)
Net finance costs includes £165.6m (2021/22: £169.7m) finance costs and £23.2m (2021/22: £0.9m) finance income in
respect of financial assets and liabilities that are measured at amortised cost using the effective interest rate method.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
155
Strategic report Governance Financial statements Other information
156
9 GOVERNMENT GRANTS AND ASSISTANCE
During the year, the Group submitted its German Bridge Aid III Plus and IV claims, for which it received net cash of £17.3m.
These amounts were recognised in the 2021/22 year for costs the Group incurred from July 2021 to January 2022. No further
claims for COVID-related Government support were made in the UK or in Germany, and hence the Group has not recognised
any amounts for COVID-related Government support during this financial year. A provision being held in relation to any
potential repayments required in respect of the interpretations and assumptions made by Whitbread for UK Coronavirus Job
Retention Scheme claims was released during FY23 as management is satisfied that no repayments are required following
completion of an HMRC review. This has resulted in a credit to the consolidated income statement of £4.7m as shown below.
During the previous year, the Group had claimed Government support designed to mitigate the impact of COVID-19.
Grants recognised in the previous year and the provision released in the current year by type are shown below:
2022/23
£m
2021/22
£m
Release of provisions previously made relating to Government grant claims 4.7 –
UK Coronavirus Job Retention Scheme – 61.7
Ireland Employment Wage Subsidy Scheme – 0.2
Jersey Co-Funded Payroll Scheme – 0.1
UK Hospitality and Leisure Grant – 8.2
German Fixed Cost Grant – 43.3
German Kurzarbeit Scheme – compensation for social security payments – 0.3
INCLUDED IN OTHER INCOME 4.7 113.8
The Group benefited from the following schemes which led to savings in operating costs:
2022/23
£m
2021/22
£m
German Kurzarbeit Scheme – employees support – 0.7
UK Business Rate Relief – 56.3
REDUCTION IN OPERATING COSTS – 57.0
10 TAXATION
CONSOLIDATED INCOME STATEMENT
2022/23
£m
2021/22
£m
Current tax:
Current tax expense 35.3 –
Adjustments in respect of previous periods 0.7 (1.0)
36.0 (1.0)
Deferred tax:
Origination and reversal of temporary differences 51.5 16.5
Effect of in-year rate differential/change in tax rates 9.8 13.1
Adjustments in respect of previous periods (1.2) (12.9)
60.1 16.7
TAX REPORTED IN THE CONSOLIDATED INCOME STATEMENT 96.1 15.7
In relation to the previous year, the adjustments in respect of previous periods arose mainly due to a reassessment of
deferred tax on property, plant and equipment.
Whitbread Annual Report and Accounts 2022/23
156
Notes to the Consolidated Financial Statements continued
157
10 TAXATION CONTINUED
CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
2022/23
£m
2021/22
£m
Current tax:
Defined benefit pension scheme (0.7) 2.3
Deferred tax:
Cash flow hedges – 0.5
Tax on net (loss)/gain on hedge of a net investment (2.1) 0.8
Tax on exchange differences on translation of foreign operations 4.0 (2.7)
Defined benefit pension scheme (54.7) 88.0
(52.8) 86.6
TAX REPORTED IN OTHER COMPREHENSIVE INCOME (53.5) 88.9
A reconciliation of the tax expenses/(credit) applicable to adjusted profit/(loss) before tax and profit before tax at the
statutory tax rate, to the actual tax expense at the Group’s effective tax rate, for the years ended 2 March 2023 and 3 March
2022 respectively is set out below. All items have been tax effected at the UK statutory rate of 19%, with the exception of
the effect of unrecognised losses in overseas companies, which has been tax effected at the statutory rate in the relevant
jurisdictions with an adjustment to account for the differential tax rates included in the effect of different tax rates.
2022/23 2021/22
Tax on
adjusted
profit
£m
Tax on
profit
£m
Tax on
adjusted
loss
£m
Tax on
profit
£m
PROFIT/(LOSS) BEFORE TAX AS REPORTED IN THE CONSOLIDATED
INCOME STATEMENT 413.4 374.9 (15.8) 58.2
Tax at current UK tax rate of 19% (2021/22: 19%) 78.5 71.2 (3.0) 11.1
Effect of different tax rates (7.5) (11.5) (3.8) (3.8)
Unrecognised losses in overseas companies 19.5 29.4 11.8 11.8
Effect of super deduction in respect of tax relief for fixed assets (4.5) (4.5) (2.7) (2.7)
Expenditure not allowable 2.4 1.4 3.6 1.9
Adjustments to current tax expense in respect of previous years 0.7 0.7 (1.0) (1.0)
Adjustments to deferred tax expense in respect of previous years (1.2) (1.2) (13.8) (12.9)
Impact of deferred tax in respect of sale and lease transaction (Note 6) – 3.4 – –
Impact of deferred tax being at a different rate from current tax rate – 9.8 – 13.1
Other movements (2.7) (2.6) (1.8) (1.8)
TAX EXPENSE/(CREDIT) REPORTED IN THE CONSOLIDATED
INCOME STATEMENT 85.2 96.1 (10.7) 15.7
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
157
Strategic report Governance Financial statements Other information
158
10 TAXATION CONTINUED
Deferred tax
The major deferred tax (liabilities)/assets recognised by the Group and movement during the current and prior financial
years are as follows:
Accelerated
capital
allowances
£m
Rolled over
gains and
property
revaluations
£m
Pensions
£m
Leases
£m
Losses
£m
Other
3
£m
Total
£m
AT 25 FEBRUARY 2021 (44.2) (57.8) (62.5) 36.0 83.7 0.2 (44.6)
(Expense)/credit to consolidated
income statement (28.3) (34.7) (15.4) 12.6 53.7 (4.6) (16.7)
(Expense)/credit to statement of
comprehensive income – – (88.0) – 1.9 (0.5) (86.6)
Expense to statement of changes in equity – – – – – (0.3) (0.3)
Foreign exchange and other movements – – – 0.1 – (2.5) (2.4)
AT 3 MARCH 2022 (72.5) (92.5) (165.9) 48.7 139.3 (7.7) (150.6)
(Expense)/credit to consolidated
income statement
1
(14.7) (2.1) (5.2) (3.3) (39.9) 5.1 (60.1)
Credit/(expense) to statement of
comprehensive income
2
– – 54.7 – (1.9) – 52.8
Expense to statement of changes in equity – – – – – 0.1 0.1
Foreign exchange and other movements – 0.8 – (1.1) – (0.1) (0.4)
AT 2 MARCH 2023 (87.2) (93.8) (116.4) 44.3 97.5 (2.6) (158.2)
1 The total charge to the consolidated income statement of £60.1m (2022: £16.7m) relates largely to the utilisation of tax losses carried forward in the period £33.0m and
accelerated capital allowances arising from super deduction relief £15.0m (2022: comprises a rate change charge of £13.1m), these being the largest components of the
net charge.
2 The total credit to other comprehensive income of £52.8m (2022: charge of £86.6m) relates predominantly to a net deferred tax credit on defined benefit pension
scheme movements through other comprehensive income £54.7m (2022: charge of £88.0m).
3 The Other category includes a deferred tax liability of £12.5m (2022: £12.4m) in respect of capitalised interest and a deferred tax asset of £7.1m (2022: £4.0m) in
respect of share-based payments.
The Group recognises UK deferred tax assets to the extent that taxable profits will be available to utilise deductible
temporary differences or unused tax losses. At 2 March 2023, no UK deferred asset is unrecognised (2022: £nil).
The Group has unrecognised German tax losses of £199.9m (2022: £128.2m) which can be carried forward indefinitely and
offset against future taxable profits in the same tax group. The Group carries out an assessment of the recoverability of
these losses for each reporting period and, to the extent that they exceed deferred tax liabilities within the same tax group,
does not deem it is appropriate at this stage to recognise any deferred tax asset. Recognition of these assets in their entirety
would result in an increase in the reported deferred tax asset of £63.8m (2022: £40.9m). The impact on the effective tax rate
from the non-recognition of these assets in the current year is 6.1% (2022: 23.8%).
At 2 March 2023, no deferred asset is recognised (2022: £nil) on gross temporary differences of £11.1m (2022: £13.9m)
relating to the accumulated losses of other international subsidiaries as the Group is able to control the timings of the
reversal of these temporary differences and it is probable that they will not reverse in the foreseeable future.
Tax relief on total interest capitalised amounts to £0.5m (2021/22: £0.2m).
Factors affecting the tax charge for future years
The UK Budget 2021 announcement on 3 March 2021 included an increase to the UK’s main corporation tax rate to 25%,
effective from 1 April 2023. This was substantively enacted in May 2021 and remains the position at the signing of these
financial statements. As such, the Group continues to estimate that all UK deferred tax balances expected to be utilised or
crystallise after 1 April 2023 should be recognised at the rate of 25%.
Whitbread Annual Report and Accounts 2022/23
158
Notes to the Consolidated Financial Statements continued
159
11 EARNINGS PER SHARE
The basic earnings per share (EPS) figures are calculated by dividing the net profit/(loss) for the year attributable to ordinary
shareholders of the parent by the weighted average number of ordinary shares in issue during the year after deducting
treasury shares and shares held by an independently managed employee share ownership trust (ESOT).
The diluted earnings per share figures allow for the dilutive effect of the conversion into ordinary shares of the weighted
average number of options outstanding during the period. Where the average share price for the period is lower than the
option price, the options become anti-dilutive and are excluded from the calculation. There are 1.0m (2022: 0.7m) shares
options excluded from the diluted earnings per share calculation because they would be anti-dilutive.
The numbers of shares used for the earnings per share calculations are as follows:
2022/23
million
2021/22
million
Basic weighted average number of ordinary shares 201.5 201.9
Effect of dilution – share options 1.3 1.0
DILUTED WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES 202.8 202.9
The total number of shares in issue at the year-end, as used in the calculation of the basic weighted average number of
ordinary shares, was 214.6m, less 12.5m treasury shares held by Whitbread PLC and 1.2m held by the ESOT (2022: 214.5m,
less 12.5m treasury shares held by Whitbread PLC and 0.2m held by the ESOT).
The profits/(losses) used for the earnings per share calculations are as follows:
2022/23
£m
2021/22
£m
PROFIT FOR THE YEAR ATTRIBUTABLE TO PARENT SHAREHOLDERS 278.8 42.5
Adjusting items before tax (Note 6) 38.5 (74.0)
Adjusting tax expense (Note 6) 10.9 26.4
ADJUSTED PROFIT/(LOSS) FOR THE YEAR ATTRIBUTABLE TO PARENT SHAREHOLDERS 328.2 (5.1)
2022/23
pence
2021/22
pence
BASIC EPS ON PROFIT FOR THE YEAR 138.4 21.1
Adjusting items before tax 19.1 (36.7)
Adjusting tax expense 5.4 13.1
BASIC EPS ON ADJUSTED PROFIT/(LOSS) FOR THE YEAR 162.9 (2.5)
DILUTED EPS ON PROFIT FOR THE YEAR 137.5 20.9
DILUTED EPS ON ADJUSTED PROFIT/(LOSS) FOR THE YEAR 161.8 (2.5)
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
159
Strategic report Governance Financial statements Other information
160
12 DIVIDENDS PAID AND PROPOSED
2022/23 2021/22
pence per
share £m
pence per
share £m
Final dividend, proposed and paid, relating to the prior year 34.70 70.1 – –
Interim dividend, proposed and paid, for the current year 24.40 49.0 – –
TOTAL EQUITY DIVIDENDS PAID IN THE YEAR 119.1 –
Dividends on other shares:
B share dividend – – 0.30 –
C share dividend 1.00 – – –
–
TOTAL DIVIDENDS PAID 119.1 –
Proposed for approval at annual general meeting:
Final equity dividend for the current year 49.80 100.0 34.70 70.0
A final dividend of 49.80p per share amounting to a dividend of £100.0m was recommended by the directors at their
meeting on 24 April 2023. A dividend reinvestment plan (DRIP) alternative will be offered. The proposed final dividend
is subject to approval by shareholders at the annual general meeting and has not been included as a liability in these
consolidated financial statements.
13 INTANGIBLE ASSETS
Goodwill
£m
IT software
and
technology
£m
Total
£m
COST
At 25 February 2021 350.1 110.0 460.1
Additions – 21.1 21.1
Assets written off – (10.8) (10.8)
Foreign currency translation – (0.1) (0.1)
AT 3 MARCH 2022 350.1 120.2 470.3
Additions – 36.8 36.8
Assets written off – (10.5) (10.5)
Foreign currency translation – 0.2 0.2
AT 2 MARCH 2023 350.1 146.7 496.8
AMORTISATION AND IMPAIRMENT
At 25 February 2021 (239.6) (61.4) (301.0)
Amortisation during the year – (20.9) (20.9)
Amortisation on assets written off – 10.8 10.8
Foreign currency translation – 0.1 0.1
AT 3 MARCH 2022 (239.6) (71.4) (311.0)
Amortisation during the year – (16.5) (16.5)
Amortisation on assets written off – 10.5 10.5
Foreign currency translation – (0.2) (0.2)
AT 2 MARCH 2023 (239.6) (77.6) (317.2)
NET BOOK VALUE AT 2 MARCH 2023 110.5 69.1 179.6
NET BOOK VALUE AT 3 MARCH 2022 110.5 48.8 159.3
Other than goodwill, there are no intangible assets with indefinite lives. IT software and technology assets, which are made
up entirely of internally generated assets, have been assessed as having finite lives and are amortised under the straight-line
method over periods ranging from three to ten years from the date the asset became fully operational.
Note 15 contains details of the impairment review conducted on goodwill as at the year-end date.
Capital expenditure commitments
Capital expenditure commitments in relation to intangible assets at the year-end amounted to £7.7m (2022: £7.3m).
Whitbread Annual Report and Accounts 2022/23
160
Notes to the Consolidated Financial Statements continued
161
14 PROPERTY, PLANT AND EQUIPMENT AND INVESTMENT PROPERTY
Land and
buildings
£m
Plant and
equipment
£m
Total
property,
plant and
equipment
£m
Investment
property
£m
Total
£m
COST
At 25 February 2021 3,640.6 1,517.6 5,158.2 21.8 5,180.0
Additions 92.0 128.0 220.0 – 220.0
Interest capitalised 0.9 – 0.9 – 0.9
Net movements to assets held for sale in the year (62.2) (4.5) (66.7) – (66.7)
Disposals (8.8) – (8.8) – (8.8)
Assets written off (4.1) (57.9) (62.0) – (62.0)
Transfers 21.4 – 21.4 (21.4) –
Foreign currency translation (17.8) (2.5) (20.3) (0.4) (20.7)
AT 3 MARCH 2022 3,662.0 1,580.7 5,242.7 – 5,242.7
Additions 295.7 208.4 504.1 – 504.1
Interest capitalised 2.5 – 2.5 – 2.5
Net movements from assets held for sale in the year 6.1 3.8 9.9 – 9.9
Disposals (7.0) (2.0) (9.0) – (9.0)
Assets written off (3.9) (73.7) (77.6) – (77.6)
Asset reclassified from right-of-use asset (3.3) – (3.3) – (3.3)
Foreign currency translation 30.4 4.5 34.9 – 34.9
AT 2 MARCH 2023 3,982.5 1,721.7 5,704.2 – 5,704.2
DEPRECIATION AND IMPAIRMENT
At 25 February 2021 (287.3) (657.8) (945.1) (0.2) (945.3)
Depreciation charge for the year (22.9) (135.0) (1 57.9) – (1 57.9)
Net impairment reversal/(charge) (Note 15) 16.9 (2.4) 14.5 – 14.5
Net movements to assets held for sale in the year 7.3 2.4 9.7 – 9.7
Disposals 0.6 – 0.6 – 0.6
Depreciation on assets written off 4.1 57.9 62.0 – 62.0
Transfers (0.2) – (0.2) 0.2 –
Foreign currency translation 0.1 0.7 0.8 – 0.8
AT 3 MARCH 2022 (281.4) (734.2) (1,015.6) – (1,015.6)
Depreciation charge for the year (23.5) (139.7) (163.2) – (163.2)
Net impairment charge (Note 15) (26.4) (15.5) (41.9) – (41.9)
Net movements from assets held for sale in the year (6.1) (1.8) (7.9) – (7.9)
Disposals 2.2 2.0 4.2 – 4.2
Depreciation on assets written off 3.9 72.1 76.0 – 76.0
Foreign currency translation (0.4) (1.2) (1.6) – (1.6)
AT 2 MARCH 2023 (331.7) (818.3) (1,150.0) – (1,150.0)
NET BOOK VALUE AT 2 MARCH 2023 3,650.8 903.4 4,554.2 – 4,554.2
NET BOOK VALUE AT 3 MARCH 2022 3,380.6 846.5 4,227.1 – 4,227.1
Included above are assets under construction of £426.9m (2022: £260.5m).
There is a charge in favour of the pension scheme over properties with a market value of £531.5m (2022: £531.5m).
See Note 32 for further information.
Amounts relating to right-of-use assets under IFRS 16 are detailed in Note 22.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
161
Strategic report Governance Financial statements Other information
162
14 PROPERTY, PLANT AND EQUIPMENT AND INVESTMENT PROPERTY CONTINUED
Investment property
During 2019/20, the Group acquired a freehold site which was leased to a third party and was recorded within investment
property. The Group recognised rental income of £nil (2021/22: £0.2m) within other income and £nil (2021/22: £0.1m) of
direct operating expenses in relation to this property. During 2021/22, the property was transferred to property, plant and
equipment as the lease ended and the Group took over the operations of the hotel.
CAPITAL EXPENDITURE COMMITMENTS
2023
£m
2022
£m
Capital expenditure commitments for property, plant and equipment
for which no provision has been made 125.4 106.4
Capitalised interest
Interest capitalised during the year amounted to £2.5m, using an average rate of 2.5% (2021/22: £0.9m, using an average
rate of 2.7%).
Assets held for sale
During the year, eight property assets with a combined net book value of £5.2m (2021/22: four at £57.0m) were transferred
to assets held for sale. Seven property assets with a combined net book value of £7.9m were transferred back to property,
plant and equipment (2021/22: no properties). Seven property assets sold during the year had a net book value of £57.5m
(2021/22: seven at £11.2m). An impairment loss of £1.4m (2021/22: £nil) was recognised relating to assets classified as held
for sale. By the year-end, there were five sites with a combined net book value of £3.2m (2022: eleven at £64.8m) classified
as assets held for sale. There are no gains or losses recognised in other comprehensive income with respect to these assets.
Sites are classified as held for sale only if they are available for immediate sale in their present condition and a sale is highly
probable and expected to be completed within one year from the date of classification. If the site does not meet these
criteria, it is subsequently transferred back to property, plant and equipment.
Included within assets held for sale are assets which were written down to fair value less costs to sell of £1.5m
(2022: £15.4m). The fair value of property assets was determined based on current prices in an active market for similar
properties. Where such information is not available, management considers information from a variety of sources including
current prices for properties of a different nature or recent prices of similar properties, adjusted to reflect those differences.
This is a level 3 measurement as per the fair value hierarchy set out in Note 25. The key inputs under this approach are the
property size and location.
15 IMPAIRMENT
During the year, net impairment charges of £33.4m (2021/22: net impairment reversals of £36.2m) were recognised within
operating costs. The increase in market interest rates has driven higher discount rates and has increased impairments in the
UK and Germany. Gross impairment charges in the UK of £45.6m, impacted 13 standalone restaurants and those sites where
F&B revenues represent a more significant proportion of total sales. The WACC increase resulted in further impairment
charges of £8.6m which was offset by impairment reversals of £54.9m as the Group recovered from the COVID-19 pandemic
and sites returned to a more normal level of trading. This resulted in a total net impairment reversal of £0.7m being recorded
in the UK. In Germany, the pace of expansion and a number of portfolio acquisitions where there is a distribution of
performance, which when combined with an increase in market discount rates, has resulted in a £30.8m impairment charge.
In addition, impairment charges of £3.3m (2021/22: impairment charges of £5.8m) have been recorded in relation to assets
held for sale during the year. The charges/(reversals) were recognised on the following classes of assets:
2022/23
£m
2021/22
£m
IMPAIRMENT CHARGES/(REVERSALS) INCLUDED IN OPERATING COSTS
Property, plant and equipment – impairment charges 76.1 10.1
Property, plant and equipment – impairment reversals (35.5) (30.4)
Property, plant and equipment – transfer to assets held for sale 1.3 5.8
Right-of-use assets – impairment charges 8.9 0.4
Right-of-use assets – impairment reversals (19.4) (22.1)
Assets held for sale 2.0 –
TOTAL CHARGES/(REVERSALS) FOR IMPAIRMENT INCLUDED IN OPERATING COSTS 33.4 (36.2)
All of the impairment assessments take account of expected market conditions, which include future risks including climate
change and related legislation.
Whitbread Annual Report and Accounts 2022/23
162
Notes to the Consolidated Financial Statements continued
163
15 IMPAIRMENT CONTINUED
Property, plant and equipment and right-of-use assets – impairment review
Where indicators of impairment are identified, an impairment assessment is undertaken. The Group considers each trading
site to be a CGU. A trading site will offer a combination of accommodation and food and beverage services. Some trading
sites provide food and beverage services only. In assessing whether an asset has been impaired, the carrying amount of
the CGU is compared with its recoverable amount. The recoverable amount is the higher of its value in use (VIU) and its fair
value less costs of disposal (FVLCD).
The Group calculates a VIU for each site. Where the VIU is lower than the carrying value of the CGU, the Group uses a range
of methods for estimating the FVLCD. These include applying a market multiple to the CGU EBITDAR and, for leasehold
sites, present value techniques using a discounted cash flow method. Both FVLCD methods rely on inputs not normally
observable by market participants and are therefore level 3 measurements in the fair value hierarchy.
The key assumptions used by management in estimating value in use were:
Discount rates
The discount rate is based on the Weighted Average Cost of Capital (WACC) of a typical market participant, taking into
account specific country and currency risks associated with the Group. The discount rate has increased, reflecting market
volatility in the spot risk-free rate and equity risk premium inputs used in the Group’s WACC calculation.
2022/23 2021/22
UK Germany UK Germany
Average pre-tax discount rate 11.1% 9.9% 8.7% 7.3%
Average post-tax discount rate 8.9% 7.5% 7.0% 5.6%
Approved budget period
Forecast cash flows for the initial five-year period are based on actual cash flows for FY23 and applying management’s
assumptions of the performance of the Group over the next five years.
The key assumptions used by management in setting the Board approved financial budgets for the initial five-year period
were as follows:
• Forecast period cash flows: The initial five-year period’s cash flows are drawn from the five-year business plan, which is
based on results from FY23.
• Forecast growth rates: Forecast growth rates are based on the Group business plan, which includes assumptions around
the UK and German economies over the next five years.
• Operating profits are forecast based on historical experience of operating margins, adjusted for the impact of inflation
and cost-saving initiatives.
• Local factors impacting the site in the current year or expected to impact the site in future years: Key assumptions
include the maturity profile of individual sites, the future potential of immature sites and the impact of increasing or
reducing market supply in the local area.
Long-term growth rates
A long-term growth rate of 2.0% (2022: 2.0%) was used for cash flows subsequent to the five-year approved budget/plan
period. This long-term growth rate is a conservative rate and is considered to be lower than the long-term historical growth
rates of the underlying territories in which the CGUs operate and the long-term growth rate prospects of the sectors in
which the CGUs operate.
The key assumptions used by management in estimating the FVLCD were:
EBITDAR multiple
An EBITDAR multiple is estimated based on a normalised trading basis and market data obtained from external sources.
This resulted in a multiple in the range of 7 to 11 times.
Discounted cash flows
The key assumptions used by management in estimating the FVLCD on a discounted cash flow method were similar to those
used in the value in use assessment, modified to reflect estimated cost of disposal and lease payments. The inclusion of lease
payments is reflected in the discount rate, increasing WACC for the specific asset class from 11.1% to 12.3% in the UK and from
9.9% to 11.0% in Germany.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
163
Strategic report Governance Financial statements Other information
164
15 IMPAIRMENT CONTINUED
Sensitivity to changes in assumptions
The level of impairment is predominantly dependent upon judgements used in arriving at future growth rates and the
discount rates applied to cash flow projections. The impact on the impairment charge of applying a reasonably possible
change in assumptions to the growth rates used in the five-year business plan, long-term growth rates, pre-tax discount
rates and EBITDAR multiple would be an incremental impairment charge/(reversal) in the year to 2 March 2023 of:
INCREMENTAL IMPAIRMENT CHARGE/(REVERSAL)
Total
£m
Increase to impairment charge/(reversal) if year one’s cash flows reduced by 10% 2.0
Increase to impairment charge/(reversal) if discount rates increased by 2% 14.5
Increase to impairment charge/(reversal) if long-term growth rates reduced by 1% 9.0
Increase to impairment charge/(reversal) if EBITDAR multiple reduced by 10% 14.1
Decrease to impairment charge/(reversal) if year one’s cash flows increased by 10% (2.9)
Decrease to impairment charge/(reversal) if discount rates decreased by 2% (29.3)
The above sensitivity analyses are based on a change in an assumption whilst holding all other assumptions constant.
In practice, this is unlikely to occur and changes in some of the assumptions may be correlated.
The impairment sensitivities above show the downside risk from a reasonably possible change in the modelled assumptions
and are in line with disclosure requirements.
Goodwill
Goodwill acquired through business combinations is allocated to groups of CGUs at an operating segment level, being the
level at which management monitors goodwill. All of the Group’s goodwill is allocated to the UK and Ireland segment.
The recoverable amount is the higher of fair value less costs of disposal and value in use using the same assumptions as
those used in the site level impairment reviews. The recoverable amount has been determined from value in use calculations.
The future cash flows are based on assumptions from the approved budget and cover a five-year period. These forecasts
include management’s most recent view of medium-term trading prospects. Cash flows beyond this period are extrapolated
using a 2.0% (2022: 2.0%) growth rate. The pre-tax discount rate applied to cash flow projections is 11.1% for the UK
(2022: 8.7%).
As a result of the German goodwill being impaired in previous years and the level of headroom within the UK segment, there
is no reasonably possible change that could result in a further material impairment of goodwill.
Investments in joint ventures
Changes in consumer behaviour following the COVID-19 pandemic continue to have a significant impact on trading and
future forecasts for trading at one of the Group’s joint ventures. Additional loan funding of £1.5m has been provided to
Healthy Retail Limited in the year to 2 March 2023 and subsequently impaired. See Note 16.
Property, plant and equipment – assets held for sale
During the period, eight hotels were transferred to assets held for sale, resulting in an impairment charge of £1.3m (2021/22:
four hotels resulting in an impairment charge of £5.8m). In addition, during 2022/23, an impairment charge of £2.0m
(2021/22: £nil) was recorded in relation to assets which had previously been classified as held for sale as a result of a
reduction in expected sales proceeds.
Whitbread Annual Report and Accounts 2022/23
164
Notes to the Consolidated Financial Statements continued
165
16 INVESTMENT IN JOINT VENTURES
Premier Inn Hotels LLC
The Group holds a 49% interest in Premier Inn Hotels LLC, a joint venture which operates Premier Inn branded hotels in the
United Arab Emirates. The investment forms part of the Group’s international growth strategy.
Premier Inn Hotels LLC holds a 49% investment in Premier Inn Qatar Limited. During the year, the Group subscribed for share
capital of £nil (2021/22: £1.4m).
Healthy Retail Limited
The Group holds a 49% interest in Healthy Retail Limited, a joint venture which operates a chain of 19 stores in London
trading as ‘Pure’, that specialises in fresh, natural healthy meals. Changes in consumer behaviour following the COVID-19
pandemic continue to have a significant impact on the company’s trading and on 7 October 2020 Healthy Retail Limited
entered into a Creditor’s Voluntary Agreement (CVA). Pure has also obtained a Coronavirus Business Interruption Loan
Scheme facility from Lloyds which is in priority to the Group’s security over loans advanced to the joint venture. The Group
has impaired its investments and loans made to Healthy Retail Limited in full, resulting in a charge of £1.5m (2021/22: £1.8m).
The Group has an option to purchase the remaining 51% interest which expires on 30 June 2024. The Group continues to
account for the investment as a joint venture on the basis that the majority shareholders have an equal representation on
the investee’s board of directors, which has control over the relevant activities of the business, and the potential voting rights
under the option to purchase are not considered to be substantive.
Premier Inn Kier Limited
The Group holds a 50% investment in this dormant UK entity.
Movement in investment in joint ventures
2023
£m
2022
£m
Opening investment in joint ventures 41.1 37.3
Share of profit for the year 2.3 0.4
Foreign exchange movements 4.8 2.0
Loans advanced 1.5 1.8
Impairment
1
(1.5) (1.8)
Capital contribution – 1.4
CLOSING INVESTMENT IN JOINT VENTURES 48.2 41.1
1 Includes an impairment of loans advanced to joint ventures of £1.5m (2021/22: £1.8m) determined under IFRS 9.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
165
Strategic report Governance Financial statements Other information
166
16 INVESTMENT IN JOINT VENTURES CONTINUED
2023 2022
Premier Inn
Hotels LLC
£m
Healthy
Retail
Limited
£m
Total
£m
Premier Inn
Hotels LLC
£m
Healthy
Retail
Limited
£m
Total
£m
SUMMARY OF JOINT VENTURES’ BALANCE SHEETS
Current assets 15.6 1.9 17.5 9.1 2.0 11.1
Non-current assets 154.1 16.1 170.2 141.2 20.2 161.4
Current liabilities (16.0) (18.3) (34.3) (10.4) (15.9) (26.3)
Non-current liabilities (55.2) (13.2) (68.4) (56.0) (16.1) (72.1)
NET ASSETS 98.5 (13.5) 85.0 83.9 (9.8) 74.1
Group’s share of interest in joint ventures’ net assets 48.2 (6.6) 41.6 41.1 (4.9) 36.2
Premium paid on acquisition – 4.5 4.5 – 4.5 4.5
Loans to joint ventures – 9.0 9.0 – 7.5 7.5
Accumulated impairment – (6.9) (6.9) – (7.1) ( 7.1)
GROUP’S CARRYING AMOUNT OF THE INVESTMENT 48.2 – 48.2 41.1 – 41.1
WITHIN GROSS BALANCE SHEETS
Cash and cash equivalents 12.5 0.9 13.4 6.9 1.6 8.5
Current financial liabilities (7.5) (14.9) (22.4) (4.6) (13.1) (17.7)
Non-current financial liabilities (55.2) (13.2) (68.4) (56.0) (16.1) (72.1)
SUMMARY OF JOINT VENTURES’ INCOME
STATEMENT
Revenue 28.6 20.9 49.5 18.2 11.8 30.0
Other income – – – – 0.3 0.3
Depreciation and amortisation (4.8) (4.8) (9.6) (4.6) (4.2) (8.8)
Other operating costs (16.2) (19.0) (35.2) (10.9) (10.5) (21.4)
Finance costs (2.9) (1.5) (4.4) (2.0) (1.3) (3.3)
PROFIT/(LOSS) BEFORE TAX 4.7 (4.4) 0.3 0.7 (3.9) (3.2)
Income tax – – – – – –
PROFIT/(LOSS) AFTER TAX 4.7 (4.4) 0.3 0.7 (3.9) (3.2)
GROUP SHARE
Profit after tax
1
2.3 – 2.3 0.4 – 0.4
1 The Group’s share of loss after tax of Healthy Retail Limited has been recognised only to the extent that its share of losses equals its interest in the joint venture,
following the impairment recorded during the prior year.
At 2 March 2023, the Group’s share of the capital commitments of its joint ventures amounted to £0.1m (2022: £0.1m).
17 INVENTORIES
2023
£m
2022
£m
Finished goods held for resale 15.5 15.0
Consumables 6.2 4.4
21.7 19.4
The carrying value of inventories is stated net of a provision of £3.2m (2022: £2.5m).
Whitbread Annual Report and Accounts 2022/23
166
Notes to the Consolidated Financial Statements continued
167
18 TRADE AND OTHER RECEIVABLES
2023
£m
2022
£m
Trade receivables 46.0 45.5
Prepayments and accrued income 49.8 24.2
Other receivables 46.0 46.7
141.8 116.4
Analysed as:
Current 141.8 116.4
Non-current – –
141.8 116.4
Trade and other receivables are non-interest bearing and are generally on 30-day terms. Trade receivables includes £45.1m
(2022: £44.2m) relating to contracts with customers.
The allowance for expected credit loss relating to trade and other receivables at 2 March 2023 was £1.7m (2022: £2.0m).
During the year, credit losses of £1.2m (2021/22: £2.7m) were recognised within operating costs in the consolidated
income statement.
19 CASH AND CASH EQUIVALENTS
2023
£m
2022
£m
Cash at bank and in hand 60.2 43.5
Money market funds 769.6 757.3
Short-term deposits 335.0 331.6
1,164.8 1,132.4
Short-term deposits are made for varying periods of between one day and three months depending on the immediate cash
requirements of the Group. They earn interest at the respective short-term deposit rates.
The Group does not have material cash balances which are subject to contractual or regulatory restrictions.
For the purposes of the consolidated cash flow statement, cash and cash equivalents comprise the amounts as
disclosed above.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
167
Strategic report Governance Financial statements Other information
168
20 BORROWINGS
Amounts drawn down on the Group’s borrowing facilities are as follows:
Current Non-current
2023
£m
2022
£m
2023
£m
2022
£m
Revolving credit facility – – – –
Senior unsecured bonds – – 993.4 991.9
– – 993.4 991.9
Revolving credit facility and covenant
The revolving credit facility, which at 3 March 2022 was £850.0m, was replaced on 25 May 2022 with a new five-year
£775.0m multi-currency revolving credit facility agreement. The new revolving credit facility agreement contains one
financial covenant ratio, being net debt/adjusted EBITDA <3.5x.
At 2 March 2023, the Group had available £775.0m (2022: £850.0m) of undrawn committed borrowing facilities in respect of
revolving credit facilities on which all conditions precedent had been met.
Senior unsecured bonds
The Group has issued senior unsecured bonds with coupons and maturities as shown in the following table:
Title Year issued Principal value Maturity Coupon
2025 senior unsecured bonds 2015 £450.0m 16 October 2025 3.375%
2027 senior unsecured green use of proceeds bonds 2021 £300.0m 31 May 2027 2.375%
2031 senior unsecured green use of proceeds bonds 2021 £250.0m 31 May 2031 3.000%
Amortised arrangement fees of £2.6m (2022: £3.4m) incurred in relation to the bonds are included in the carrying value and
are being amortised over the term of the bonds. The bonds contain an early prepayment option which meets the definition
of an embedded derivative.
Whitbread Annual Report and Accounts 2022/23
168
Notes to the Consolidated Financial Statements continued
169
21 MOVEMENTS IN CASH AND NET DEBT
YEAR ENDED
2 MARCH 2023
3 March
2022
£m
Cash flow
£m
Net new
lease
liabilities
£m
Foreign
exchange
£m
Fair value
adjustments
to loans
£m
Amortisation
of premiums
and
discounts
£m
2 March
2023
£m
Cash and cash equivalents 1,132.4 30.5 – 1.9 – – 1,164.8
LIABILITIES FROM FINANCING
ACTIVITIES
Borrowings (991.9) – – – – (1.5) (993.4)
Lease liabilities (3,701.8) 133.9 (346.1) (44.4) – – (3,958.4)
Total liabilities from financing activities (4,693.7) 133.9 (346.1) (44.4) – (1.5) (4,951.8)
Less: lease liabilities 3,701.8 (133.9) 346.1 44.4 – – 3,958.4
NET CASH 140.5 30.5 – 1.9 – (1.5) 171.4
YEAR ENDED
3 MARCH 2022
25 February
2021
£m
Cash flow
£m
Net new
lease
liabilities
£m
Foreign
exchange
£m
Fair value
adjustments
to loans
£m
Amortisation
of premiums
and
discounts
£m
3 March
2022
£m
Cash and cash equivalents 1,256.0 (123.0) – (0.6) – – 1,132.4
LIABILITIES FROM FINANCING
ACTIVITIES
Borrowings (1,302.5) 303.9 – 8.1 – (1.4) (991.9)
Lease liabilities (3,231.6) 1 27.1 (619.4) 22.1 – – (3,701.8)
Derivatives held to hedge financing
activities 5.8 – – – (5.8) – 0.0
Total liabilities from financing activities (4,528.3) 431.0 (619.4) 30.2 (5.8) (1.4) (4,693.7)
Less: lease liabilities 3,231.6 (1 27.1) 619.4 (22.1) – – 3,701.8
Less: derivatives held to hedge financing
activities (5.8) – – – 5.8 – –
NET (DEBT)/CASH (46.5) 180.9 – 7.5 – (1.4) 140.5
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
169
Strategic report Governance Financial statements Other information
170
22 LEASE ARRANGEMENTS
The Group leases various buildings which are used within the Premier Inn business. The leases are non-cancellable leases
with varying terms, escalation clauses and renewal rights, and include variable payments that are not fixed in amount
but based upon a percentage of sales. The Group also leases various plant and equipment under non-cancellable
lease agreements.
An analysis of the Group’s right-of-use assets and lease liabilities is as follows:
RIGHT-OF-USE ASSETS
Property
£m
Other
£m
Total
right-of-use
assets
£m
Investment
property
1
£m
Total
£m
At 25 February 2021 2,736.7 1.7 2,738.4 65.0 2,803.4
Additions 612.9 0.8 613.7 – 613.7
Net Impairment reversal (Note 15) 21.7 – 21.7 – 21.7
Foreign currency translation (22.9) – (22.9) – (22.9)
Depreciation (144.0) (1.1) (145.1) (3.0) (148.1)
Terminations (0.2) – (0.2) – (0.2)
Transfers 62.0 – 62.0 (62.0) –
AT 3 MARCH 2022 3,266.2 1.4 3,267.6 – 3,267.6
Additions 368.8 1.2 370.0 – 370.0
Net Impairment reversal (Note 15) 10.5 – 10.5 – 10.5
Foreign currency translation 45.4 – 45.4 – 45.4
Depreciation (164.8) (1.0) (165.8) – (165.8)
Terminations (1.2) – (1.2) – (1.2)
Reclassification to property, plant and equipment
2
(21.9) – (21.9) – (21.9)
AT 2 MARCH 2023 3,503.0 1.6 3,504.6 – 3,504.6
LEASE LIABILITIES
Property
£m
Other
£m
Total
right-of-use
assets
£m
Investment
property
1
£m
Total
£m
At 25 February 2021 3,164.2 1.4 3,165.6 66.0 3,231.6
Additions 618.8 0.8 619.6 – 619.6
Interest 132.0 0.1 132.1 1.1 133.2
Foreign currency translation (22.1) – (22.1) – (22.1)
Payments (255.9) (0.8) (256.7) (3.6) (260.3)
Terminations (0.2) – (0.2) – (0.2)
Transfers 63.5 – 63.5 (63.5) –
AT 3 MARCH 2022 3,700.3 1.5 3,701.8 – 3,701.8
Additions 371.6 1.2 372.8 – 372.8
Interest 138.7 – 138.7 – 138.7
Foreign currency translation 44.4 – 44.4 – 44.4
Payments (271.3) (1.3) (272.6) – (272.6)
Terminations (1.5) – (1.5) – (1.5)
Reclassification to property, plant and equipment
2
(25.2) – (25.2) – (25.2)
AT 2 MARCH 2023 3,957.0 1.4 3,958.4 – 3,958.4
1 During 2020/21, the Group acquired a leasehold site which was sub-leased to a third party and recorded within investment property. During 2021/22, the property was
transferred to right-of-use assets for property, plant and equipment as the sub-lease ended and the Group took over the operations of the hotel.
2 During the year, the Group acquired a property over which it had previously held a leasehold interest.
During the year, the Group had non-cash additions to right-of-use assets and lease liabilities of £292.0m (2021/22: £583.3m)
relating to new leases and £80.8m (2021/22: £34.3m) relating to amendments to existing leases. The Group recognised net
lease incentives of £2.8m (2021/22: £2.0m) on entering new and amended leases.
A maturity analysis of gross lease liability payments is included within Note 24.
Whitbread Annual Report and Accounts 2022/23
170
Notes to the Consolidated Financial Statements continued
171
22 LEASE ARRANGEMENTS CONTINUED
Amounts recognised in the Group income statement
2022/23
£m
2021/22
£m
Depreciation expense of right-of-use assets 165.8 148.1
Interest expense on lease liabilities 138.7 133.2
Expense relating to low-value assets and short-term leases – –
Variable lease payment expenses 2.1 0.3
Impairment reversals of right-of-use assets (Note 15) (10.5) (21.7)
Lease income (3.1) (7.9)
NET LEASE EXPENSE RECOGNISED IN THE CONSOLIDATED INCOME STATEMENT 293.0 252.0
Amounts recognised in the Group cash flow statement
The Group’s total cash outflow in relation to leases was £277.4m (2021/22: £260.6m).
Future possible cash outflows not included in the lease liability
The Group has several lease contracts that include extension and termination options. Set out below are the undiscounted
future rental payments relating to periods following the exercise date of extension and termination options that are not
included in the lease liability.
2022/23
£m
2021/22
£m
Extension options expected not to be exercised 1,246.4 906.6
Termination options expected to be exercised – –
1,246.4 906.6
The Group uses judgement in determining whether termination and extension option periods will be included within
the lease term. The Group assumes that, unless a decision has been made to exit a lease, termination options will not be
exercised as a result of historic practices within the Group. At the outset of a lease, the Group assumes that it will not
exercise extension options. Due to the length of the Group’s leases, there is generally insufficient evidence that exercising an
extension option is certain.
Future increases or decreases in rentals linked to an index or rate are not included in the lease liability until the change in
cash flows takes effect. Approximately 76% of the Group’s lease liabilities are subject to inflation-linked rentals (with 76% of
these leases containing caps) and a further 10% which are subject to rent reviews. Rental changes linked to inflation or rent
reviews typically occur on an annual or five-yearly basis.
As at 2 March 2023, the Group was committed to leases with future cash outflows totalling £1,799.7m (2022: £2,106.7m)
which had not yet commenced and as such are not accounted for as a liability. A liability and corresponding right-of-use
asset will be recognised for these leases at the lease commencement date.
The Group as a lessor
The Group acts as a lessor in relation to a number of non-trading legacy sites and in subletting space within trading sites.
Rental income recognised by the Group during the year is £3.1m (2021/22: £7.9m). Future minimum rentals receivable under
non-cancellable operating leases at the year-end are as follows:
2023
£m
2022
£m
Within one year 2.4 2.9
After one year but not more than five years 6.0 5.2
More than five years 8.3 6.4
16.7 14.5
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
171
Strategic report Governance Financial statements Other information
172
23 PROVISIONS
Restructuring
£m
Onerous
contracts
£m
Property
costs
£m
Insurance
claims
£m
Government
payments
£m
Other
£m
Total
£m
At 25 February 2021 1.1 10.1 15.7 7.2 3.6 1.8 39.5
Created 0.4 0.9 – 3.0 11.8 – 16.1
Utilised (0.8) (5.3) (9.1) (2.0) (3.8) – (21.0)
Released (0.3) (0.7) – – (2.3) – (3.3)
AT 3 MARCH 2022 0.4 5.0 6.6 8.2 9.3 1.8 31.3
Created – 2.0 – 2.8 – 0.8 5.6
Transferred – – – – 2.3 – 2.3
Utilised – (1.4) (1.0) (2.3) (0.1) (0.1) (4.9)
Released (0.4) (0.9) – – (4.7) – (6.0)
Foreign exchange – – – – 0.2 – 0.2
AT 2 MARCH 2023 – 4.7 5.6 8.7 7.0 2.5 28.5
Analysed as:
Current – 4.7 5.6 0.4 7.0 2.5 20.2
Non-current – – – 8.3 – – 8.3
AT 2 MARCH 2023 – 4.7 5.6 8.7 7.0 2.5 28.5
Analysed as:
Current 0.4 2.5 5.2 0.4 9.3 1.8 19.6
Non-current – 2.5 1.4 7.8 – – 11.7
AT 3 MARCH 2022 0.4 5.0 6.6 8.2 9.3 1.8 31.3
Restructuring
A provision of £0.4m was brought forward in relation to the restructure of the Group’s Support Centre and site operations.
During the year, the Group released the remaining provision to the income statement.
Onerous contracts
Onerous contract provisions relate primarily to property, software licences and supplier contracts where the contracts have
become onerous. Provision is made for property-related costs for the period that a sublet or assignment of the lease is
not possible.
Onerous contract provisions are discounted using a discount rate of 2.0% (2022: 2.0%) based on an approximation for the
time value of money.
Property-related
The amount and timing of the cash outflows are subject to variation. The Group utilises the skills and expertise of both
internal and external property experts to determine the provision held. Provisions are expected to be utilised over a period of
up to 12 years and £0.2m has been utilised in the year.
Software
Certain software licence agreements were deemed to be onerous when, following the disposal of Costa, it was no longer
beneficial to the Group to use the software. In addition, a provision was created in FY20 as a result of the cancellation of a
contract relating to the supply of IT equipment. A provision of £0.8m was brought forward in relation to these contracts.
During the year, the Group utilised £0.3m (2022: £0.4m) of this provision, with the provision carried forward to be utilised
over a two-year period. The software intangible assets associated with these contracts have been fully impaired in previous
financial years.
Supplier contracts
Certain supplier contract arrangements were deemed to be onerous where, as a result of the reduced trading brought on
by the COVID-19 pandemic restrictions, minimum order commitments were not going to be met. A provision of £1.1m was
brought forward in relation to these contracts. During the year, the Group utilised £0.9m of the provision and created a
further £0.2m of provision.
Whitbread Annual Report and Accounts 2022/23
172
Notes to the Consolidated Financial Statements continued
173
23 PROVISIONS CONTINUED
Property costs
From FY18 to FY20, the Group established a provision for the performance of remedial works on cladding material at a small
number of the Group’s sites. As a result, a provision of £6.6m is brought forward in relation to these costs. During the year,
£1.0m of the provision has been utilised. All of the remaining provision is expected to be utilised within one year.
Insurance
A provision of £8.2m was brought forward in relation to the estimate of the cost of future claims against the Group from
employees and the public. The claims covered typically relate to accidents and injuries sustained in Whitbread’s sites.
During the year, further provisions of £2.8m were created and £2.3m of the provision was utilised.
Government payments
The Group has made various claims for Government support which are subject to review by the relevant agencies.
The provision recognised represented the Group’s best estimate of amounts potentially repayable under previously
submitted claims, and for potential historical indirect tax repayments. A provision of £9.3m was brought forward in relation
to these claims. During the year, on confirmation of receipt for grants recognised in the previous financial year for costs
related to that year the accrued provision against the other receivable of £2.3m was transferred into provisions, £0.1m of
the provision was utilised with £4.7m of the provision released. Due to the complex nature and fast pace of changes in
the rules around certain Government payments, the Group has always endeavoured to apply and adhere to the rules in
place. In certain areas where a rule interpretation was required, the Group has claimed in accordance with its assumptions.
Subsequent third-party review had highlighted that an alternative assumption could be formed and, on the basis of a
probable outflow, a provision based on that approach has been made. As disclosed within Note 9, during the year, a
provision being held in relation to any potential repayments required in respect of the interpretations and assumptions
made by Whitbread for UK Coronavirus Job Retention Scheme claims was released as management is satisfied that no
repayments are required following an HMRC review.
Other
In July 2016, the Group announced its intention to exit hotel operations in South East Asia. This resulted in the recognition
of a provision of £3.7m for risks arising from tax affairs and indemnity agreements. At 2 March 2023, £0.1m of the provision
had been utilised in the year, with £1.7m of the provision still held for risks arising from indemnity agreements. The remaining
costs are expected to be utilised within one year.
The Group operates leases where it neither anticipates nor intends exiting a lease, therefore the Group has determined
that the circumstances in which these leases would end mean that an outflow of resources is not considered probable and
therefore it does not hold a material dilapidations provision.
24 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group’s principal financial instruments, other than derivatives, comprise bank loans, senior unsecured bonds, cash,
short-term deposits, trade receivables and trade payables. The Group’s financial instrument policies can be found in the
accounting policies in Note 2. The Board agrees policies for managing the financial risks summarised below:
Interest rate risk
The Group’s exposure to market risk for changes in interest rates relates primarily to the Group’s long-term debt obligations.
Interest rate swaps are used where necessary to maintain a mix of fixed and floating rate borrowings to manage this risk,
in line with the Group treasury policy. At the year-end, (100%) of Group debt was fixed for an average of 4.5 years at an
average interest rate of 3.0% (2022: £991.9m (100%) for 5.5 years at 3.0%). The interest rate swaps for sterling expired in
February 2022.
In accordance with IFRS 7 Financial Instruments: Disclosures, the Group has undertaken sensitivity analysis on its financial
instruments which are affected by changes in interest rates. This analysis has been prepared on the basis of a constant
amount of net debt, a constant ratio of fixed to floating interest rates, and on the basis of the hedging instruments in place
at 2 March 2023 and 3 March 2022 respectively. Consequently, the analysis relates to the situation at those dates and is not
representative of the years then ended. The following assumptions were made:
• balance sheet sensitivity to interest rates applies only to derivative financial instruments, as the carrying value of debt
and deposits does not change as interest rates move; and
• gains or losses are recognised in equity or the consolidated income statement in line with the accounting policies set
out in Note 2.
Based on the Group’s net debt/cash position at the year-end, a 1%pt increase in interest rates would increase the Group’s
profit before tax by £11.6m (2022: £11.3m).
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
173
Strategic report Governance Financial statements Other information
174
24 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES CONTINUED
Liquidity risk
In its funding strategy, the Group’s objective is to maintain a balance between the continuity of funding and flexibility
through access to a revolving credit facility, additional uncommitted credit lines and the bond market. This strategy includes
monitoring the maturity of its financial liabilities to avoid the risk of a shortage of funds.
Excess cash used in managing liquidity is placed on interest-bearing deposit where maturity is fixed at no more than three
months. Short-term flexibility is achieved through the use of short-term borrowing on the money markets.
The tables below summarise the maturity profile of the Group’s financial liabilities at 2 March 2023 and 3 March 2022 based
on contractual undiscounted payments, including interest:
2 MARCH 2023
On
demand
£m
Less than
3 months
£m
3 to 12
months
£m
1 to 5
years
£m
More than
5 years
£m
Total
£m
Carrying
value
NON-DERIVATIVE FINANCIAL ASSETS/LIABILITIES:
Interest-bearing loans and borrowings – 14.6 15.2 824.3 294.6 1,148.7 993.4
Lease liabilities
1
– 70.9 217.6 862.1 5,437.3 6,587.9 3,958.4
Trade and other payables – 198.9 – 3.8 – 202.7 202.7
– 284.4 232.8 1,690.2 5,731.9 7,939.3 5,154.5
DERIVATIVE FINANCIAL ASSETS/LIABILITIES:
Cross-currency swaps
Derivative contracts – receipts – – (15.2) (480.4) – (495.6)
Derivative contracts – payments – – 9.8 481.7 – 491.5
– – (5.4) 1.3 – (4.1)
TOTAL – 284.4 227.4 1,691.5 5,731.9 7,935.2
3 MARCH 2022
On
demand
£m
Less than
3 months
£m
3 to 12
months
£m
1 to 5
years
£m
More than
5 years
£m
Total
£m
Carrying
value
NON-DERIVATIVE FINANCIAL ASSETS/LIABILITIES:
Interest-bearing loans and borrowings – 19.0 15.2 554.1 594.6 1,182.9 991.9
Lease liabilities
1
– 6 7.3 206.5 1,116.5 4,918.3 6,308.6 3,701.8
Trade and other payables – 163.6 12.4 1.2 – 177.2 176.9
– 249.9 234.1 1,671.8 5,512.9 7,668.7 4,870.6
DERIVATIVE FINANCIAL ASSETS/LIABILITIES:
Cross-currency swaps
Derivative contracts – receipts – – (15.2) (495.6) – (510.8)
Derivative contracts – payments – – 9.1 459.1 – 468.2
– – (6.1) (36.5) – (42.6)
TOTAL – 249.9 228.0 1,635.3 5,512.9 7,626.1
1 Contractual undiscounted payments relating to lease liabilities due in more than 5 years includes £1,401.2m (2022: £1,324.5m) due between 5 and 10 years, £2,271.1m
(2022: £1,925.3m) due between 10 and 20 years and £1,765.0m (2022: £1,668.5m) due in more than 20 years.
Whitbread Annual Report and Accounts 2022/23
174
Notes to the Consolidated Financial Statements continued
175
24 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES CONTINUED
Credit risk
Due to the high level of cash held at the year-end, the most significant credit risk faced by the Group is that arising on cash
and cash equivalents. The Group’s exposure arises from default of the counterparty, with a maximum exposure equal to the
carrying value of these instruments. The Group seeks to minimise the risk of default in relation to cash and cash equivalents
by spreading investments across a number of counterparties and dealing in accordance with Group treasury policy which
specifies acceptable credit ratings and maximum investments for any counterparty.
In the event that any of the Group’s banks get into financial difficulty, the Group is exposed to the risk of withdrawal of
currently undrawn committed facilities. This risk is mitigated by the Group having a range of counterparties to its facilities.
The Group is exposed to a small amount of credit risk attributable to its trade and other receivables. This is minimised
by dealing with counterparties with good credit ratings. The amounts included in the balance sheet are net of expected
credit losses, which have been estimated by management based on prior experience and any known factors at the balance
sheet date.
The Group’s maximum exposure to credit risk arising from trade and other receivables, loans to joint ventures, derivatives
and cash and cash equivalents is £1,256.7m (2022: £1,240.4m).
Foreign currency risk
The Group monitors the growth and risks associated with its overseas operations and will undertake hedging activities
as and when they are required. In October 2019, the Group entered into a net investment hedge to manage the impact of
movements in the GBP:EUR exchange rate on the value of the Group’s investment in its business in Germany. See Note 25
for more details.
Capital management
The Group’s primary objective in regard to capital management is to ensure that it continues to operate as a going concern
and has sufficient funds at its disposal to grow the business for the benefit of shareholders. The Group seeks to maintain
a ratio of debt to equity that balances risks and returns and also complies with the Group’s net debt to EBITDA covenant.
See pages 36 to 41 of this report for the policies and objectives of the Board regarding capital management, analysis of the
Group’s credit facilities and financing plans for the coming years.
The Group aims to maintain sufficient funds for working capital and future investment in order to meet growth targets.
The management of equity through share buybacks and new issues is considered as part of the overall leverage framework
balanced against the funding requirements of future growth. In addition, the Group may carry out a number of sale and
leaseback transactions to provide further funding for growth.
The revolving credit facility, which at 3 March 2022 was £850.0m, was replaced on 25 May 2022 with a new 5 year £775.0m
multicurrency revolving credit facility agreement. The new revolving credit facility agreement contains one financial
covenant ratio, being: Net Debt/Adjusted EBITDA <3.5x.
The above matters are considered at regular intervals and form part of the business planning and budgeting processes.
In addition, the Board regularly reviews the Group’s dividend policy and funding strategy.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
175
Strategic report Governance Financial statements Other information
176
25 FINANCIAL INSTRUMENTS
The carrying value of financial assets and liabilities at each reporting date are as follows:
Amortised cost Fair value
Carrying
value
£m
Financial
assets
£m
Financial
liabilities
£m
Hedging
instruments
£m
Other
£m
AT 2 MARCH 2023
Trade and other receivables 92.0 – – – 92.0
Cash and cash equivalents 395.1 – – 769.6 1,164.7
Interest-bearing loans and borrowings – (993.4) – – (993.4)
Lease liabilities – (3,958.4) – – (3,958.4)
Derivative financial instruments – – (7.8) – (7.8)
Trade and other payables – (198.9) – – (198.9)
Deferred and contingent consideration – – – (3.8) (3.8)
AS AT 3 MARCH 2022
Trade and other receivables 92.2 – – – 92.2
Cash and cash equivalents 375.1 – – 757.3 1,132.4
Interest-bearing loans and borrowings – (991.9) – – (991.9)
Lease liabilities – (3,701.8) – – (3,701.8)
Derivative financial instruments – – 15.8 – 15.8
Trade and other payables – (151.8) – – (151.8)
Deferred and contingent consideration – – – (25.1) (25.1)
Fair values
IFRS 13 Fair Value Measurement requires that the classification of financial instruments at fair value be determined by
reference to the source of inputs used to derive the fair value. The classification uses the following three-level hierarchy:
Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2 – other techniques for which all inputs, which have a significant effect on the recorded fair value, are observable,
either directly or indirectly; and
Level 3 – techniques which use inputs, which have a significant effect on the recorded fair value, that are not based on
observable market data.
For assets and liabilities that are recognised in the financial statements at fair value on a recurring basis, the Group
determines whether transfers have occurred between levels in the hierarchy by reassessing categorisation (based on the
lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
Financial assets and liabilities measured at amortised cost
The carrying value of trade and other receivables, cash and cash equivalents, and trade and other payables are considered
to be reasonable approximations of their fair values largely due to the short-term maturities of these instruments.
The fair value of the Group’s borrowings is estimated at £879.4m. The fair value of the Group’s borrowings is based on level 1
valuation techniques where there is an active market for the instrument and on level 2 valuation techniques otherwise.
Financial assets and liabilities measured at fair value
2023
£m
2022
£m
FINANCIAL ASSETS
Derivative financial instruments – level 2 – 15.8
FINANCIAL LIABILITIES
Derivative financial instruments – level 2 7.8 –
Deferred and contingent consideration – level 3 3.8 25.1
Whitbread Annual Report and Accounts 2022/23
176
Notes to the Consolidated Financial Statements continued
177
25 FINANCIAL INSTRUMENTS CONTINUED
During the year ended 2 March 2023, there were no transfers between fair value measurement levels. Derivative financial
instruments include £nil assets (2022: £15.8m) and £7.8m liabilities (2022: £nil) due after one year. Deferred and contingent
consideration includes £3.8m (2022: £1.2m) due after one year.
The fair value of derivative instruments classified as level 2 is calculated by discounting all future cash flows by the relevant
market discount rate at the balance sheet date. The fair value of money market funds within cash and cash equivalents
classified as level 1 are calculated by reference to their active market value at 2 March 2023.
The fair value of deferred and contingent consideration relating to acquisitions is classified as level 3. Details of the valuation
are included in Note 26.
Derivative financial instruments
Cash flow hedges
Commodity price risk
The Group is exposed to commodity risk in the form of power requirements. The Group manages this risk through a
combination of fixed price agreements and hedging. During the year, the Group entered into power commodity price swaps
to fix the price of 20% of forecast usage within FY25.
Interest rate risk
The Group had interest rate swaps in place which matured in February 2022 at the same point as the repayment of US
denominated debt.
Hedge of net investment in foreign operations
In October 2019, the Group entered into cross-currency swaps, whereby it pays an average fixed rate of 2.12% on a notional
amount of €521.0m and receives a fixed rate of 3.375% on a notional amount of £450.0m. These swaps are being used as
a net investment hedge to manage the impact of movements in the GBP:EUR exchange rate on the value of the Group’s
investment in its business in Germany. The swaps mature in October 2025 in line with the bonds.
There is an economic relationship between the hedged item and the hedging instrument as the net investment creates
a translation risk that will match the foreign exchange risk on the cross-currency swaps. The Group has established a
hedge ratio of 1:1 as the underlying risk of the hedging instrument is identical to the hedged risk component. The hedge
ineffectiveness will arise when the amount of the investment in the foreign subsidiary becomes lower than the nominal
amount of the swaps.
The net investment hedges were assessed to be highly effective at 2 March 2023 and a net unrealised gain of £24.7m (2022:
gain of £9.7m) has been recorded in the translation reserve. The Group has recorded costs of hedging of £1.1m (2022: £2.5m)
within finance costs in the consolidated income statement as a result of the foreign currency basis spread within the
hedging instrument.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
177
Strategic report Governance Financial statements Other information
178
25 FINANCIAL INSTRUMENTS CONTINUED
The impact of the hedging instruments and hedged items on the statement of financial position is as follows:
AT 2 MARCH 2023
Notional
amount
£m
Carrying
amount
£m
Line item in statement
of financial position
£m
Change in fair
value used
for measuring
ineffectiveness
for the year
£m
Hedged item
£m
Change in
fair value
of hedged
item
£m
NET INVESTMENT IN FOREIGN
OPERATIONS
Cross-currency swaps
450.0 (6.6) Derivative financial
instruments
(22.2)
Net investment
in foreign
subsidiaries
22.2
CASH FLOW HEDGES
Power commodity swap 10.2 (1.3)
Derivative financial
instruments
(1.3)
Highly probable
forecast future
power usage
N/A –
future
usage
AT 3 MARCH 2022
Notional
amount
£m
Carrying
amount
£m
Line item in statement
of financial position
£m
Change in fair
value used
for measuring
ineffectiveness
for the year
£m
Hedged item
£m
Change in
fair value
of hedged
item
£m
NET INVESTMENT IN FOREIGN
OPERATIONS
Cross-currency swaps 450.0 15.8
Derivative financial
instruments 9.0
Net investment
in foreign
subsidiaries (9.0)
The impact of the hedging instruments in the consolidated income statement and consolidated statement of comprehensive
income is as follows:
Total hedging loss
recognised in other
comprehensive income
£m
Amount
reclassified from other
comprehensive income
to profit or loss
£m
Line item in
the consolidated
income statement
£m
Accumulated value
recognised in cash
flow hedge reserve
£m
2022/23
Power commodity swaps (1.3) – N/A – future usage (1.3 )
2021/22
Interest rate swaps (0.2) 2.5 Finance costs –
Cross-currency swaps (8.0) 8.1 Finance costs –
Whitbread Annual Report and Accounts 2022/23
178
Notes to the Consolidated Financial Statements continued
179
25 FINANCIAL INSTRUMENTS CONTINUED
Impact of hedging on equity
Set out below is the reconciliation of each component of equity and the analysis of other comprehensive income:
Cash flow
hedge
reserve
£m
Foreign
currency
translation
reserve
£m
At 25 February 2021 (1.9) 28.7
Change in fair value recognised in other comprehensive income
– Interest rate swaps (0.2) –
– Cross-currency swaps (8.0) –
Reclassified to profit or loss as hedged item effects profit or loss
– Interest rate swaps 2.5 –
– Cross-currency swaps 8.1 –
Foreign exchange arising on consolidation – (16.0)
Fair value movement on derivatives designated as net investment hedges – 9.7
Deferred tax credit (0.5) 1.9
AT 3 MARCH 2022 – 24.3
Change in fair value recognised in other comprehensive income
– Power commodity swap (1.3) –
Foreign exchange arising on consolidation – 37.3
Fair value movement on derivatives designated as net investment hedges – (24.7)
Deferred tax credit – (1.9)
AT 2 MARCH 2023 (1.3) 35.0
Cash flow hedges are expected to impact on the consolidated income statement in line with the liquidity risk table shown
in Note 24. There have been no amounts reclassified to profit or loss as a result of the hedged cash flow no longer being
expected to occur. The foreign currency translation reserve includes an accumulated loss of £10.5m (2022: gain of £14.2m)
relating to derivatives designated as net investment hedges.
26 TRADE AND OTHER PAYABLES
2023
£m
2022
£m
Trade payables 95.2 73.7
Other taxes and social security 40.2 25.8
Contract liabilities 197.8 146.2
Accruals 239.8 223.0
Other payables 103.7 78.1
Deferred and contingent consideration 3.8 25.1
680.5 571.9
ANALYSED AS:
Current 676.7 570.7
Non-current 3.8 1.2
680.5 571.9
Included within contract liabilities is £195.8m (2022: £141.4m) relating to customer payments received for accommodation
where the stay will take place after the year-end and £4.0m (2022: £4.8m) revenue deferred relating to the Group’s
customer loyalty programmes. During the year, £146.2m presented as a contract liability in 2022 has been recognised in
revenue (2022: £41.3m).
Trade payables typically have maturities up to 60 days depending on the nature of the purchase transaction and the
agreed terms.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
179
Strategic report Governance Financial statements Other information
180
26 TRADE AND OTHER PAYABLES CONTINUED
Deferred and contingent consideration
2023
£m
2022
£m
Opening deferred and contingent consideration 25.1 62.8
Recognised on acquisition of assets (Note 35) 2.5 –
Unwinding of discount rate (Note 8) 0.2 1.4
Paid during the period (25.3) (36.3)
Foreign exchange movements 1.3 (2.8)
CLOSING DEFERRED AND CONTINGENT CONSIDERATION 3.8 25.1
The Group has contingent consideration in relation to four pipeline sites from acquisitions in the current and previous years
which is held at fair value. The amounts payable are fixed and become payable once development of the site is complete
and the site has been handed over to the Group, which is expected to occur within two years. The fair value is calculated
by discounting the future payments from their expected handover date using a risk adjusted discount rate. A 1% decrease/
increase in the discount rate would increase/decrease the value of contingent consideration by £0.1m.
Foreign exchange movements on deferred and contingent consideration are recognised within exchange differences on
translation of foreign operations in the consolidated statement of comprehensive income.
27 SHARE CAPITAL
ORDINARY SHARE CAPITAL
ALLOTTED, CALLED UP AND FULLY PAID ORDINARY SHARES OF 76.80P EACH
(2022: 76.80P EACH)
million £m
At 25 February 2021 214.4 164.7
Issued on exercise of employee share options 0.1 0.1
AT 3 MARCH 2022 214.5 164.8
Issued on exercise of employee share options 0.1 0.1
AT 2 MARCH 2023 214.6 164.9
Employee share options
During the year, options over 0.1m (2021/22: 0.1m) ordinary shares, fully paid, were exercised by employees under the terms
of various share option schemes. The Company received proceeds of £2.0m (2021/22: £1.9m) on exercise of these options.
Preference share capital
B shares C shares
ALLOTTED, CALLED UP AND FULLY PAID SHARES OF 1P EACH
(2022: 1P EACH)
million £m million £m
AT 25 FEBRUARY 2021, 3 MARCH 2022 AND 2 MARCH 2023 2.0 – 1.9 –
B shareholders are entitled to an annual non-cumulative preference dividend paid in arrears on or around 2 July each year
on a notional amount of 155p per share.
C shareholders are entitled to an annual non-cumulative preference dividend paid in arrears on or around 14 January each
year on a value of 159p per share.
Other than shares issued in the normal course of business as part of the share-based payments schemes, there have been
no transactions involving ordinary shares or potential ordinary shares since the reporting date and before the completion of
these consolidated financial statements.
Whitbread Annual Report and Accounts 2022/23
180
Notes to the Consolidated Financial Statements continued
181
28 RESERVES
Share premium
The share premium reserve is the premium paid on the Company’s 76.80p ordinary shares.
Capital redemption reserve
A capital redemption reserve was created on the cancellation of the Group’s B and C preference shares and also includes the
nominal value of cancelled ordinary shares.
Retained earnings
In accordance with IFRS practice, retained earnings include revaluation reserves which arose on transition to IFRS.
Currency translation reserve
The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial
statements of foreign subsidiaries, other foreign currency investments and exchange differences on derivative instruments
that provide a hedge against net investments in foreign operations.
Other reserves
The movement in other reserves during the year is set out in the table below:
Treasury
reserve
£m
Merger
reserve
£m
Hedging
Reserve
£m
Excluded
component
of hedge
reserve
£m
Total other
reserves
£m
At 25 February 2021 520.3 1,855.0 1.9 – 2,377.2
Other comprehensive income – net loss on cash flow hedges
(Note 25) – – (2.4) – (2.4)
Other comprehensive income – deferred tax on cash flow hedges
(Note 25) – – 0.5 – 0.5
Other comprehensive income – gain on net investment hedge – – – 0.7 0.7
Cost of hedging – – – (2.5) (2.5)
Loss on ESOT shares issued (3.2) – – – (3.2)
AT 3 MARCH 2022 517.1 1,855.0 – (1.8) 2,370.3
Other comprehensive income – net loss on cash flow hedges
(Note 25) – – 1.3 – 1.3
Other comprehensive income – deferred tax on cash flow hedges
(Note 25) – – – –
Other comprehensive income – loss on net investment hedge – – – (2.5) (2.5)
Cost of hedging – – – (1.1) (1.1)
Purchase of ESOT shares 31.7 – – – 31.7
Loss on ESOT shares issued (4.3) – – – (4.3)
AT 2 MARCH 2023 544.5 1,855.0 1.3 (5.4) 2,395.4
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
181
Strategic report Governance Financial statements Other information
182
28 RESERVES CONTINUED
Treasury reserve
This reserve relates to shares held by an independently managed ESOT and treasury shares held by Whitbread PLC.
The shares held by the ESOT were purchased in order to satisfy outstanding employee share options and potential awards
under the Long Term Incentive Plan (LTIP) and other incentive schemes.
The movement in treasury reserves during the year is set out in the table below:
Treasury shares held by
Whitbread PLC ESOT shares held
million £m million £m
At 25 February 2021 12.5 514.5 0.4 5.8
Exercised during the year – – (0.2) (3.2)
AT 3 MARCH 2022 12.5 514.5 0.2 2.6
Purchase of ESOT shares – – 1.2 31.7
Exercised during the year – – (0.2) (4.3)
AT 2 MARCH 2023 12.5 514.5 1.2 30.0
During the year, 1.3m shares were purchased by the Group’s independently managed Employee Share Ownership Trust
(ESOT) for consideration of £31.7m.
Merger reserve
The merger reserve arose as a consequence of the merger in 2000/01 of Whitbread Group PLC and Whitbread PLC.
Hedging reserve
The hedging reserve records movements for effective cash flow hedges measured at fair value.
Excluded component of hedge reserve
The excluded component of hedge reserve records movements in the elements of derivatives used in hedging arrangements
that are excluded from the hedge relationship.
29 ANALYSIS OF CASH FLOWS GIVEN IN THE CASH FLOW STATEMENT
2022/23
£m
2021/22
£m
Profit for the year 278.8 42.5
Adjustments for:
Tax expense 96.1 15.7
Net finance costs (Note 8) 130.1 169.1
Share of profit from joint ventures (2.3) (0.4)
Depreciation and amortisation 345.5 326.9
Share-based payments 17.7 12.9
Net impairment charge/(reversals) (Note 15) 34.9 (34.4)
Gains on disposals, property, and other provisions (4.0) (28.8)
Other non-cash items 0.6 7.7
CASH GENERATED FROM OPERATIONS BEFORE WORKING CAPITAL CHANGES 897.4 511.2
Increase in inventories (2.3) (7.3)
Increase in trade and other receivables (10.9) (45.4)
Increase in trade and other payables 112.1 235.2
CASH GENERATED FROM OPERATIONS 996.3 693.7
Other non-cash items include an outflow of £0.3m representing bad debt charges (2021/22: £0.8m inflow), an outflow
of £0.7m (2021/22: £4.3m inflow) as a result of net provision movements, an inflow of £3.6m (2021/22: £2.6m inflow)
representing non-cash pension scheme administration costs and an outflow of £2.1m (2021/22: £nil) from foreign
exchange gains.
30 CONTINGENT LIABILITIES
There are no contingent liabilities to be disclosed in the year ended 2 March 2023 (2022: none).
Whitbread Annual Report and Accounts 2022/23
182
Notes to the Consolidated Financial Statements continued
183
31 SHARE-BASED PAYMENT PLANS
Long Term Incentive Plan
The LTIP awards were made to directors and senior executives of the Group prior to the adoption of the Restricted Share
Plan. Vesting of share awards under the scheme is dependent on continued employment and meeting performance targets
over a three-year vesting period. The awards are settled in equity once exercised.
Deferred equity awards
Share awards are made under the Whitbread Directors Incentive Scheme implemented during 2004/05. The awards are
not subject to performance conditions and will vest in full on the release date subject to continued employment at that date.
If the director or senior executive of the Group ceases to be an employee of Whitbread prior to the release date, normally
three years after the award, by reason of redundancy, retirement, death, injury, ill health, disability or some other reason
considered to be a permitted reason by the Remuneration Committee, the awards will be released in full. If employment
ceases for any other reason, the proportion of awards which vest depends upon the year in which the award was made and
the date that employment ceased. If employment ceases in the first year after an award is made, none of the award vests;
between the first and second anniversary, 25% vests; and between the second and third anniversary, 50% vests. The awards
are settled in equity once exercised.
R&R Scheme
The R&R Scheme enables Whitbread to make share awards periodically on a flexible basis. There are typically no
performance conditions but these can be imposed by Whitbread at time of grant. The awards issued are subject to being in
employment at date of vesting with no performance conditions. If employment at Whitbread ceases prior to the vesting date
by reason of resignation or terminated for cause, all unvested shares will lapse. If employment ceases for any other reason,
any vesting will be at the discretion of the CEO and, if granted, will be on a pro-rated basis to the leaving date. The awards
are settled in equity once exercised.
Restricted Share Plan
At the general meeting held on 6 December 2019, it was agreed that the Restricted Share Plan would replace the Long
Term Incentive Plan. Vesting of all shares under the scheme will depend on continued employment and meeting underpin
targets over a period of at least three years. Details of the underpin targets that apply to RSP awards are included in the
remuneration report on pages 92 to 115. After vesting, there is an additional holding period applicable to directors and
senior executives such that the underpin measurement period and holding period is at least five years. If employment at
Whitbread ceases prior to the vesting date by reason of resignation or terminated for cause, all unvested shares will lapse.
If employment ceases for any other reason, any vesting will be at the discretion of the Remuneration Committee and, if
granted, will be on a pro-rated basis to the leaving date. The awards are settled in equity once exercised.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
183
Strategic report Governance Financial statements Other information
184
31 SHARE-BASED PAYMENT PLANS CONTINUED
Movements in the number of share awards are as follows:
52 WEEKS TO 2 MARCH 2023
Outstanding
at the
beginning
of the year
Granted
during the
year
Exercised
during the
year
Expired
during the
year
Outstanding
at the end
of the year
Exercisable
at the end
of the year
Long Term Incentive Plan 130,499 – (57,065) (4,457) 68,977 68,977
Deferred equity awards 154,341 176,272 (64,917) (1,836) 263,860 –
R&R Scheme 523,455 84,249 (39,020) (29,525) 539,159 –
Restricted Share Plan 254,875 283,603 (3,186) (58,212) 477,080 –
1,063,170 544,124 (164,188) (94,030) 1,349,076 68,977
53 WEEKS TO 3 MARCH 2022
Outstanding
at the
beginning of
the year
Granted
during the
year
Exercised
during the
year
Expired
during the
year
Outstanding
at the end of
the year
Exercisable
at the end of
the year
Long Term Incentive Plan 149,688 – (17,859) (1,330) 130,499 129,613
Deferred equity awards 242,160 4,345 (79,978) (12,186) 154,341 5,998
R&R Scheme 652,851 12,146 (139,583) (1,959) 523,455 9,586
Restricted Share Plan 106,687 167,673 – (19,485) 254,875 –
1,151,386 184,164 (237,420) (34,960) 1,063,170 145,197
Employee Sharesave scheme
The employee Sharesave scheme is open to all employees and provides for a purchase price equal to the market price on the
day preceding the date of invitation, with a 20% discount. The shares can be purchased over the six-month period following
the third or fifth anniversary of the commencement date, depending on the length chosen by the employee.
The weighted average exercise price (WAEP) of movements in the number of share awards are as follows:
2022/23 2021/22
Options
WAEP £ per
share Options
WAEP £ per
share
Outstanding at the beginning of the year 1,173,108 26.01 1,139,975 26.59
Granted during the year
1
649,795 20.51 410,032 24.86
Exercised during the year (65,199) 27.18 (81,727) 26.15
Expired during the year (497,900) 26.19 (295,172) 26.65
Outstanding at the end of the year 1,259,804 23.01 1,173,108 26.01
Exercisable at the year-end 60,647 27.64 89,941 30.66
Outstanding options to purchase ordinary shares of 76.80p between 2023 and 2028 are exercisable at prices between
£24.86 and £31.62 per share (2022: between 2022 and 2027 at prices between £25.33 and £31.62). The weighted average
share price at the date of exercise for options exercised during the year was £30.10 (2022: £31.63).
The weighted average contractual life of the share options outstanding as at 2 March 2023 is between two and three years.
Whitbread Annual Report and Accounts 2022/23
184
Notes to the Consolidated Financial Statements continued
185
31 SHARE-BASED PAYMENT PLANS CONTINUED
The following table lists the inputs to the model used for the years ended 2 March 2023 and 3 March 2022:
Grant date
Exercise
price
£
Price at
grant date
£
Expected
term
Years
Expected
dividend
yield
%
Expected
volatility
%
Risk-free
rate %
Vesting
conditions
Deferred equity awards 28.04.2022 – 28.75 3.00 2.00 N/A N/A Service
3
Deferred equity awards 27.04.2021 – 32.97 3.00 0.75 N/A N/A Service
3
R&R awards – 2 years 28.04.2022 - 28.75 2.00 2.00 N/A N/A Service
3
R&R awards – 3 years 28.04.2022 - 28.75 3.00 2.00 N/A N/A Service
3
Restricted Share Plan
5
17.01 .2023 – 30.28 0.16 – N/A N/A Service
3
Restricted Share Plan
5
17.01 .2023 – 30.28 2.66 2.00 N/A N/A Service
3
Restricted Share Plan
5
17.01 .2023 – 30.28 3.66 2.00 N/A N/A Service
3
Restricted Share Plan
5
17.01 .2023 – 30.28 2.16 2.00 N/A N/A Service
3
Restricted Share Plan
5
17.01 .2023 – 30.28 3.24 2.00 N/A N/A Service
3
Restricted Share Plan 27.04.2021 – 32.97 3.00 0.75 N/A N/A Non–market
1,2,3,4
SAYE – 3 years 02.12.2022 20.51 26.09 3.25 2.00 40.0 3.38 Service
3
SAYE – 3 years 23.12.2021 24.86 29.63 3.25 2.00 45.0 0.69 Service
3
SAYE – 5 years 02.12.2022 20.51 26.09 5.25 2.00 40.0 3.29 Service
3
SAYE – 5 years 23.12.2021 24.86 29.63 5.25 2.00 45.0 0.75 Service
3
1 Return on capital employed.
2 Other performance conditions.
3 Employment service.
4 Lease-adjusted net debt.
5 Refer to the Annual report on remuneration.
The fair value of share options granted is estimated as at the date of grant using a stochastic model, taking into account the
terms and conditions upon which the options were granted.
Expected volatility reflects the assumption that historical volatility is indicative of future trends, which may not necessarily
be the actual outcome. The risk-free rate is the rate of interest obtainable from Government securities over the expected life
of the equity incentive. The expected dividend yield is calculated on the basis of publicly available information at the time of
the grant date which, in most cases, is the historic dividend yield. No other features relating to the granting of options were
incorporated into the measurement of fair value.
Employee share ownership trust
The Company funds an ESOT to enable it to acquire and hold shares for the share-based payment plans noted above.
The ESOT held 1.2m shares at 2 March 2023 (2022: 0.2m). All dividends on the shares in the ESOT are waived by the Trustee.
TOTAL CHARGED TO THE CONSOLIDATED INCOME STATEMENT FOR ALL SCHEMES
2022/23
£m
2021/22
£m
Deferred equity 2.6 1.5
R&R Scheme 5.8 5.5
Restricted Share Plan 3.7 1.6
Employee Sharesave scheme 5.6 4.3
EQUITY-SETTLED 17.7 12.9
32 RETIREMENT BENEFITS
Defined contribution schemes
The Group operates a contracted-in defined contribution scheme under the Whitbread Group Pension Fund. Contributions
by both employees and Group companies are held in externally invested, trustee-administered funds.
The Group contributes a specified percentage of earnings for members of the above defined contribution scheme, and
thereafter has no further obligations in relation to the scheme. The total cost charged to the consolidated income statement
in relation to the defined contribution scheme in the year was £12.8m (2021/22: £11.0m). At the year-end, the Group owed
outstanding contributions of £nil (2022: £nil) in respect of the defined contribution scheme.
At the year-end, 24,284 employees (2022: 23,449) were active members of the scheme, which also had 58,406 deferred
members (2022: 52,303).
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
185
Strategic report Governance Financial statements Other information
186
32 RETIREMENT BENEFITS CONTINUED
Defined benefit scheme
The defined benefit (final salary) section of the principal Group pension scheme, the Whitbread Group Pension Fund,
was closed to new members on 31 December 2001 and to future accrual on 31 December 2009. The Whitbread Group
Pension Fund is set up under UK trust law, registered with His Majesty’s Revenue and Customs and regulated by the
Pensions Regulator. The Whitbread Group Pension Fund is governed by a corporate Trustee which operates the scheme in
accordance with the requirements of UK pensions legislation.
At the year-end, the scheme had no active members (2022: nil), 18,241 deferred pensioners (2022: 18,606) and 15,951
pensions in payment (2022: 16,089).
The surplus recognised in the consolidated balance sheet in respect of the defined benefit pension scheme is the fair
value of the plan assets less the present value of the defined benefit obligation at the end of the reporting period. The IAS
19 pension cost relating to the defined benefit section of the Whitbread Group Pension Fund is assessed in accordance
with actuarial advice from, and calculations provided by, Lane Clark & Peacock, using the projected unit credit method.
The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using
interest rates of high-quality corporate bonds that have terms to maturity approximating to the terms of the related pension
obligation. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged
or credited to equity in other comprehensive income in the period in which they arise. As the scheme is closed to future
accrual, there is no future service cost.
The surplus has been recognised as, under the governing documentation of the Whitbread Group Pension Fund, the Group
has an unconditional right to receive a refund, assuming the gradual settlement of the scheme liabilities over time until all
members and their dependants have either died or left the scheme, in accordance with the provisions of IFRIC 14 IAS 19 –
The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction.
The defined benefit scheme entered into a £660.7m buy-in transaction covering 50% of pensioners on 23 June 2022
whereby the assets of the plan were invested in a bulk purchase annuity policy with the insurer, Standard Life, under which
the benefits payable to defined benefit members covered under the policy became fully insured. The difference between
the cost of the insurance policy and the accounting value of the liabilities secured was £68.7m and has been recorded within
actuarial losses in the statement of other comprehensive income.
The weighted average duration of the defined benefit plan obligation at the end of the reporting period is 13.0 years
(2022: 17.0 years).
Funding
Expected contributions to be made in the next reporting period total £16.4m (2021/22: £14.6m). In 2022/23, contributions
were £14.5m, with £3.6m from the employer, £10.8m from Moorgate Scottish Limited Partnership (SLP) and £0.1m of
benefits settled by the Group in relation to an unfunded scheme (2021/22: £13.0m, with £2.6m from the employer, £10.3m
from Moorgate SLP and £0.1m of benefits settled by the Group in relation to an unfunded scheme). In addition, Whitbread
paid £1.2m (2021/22: £1.8m) of investment manager expenses.
A scheme specific actuarial valuation for the purpose of determining the level of cash contributions to be paid into the
Whitbread Group Pension Fund was undertaken as at 31 March 2020 by Towers Watson Ltd using the projected unit credit
method. The valuation showed a surplus of assets relative to technical provisions of £55.0m (31 March 2017: deficit of
£450.0m). As a result, no deficit reduction contributions are due.
As part of the valuation discussion during 2021/22, Whitbread and the Pension Fund Trustee agreed changes to the security
package that supports the Pension Fund. The EBITDA-related covenant was permanently removed and the security that
the Trustee holds over £500.0m of Whitbread’s freehold property increased to £531.5m and will remain at this level until no
further obligations are due under the Scottish Partnership arrangements which is expected to be in 2025. Following that, the
security held by the Trustee will be the lower of: £500.0m; and 120% of the buyout deficit and will remain in place until there
is no longer a buyout deficit.
Whitbread Annual Report and Accounts 2022/23
186
Notes to the Consolidated Financial Statements continued
187
32 RETIREMENT BENEFITS CONTINUED
Investment in Moorgate SLP
The Pension Scheme will receive a share of the income, profits and a variable capital payment from its investment in
Moorgate SLP, which was established by the Group in the year ended 4 March 2010 (the share in profits is accounted for by
the Group as contributions when paid). The partnership interests in Moorgate SLP are held by the Group, the general partner
and by the Pension Scheme.
Moorgate SLP holds an investment in a further partnership, Farringdon Scottish Partnership (SP), which was also established
by the Group during 2009/10. Property assets with a market value of £221.0m were transferred from other Group
companies to Farringdon SP and leased back to Whitbread Group PLC and Premier Inn Hotels Limited. The Group retains
control over these properties, including the flexibility to substitute alternative properties. However, the Trustee has first
charge over the property portfolio and certain other assets with an aggregate value of £228.0m which is included in the
charge of £531.5m above. The Group retains control over both partnerships and, as such, they are fully consolidated in these
consolidated financial statements.
The Pension Scheme is a partner in Moorgate SLP and, as such, is entitled to an annual share of the profits of the partnership
over the next two years. At the end of this period, the partnership capital allocated to the Pension Scheme partner will,
depending on the funding position of the Pension Scheme at that time, be transferred in cash to the Pension Scheme up to a
value of £150.0m.
Under IAS 19, the investment held by the Pension Scheme in Moorgate SLP, a consolidated entity, does not represent a
plan asset for the purposes of the consolidated financial statements. Accordingly, the pension surplus position in these
consolidated financial statements does not reflect the £21.9m (2022: £96.8m) investment in Moorgate SLP held by the
Pension Scheme.
Risks
Through its defined benefit scheme, the Group is exposed to a number of risks in relation to the IAS 19 surplus, the most
significant of which are detailed below:
Risk Description
Principal impact on assets and
obligation reconciliations
MARKET VOLATILITY The value of the defined benefit obligation is linked to
AA-rated corporate bonds whilst the scheme invests some
of its assets in alternative asset classes (including those
denominated in foreign currencies). These assets include
private equities, secure income assets, gilts, swaps and cash.
This exposes the Group to risks including those relating to
interest rates, equity markets, foreign exchange and climate
change. As a result, any change in market conditions which
impacts the value of the scheme’s assets or the interest rate
on AA-rated corporate bonds will lead to volatility in the
Group’s net pension liability on the balance sheet, pension
expense in the income statement and remeasurement of
movements in other comprehensive income. There is the
potential for heightened market volatility through a number
of different sources, including the economic impact of the
Russia-Ukraine conflict, the policy intervention of central
banks in response to the inflationary environment which
could have consequential implications on interest rates, in
addition to wider economic impacts. There are also longer
term macroeconomic risks, such as the possible risk of
recession and constraints on market liquidity, which could all
adversely affect the Scheme’s assets.
Return on plan assets
Actuarial movements in
financial assumptions
INFLATIONARY RISK Due to the link between the scheme obligation and inflation,
an increase in the expected future rate of inflation will lead
to higher scheme liabilities, although this is mitigated by the
scheme holding inflation-linked assets which aim to match
the increase in liabilities.
Actuarial movements in
financial assumptions
ACCOUNTING
ASSUMPTIONS
The defined benefit obligation is calculated by projecting
the future cash flows of the scheme for many years into
the future. Consequently, the assumptions used can have a
significant impact on the balance sheet position and income
statement charge. In practice, future scheme experience
may not be in line with the assumptions adopted. For
example, an increase in the life expectancy of members
would increase scheme liabilities.
Discount rate: interest income
on scheme assets and cost
on liabilities
Mortality: actuarial movements
in demographic assumptions
Actuarial movements in
financial assumptions
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
187
Strategic report Governance Financial statements Other information
188
32 RETIREMENT BENEFITS CONTINUED
The principal assumptions used by the independent qualified actuaries in updating the most recent valuation carried out as
at 31 March 2020 of the UK scheme to 2 March 2023 for IAS 19 Employee benefits purposes were:
At
2 March
2023
%
At
3 March
2022
%
Pre-April 2006 rate of increase in pensions in payment 3.20 3.40
Post-April 2006 rate of increase in pensions in payment 2.20 2.30
Pension increases in deferment 3.20 3.40
Discount rate 5.00 2.60
Inflation assumption 3.30 3.60
The mortality assumptions are based on standard mortality tables which allow for future mortality improvements. The
mortality improvements assumption has been updated to use the CMI 2021 model (2022: CMI 2020). The CMI 2021 model
parameters include some weighting for 2021 mortality experience. The assumptions are that a member currently aged 65
will live on average for a further 19.7 years (2022: 20.0 years) if they are male and for a further 22.4 years (2022: 22.6 years) if
they are female. For a member who retires in 2043 at age 65, the assumptions are that they will live on average for a further
20.7 years (2022: 21.1 years) after retirement if they are male and for a further 23.6 years (2022: 23.8 years) after retirement if
they are female.
During the previous year, the Group changed its methodology for determining the discount rate to include single-AA
corporate bonds.
The amounts recognised in the consolidated income statement in respect of the defined benefit scheme are as follows:
2022/23
£m
2021/22
£m
Net interest on net defined benefit surplus (13.6) (3.6)
Administrative expense 3.6 2.6
TOTAL INCOME RECOGNISED IN THE CONSOLIDATED INCOME STATEMENT
(GROSS OF DEFERRED TAX) (10.0) (1.0)
The amounts taken to the consolidated statement of comprehensive income are as follows:
2022/23
£m
2021/22
£m
Actuarial gains (761.5) (218.8)
Return on plan assets lower/(greater) than discount rate 985.1 (100.0)
REMEASUREMENT EFFECTS RECOGNISED IN OTHER COMPREHENSIVE INCOME 223.6 (318.8)
The amounts recognised in the consolidated balance sheet are as follows:
2023
£m
2022
£m
Present value of defined benefit obligation (1,723.0) (2,521.2)
Fair value of scheme assets 2,047.7 3,043.8
SURPLUS RECOGNISED IN THE CONSOLIDATED BALANCE SHEET 324.7 522.6
Changes in the present value of the defined benefit obligation are as follows:
2022/23
£m
2021/22
£m
Opening defined benefit obligation 2,521.2 2,804.3
Interest cost 64.0 52.3
Remeasurement due to:
Changes in financial assumptions (735.3) (266.0)
Changes in demographic assumptions (26.2) (33.9)
Experience adjustments – 81.1
Benefits paid (100.6) (116.5)
Benefits settled by the Group in relation to an unfunded pension scheme
1
(0.1) (0.1)
CLOSING DEFINED BENEFIT OBLIGATION 1,723.0 2,521.2
Whitbread Annual Report and Accounts 2022/23
188
Notes to the Consolidated Financial Statements continued
189
32 RETIREMENT BENEFITS CONTINUED
Changes in the fair value of the scheme assets are as follows:
2022/23
£m
2021/22
£m
Opening fair value of scheme assets 3,043.8 2,992.3
Interest income on scheme assets 77.6 55.9
Return on plan assets (lower)/greater than discount rate
2
(985.1) 100.0
Contributions from employer
1
3.6 2.6
Additional contributions from Moorgate SLP
1
10.8 10.3
Investment manager expenses paid by the employer
1
1.2 1.8
Benefits paid (100.6) (116.5)
Administrative expenses (3.6) (2.6)
CLOSING FAIR VALUE OF SCHEME ASSETS 2,047.7 3,043.8
The major categories of plan assets are as follows:
2023 2022
Quoted
and pooled
£m
Unquoted
£m
Total
£m
Quoted and
pooled
£m
Unquoted
£m
Total
£m
Equities – – – 76.4 – 76.4
Alternative assets 1.1 – 1.1 143.0 – 143.0
Bonds – 1.3 1.3 164.6 3.2 167.8
Private markets – 508.4 508.4 – 460.7 460.7
Liability driven Investments
3
990.5 – 990.5 2,160.8 – 2,160.8
Cash and other
4
33.6 0.2 33.8 35.1 – 35.1
Buy-in insurance – 512.6 512.6 – – –
1,025.2 1,022.5 2,047.7 2,579.9 463.9 3,043.8
1 The total of these items is equal to the cash paid by the Group as per the consolidated cash flow statement. ‘Contributions from employer’ include contributions to
cover scheme administration expenses.
2 Includes cost of managing fund assets.
3 Liability driven investments includes UK fixed and index-linked gilts, repurchase agreements and reverse repurchase agreements, interest rate and inflation (RPI)
swaps, gilt futures and cash.
4 Other primarily relates to assets held in respect of cash and net current assets.
The assumptions in relation to discount rate, mortality and inflation have a significant effect on the measurement of scheme
liabilities. The following table shows the sensitivity of the valuation to changes in these assumptions:
Decrease/(increase)
in liability
2023
£m
2022
£m
DISCOUNT RATE
2.00% increase to discount rate 357.0
2.00% decrease to discount rate (548.0)
1.00% increase to discount rate 359.0
1.00% decrease to discount rate (458.0)
INFLATION
0.25% increase to inflation rate (39.0) (73.0)
0.25% decrease to inflation rate 38.0 72.0
LIFE EXPECTANCY
Additional one-year increase to life expectancy (71.3) (126.0)
The above sensitivity analyses are based on a change in an assumption whilst holding all other assumptions constant.
In practice, this is unlikely to occur and changes in some of the assumptions may be correlated. Where the discount rate is
changed, this will have an impact on the valuation of scheme assets in the opposing direction. The above sensitivities table
shows only the expected changes to the gross defined benefit obligation (liability). When calculating the sensitivity of the
defined benefit obligation to significant actuarial assumptions, the same method (projected unit credit method) has been
applied as when calculating the pension liability recognised within the consolidated balance sheet. The methods and types
of assumptions did not change.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
189
Strategic report Governance Financial statements Other information
190
33 RELATED PARTY DISCLOSURE
The Group consists of a parent company, Whitbread PLC, incorporated in the UK, and a number of subsidiaries and joint
ventures held directly and indirectly by Whitbread PLC, which operate and are incorporated around the world. Note 9 to the
Company’s separate financial statements lists details of the interests in subsidiaries and related undertakings.
The Group holds 6% as a general partnership interest in Moorgate Scottish Limited Partnership (SLP) with Whitbread
Pension Trustees holding the balance as a limited partner. Moorgate SLP holds a 67.8% investment in a further partnership,
Farringdon Scottish Partnership (SP), which was established by the Group to hold property assets. The remaining 32.2%
interest in Farringdon SP is owned by the Group. The partnerships were set up in 2009/10 as part of a transaction with
Whitbread Pension Trustees and the Group retains control over both partnerships and, as such, they are fully consolidated
in these consolidated financial statements. Further details can be found in Note 32.
Shares in Whitbread Group PLC are held directly by Whitbread PLC. Shares in the other subsidiaries are held directly and
indirectly by Whitbread Group PLC.
RELATED PARTY TRANSACTIONS
2022/23
Joint
ventures
£m
2021/22
Joint
ventures
£m
Sales to a related party – 0.1
Purchases from a related party – –
Amounts owed by related party – –
Amounts owed to related party – –
Other transactions with joint ventures
For details of the Group’s investments in and loans to joint ventures, see Note 16, those details are excluded from the
table above.
Key management personnel
The key management personnel of the Group are defined as the members of the Whitbread PLC Executive Committee.
Compensation of key management personnel (including directors) is set out below.
2022/23
£m
2021/22
£m
Short-term employee benefits 9.5 8.4
Post-employment benefits – –
Share-based payments 6.1 3.9
15.6 12.3
Terms and conditions of transactions with related parties
Sales to, and purchases from, related parties are made at normal market prices. Outstanding balances at year-end are
unsecured and settlement occurs in cash. There have been no guarantees provided, or received, for any related party
receivables. No adjustment for expected credit loss relating to amounts owed by related parties has been made (2022: £nil).
An assessment is undertaken, each financial year, through examining the financial position of the related parties and the
market in which the related parties operate.
Transactions with other related parties
Details of transactions with directors are detailed in Note 7.
34 EVENTS AFTER THE BALANCE SHEET DATE
Share buy-back
The Board of Directors approved a share buy-back on 24 April 2023 for £300.0m and is in the process of appointing the
relevant brokers to undertake the programme in accordance with that approval.
Whitbread Annual Report and Accounts 2022/23
190
Notes to the Consolidated Financial Statements continued
191
35 ASSET ACQUISITION
Acquisition in 2022/23
On 1 March 2023, the Group acquired the freehold interest of one hotel in Austria and was assigned the leasehold of five
hotels within Germany for cash consideration of £25.9m and deferred consideration of £2.5m.
This transaction has been accounted for as an asset acquisition under IFRS 3 Business Combinations as the fair value of the
assets is concentrated in a single group of similar assets. On acquisition, the Group has recognised PPE of £26.3m, right-
of-use assets of £47.1m and lease liabilities of £44.4m in relation to the hotels acquired. The transaction formed part of the
Group’s strategic priority of international growth.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
191
Strategic report Governance Financial statements Other information
Contents
193 Company balance sheet
194 Company statement of changes in equity
195 Notes to the Company financial statements
Whitbread PLC
Company accounts 2022/23
Whitbread Annual Report and Accounts 2022/23
192
Notes
2 March
2023
£m
3 March
2022
£m
NON-CURRENT ASSETS
Investment in subsidiaries 3 2,457.0 2,439.3
Other receivables 4 731.8 1,201.3
TOTAL NON-CURRENT ASSETS 3,188.8 3,640.6
CURRENT ASSETS
Other receivables 4 450.0 100.0
450.0 100.0
TOTAL ASSETS 3,638.8 3,740.6
CURRENT LIABILITIES
Other payables 5 (13.2) (13.5)
(13.2) (13.5)
TOTAL LIABILITIES (13.2) (13.5)
NET ASSETS 3,625.6 3,727.1
EQUITY
Share capital 6 164.9 164.8
Share premium 7 1,026.6 1,024.7
Capital redemption reserve 7 50.2 50.2
Retained earnings 7 2,928.4 3,004.5
Treasury reserve 7 (544.5) (517.1)
TOTAL EQUITY 3,625.6 3,727.1
The profit and loss account of the parent company is omitted from the Company’s accounts by virtue of the exemption
granted by section 408 of the Companies Act 2006. The profit generated in the year for ordinary shareholders, and
included in the financial statements of the parent company, amounted to £29.6m (2021/22: £32.3m).
Dominic Paul Chief Executive Hemant Patel Chief Financial Officer 24 April 2023
Company balance sheet
At 2 March 2023
Company number 04120344
Whitbread Annual Report and Accounts 2022/23
193
Strategic report Governance Financial statements Other information
Share
capital
(Note 6)
£m
Share
premium
(Note 7)
£m
Capital
redemption
reserve
(Note 7)
£m
Retained
earnings
(Note 7)
£m
Treasury
reserve
(Note 7)
£m
Total
£m
At 25 February 2021 164.7 1,022.9 50.2 2,962.5 (520.3) 3,680.0
Profit for the year – – – 32.3 – 32.3
TOTAL COMPREHENSIVE INCOME – – – 32.3 – 32.3
Ordinary shares issued on exercise of employee
share options 0.1 1.8 – – – 1.9
Loss on ESOT shares issued – – – (3.2) 3.2 –
Accrued share-based payments – – – 12.9 – 12.9
AT 3 MARCH 2022 164.8 1,024.7 50.2 3,004.5 (517.1) 3,727.1
Profit for the year – – – 29.6 – 29.6
TOTAL COMPREHENSIVE INCOME – – – 29.6 – 29.6
Ordinary shares issued on exercise of employee
share options 0.1 1.9 – – – 2.0
Loss on ESOT shares issued – – – (4.3) 4.3 –
Accrued share-based payments – – – 17.7 – 17.7
Dividends paid – – – (119.1) – (119.1)
Purchase of ESOT shares – – – – (31.7) (31.7)
AT 2 MARCH 2023 164.9 1,026.6 50.2 2,928.4 (544.5) 3,625.6
Company statement
of changes in equity
Year ended 2 March 2023
Whitbread Annual Report and Accounts 2022/23
194
Notes to the Company financialstatements
At 2 March 2023
1 BASIS OF ACCOUNTING
The financial statements of Whitbread PLC for the year ended 2 March 2023 were authorised for issue by the Board of
Directors on 24 April 2023. The financial year represents the 52 weeks to 2 March 2023 (prior financial year: 53 weeks
to3 March 2022).
The financial statements are prepared under the historical cost convention and in accordance with applicable UK
AccountingStandards. The Company meets the definition of a qualifying entity under FRS 100 Application of Financial
Reporting Requirements as issued by the Financial Reporting Council (FRC). Accordingly, in the year ended 3 March 2016,
the Company underwent transition from reporting under UK GAAP to FRS 101 Reduced Disclosure Framework. The financial
statements are therefore prepared in accordance with FRS 101.
In the previous period, the format of the Company balance sheet was changed to align with how the consolidated balance
sheet is presented.
As permitted by FRS 101, the Company has taken advantage of the disclosure exemptions available under that standard in
relation to share-based payments, non-current assets held for sale, financial instruments, capital management, presentation
of comparative information in respect of certain assets, presentation of a cash flow statement, standards not yet effective,
impairment of non-current assets and related party transactions.
Where required, equivalent disclosures are given in the consolidated financial statements of the Group.
Going concern
The directors have concluded that it is appropriate for the financial statements to be prepared on the going concern basis
(seeNote 2 to the consolidated financial statements).
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Investments
Investments held as non-current assets are stated at cost less provision for any impairment. The carrying value of
investments are reviewed for impairment when events or changes in circumstances indicate that the carrying amount
maynot be recoverable.
Critical accounting judgements and key sources of estimation uncertainty
In the opinion of the directors, there are no critical accounting judgements or key sources of estimation uncertainty in
relation to the parent company financial statements.
Whitbread Annual Report and Accounts 2022/23
195
Strategic report Governance Financial statements Other information
3 INVESTMENT IN SUBSIDIARY UNDERTAKINGS
INVESTMENTS AT COST
2023
£m
2022
£m
Opening investments 2,439.3 2,426.4
Contributions to subsidiaries in respect of share-based payments 17.7 12.9
CLOSING INVESTMENTS 2,457.0 2,439.3
Significant trading subsidiary undertakings Principal activity
Country of
incorporation
Country of
principal
operations
% of equity
and votes
held
Whitbread Group PLC Hotels & Restaurants England England 100.0
Premier Inn Hotels Limited Hotels England England 100.0
Whitbread Group PLC, in which the Company has an investment, holds 6% as a general partnership interest in Moorgate
Scottish Limited Partnership (SLP) with Whitbread Pension Trustees holding the balance as a limited partner. Moorgate SLP
holds a 67.8% investment in a further partnership, Farringdon Scottish Partnership (SP), which was established by the Group
to hold property assets. The remaining 32.2% interest in Farringdon SP is owned by Whitbread Group PLC. The partnerships
were set up in 2009/10 as part of a transaction with Whitbread Pension Trustees. Further details can be found in Note 32 of
the Whitbread PLC consolidated financial statements.
Shares in Whitbread Group PLC are held directly by Whitbread PLC. Shares in the other subsidiaries are held directly or
indirectly by Whitbread Group PLC or its subsidiaries. A full list of subsidiaries and related undertakings is provided in Note9.
4 OTHER RECEIVABLES
2023
£m
2022
£m
Amounts due from subsidiary undertakings 1,181.8 1,301.3
1,181.8 1,301.3
Analysed as:
Current 450.0 100.0
Non-current 731.8 1,201.3
1,181.8 1,301.3
5 OTHER PAYABLES
2023
£m
2022
£m
Unclaimed dividends 6.3 6.0
Corporation tax payable 6.9 7.5
13.2 13.5
Whitbread Annual Report and Accounts 2022/23
196
Notes to the Company financial statements continued
6 SHARE CAPITAL
ORDINARY SHARE CAPITAL
ALLOTTED, CALLED UP AND FULLY PAID ORDINARY SHARES OF 76.80P EACH
(2022: 76.80P EACH)
million £m
At 25 February 2021 214.4 164.7
Issued on exercise of employee share options 0.1 0.1
AT 3 MARCH 2022 214.5 164.8
Issued on exercise of employee share options 0.1 0.1
AT 2 MARCH 2023 214.6 164.9
Employee share options
During the year, options over 0.1m (2021/22: 0.1m) ordinary shares, fully paid, were exercised by employees under the terms
of various share option schemes. The Company received proceeds of £2.0m (2021/22: £1.9m) on exercise of these options.
Preference share capital
B shares C shares
ALLOTTED, CALLED UP AND FULLY PAID SHARES OF 1P EACH
(2022: 1P EACH)
million £m million £m
25 February 2021, 3 March 2022 and 2 March 2023 2.0 – 1.9 –
7 RESERVES
Share premium
The share premium reserve is the premium paid on the Company’s 76.80p ordinary shares.
Capital redemption reserve
A capital redemption reserve was created on the cancellation of the Company’s B and C preference shares and also includes
the nominal value of cancelled ordinary shares.
Retained earnings
Retained earnings are the net earnings not paid out as dividends, but retained to be reinvested.
Treasury reserve
This reserve relates to shares held by an independently managed employee share ownership trust (ESOT) and treasury
shares held by Whitbread PLC. The shares held by the ESOT were purchased in order to satisfy outstanding employee
shareoptions and potential awards under the Long Term Incentive Plan (LTIP) and other incentive schemes.
The movement in treasury reserves during the year is set out in the table below:
Treasury shares held by
Whitbread PLC ESOT shares held
million £m million £m
AT 25 FEBRUARY 2021 12.5 514.5 0.4 5.8
Exercised during the year – – (0.2) (3.2)
AT 3 MARCH 2022 12.5 514.5 0.2 2.6
Purchase of own shares for ESOT – – 1.2 31.7
Exercised during the year – – (0.2) (4.3)
AT 2 MARCH 2023 12.5 514.5 1.2 30.0
Distributable reserves
As at 2 March 2023, Whitbread PLC had distributable reserves of £2,183.0m (2022: £2,304.2m).
8 CONTINGENT LIABILITIES
Whitbread PLC is a member of the Whitbread Group PLC VAT group. All members are jointly and severally liable for the VAT
liability. At the balance sheet date, the Group VAT liability amounted to £25.3m (2022: £7.3m).
Whitbread Annual Report and Accounts 2022/23
197
Strategic report Governance Financial statements Other information
9 RELATED PARTIES
Details of related undertakings are shown below:
Active related undertakings
Company name
Country of
incorporation Class of shares held
% of class
of shares
held by
the parent
company
% of class of
shares held
by the Group
(if different
from the
parent
company)
% of
nominal
value
(where
applicable)
AIRE HIEX Stuttgart Verwaltungs GmbH Germany
8
Ordinary EUR 50,000 – 100.0 100.0
Brickwoods Limited England
1
Ordinary £0.25 – 100.0 100.0
Duttons Brewery Limited England
1
Ordinary £1.00 – 100.0 100.0
Elm Hotel Holdings Limited England
1
Ordinary £0.10 – 100.0 100.0
Farringdon Scottish Partnership Scotland
2
N/A N/A N/A N/A
Healthy Retail Limited England
18
A ordinary £0.01 – 100.0 49.0
B ordinary £0.01 – – –
C ordinary £0.01 – – –
London Hotel Holdings Limited England
1
Ordinary £1.00 – 100.0 100.0
Milton (SC) 2 Limited Scotland
2
Ordinary £1.00 – 100.0 100.0
Milton (SC) Limited Scotland
2
Ordinary £1.00 – 100.0 100.0
Milton 1 Limited England
1
Ordinary £1.00 – 100.0 100.0
Moorgate Scottish Limited Partnership Scotland
2
N/A N/A N/A N/A
PI Hotels and Restaurants Ireland Limited Ireland
3
Ordinary EUR 1.00 – 100.0 100.0
Premier Inn (Bath Street) Limited Jersey
5
Ordinary £1.00 – 100.0 100.0
Premier Inn (Guernsey) Limited Guernsey
16
Ordinary £1.00 – 100.0 100.0
Premier Inn (Isle of Man) Limited Isle of Man
4
Ordinary £1.00 – 100.0 100.0
Premier Inn (Jersey) Limited Jersey
5
Ordinary £1.00 – 100.0 100.0
Premier Inn (UK) Limited England
1
Ordinary £1.00 – 100.0 100.0
Premier Inn AT Holding GmbH Austria
19
Ordinary EUR 35,000 – 100.0 100.0
Premier Inn AT Immobilienbesitz GmbH Austria
19
Ordinary EUR 35,000 – 100.0 100.0
Premier Inn AT Hotelbetriebsgesellschaft GmbH Austria
19
Ordinary EUR 35,000 – 100.0 100.0
Premier Inn Dortmund Königswall GmbH Germany
8
Ordinary EUR 25,000 – 100.0 100.0
Premier Inn Essen City Hauptbahnhof GmbH Germany
8
Ordinary EUR 25,000 – 100.0 100.0
Premier Inn Flensburg City GmbH Germany
8
Ordinary EUR 25,000 – 100.0 100.0
Premier Inn Frankfurt City Ostbahnhof GmbH Germany
8
Ordinary EUR 25,000 – 100.0 100.0
Premier Inn Frankfurt Eschborn GmbH Germany
8
Ordinary EUR 25,000 – 100.0 100.0
Premier Inn Glasgow Limited England
1
Ordinary £1.00 – 100.0 100.0
Premier Inn GmbH Germany
8
Ordinary EUR 25,000 – 100.0 100.0
Premier Inn Hamburg Nordanalstrasse GmbH Germany
8
Ordinary EUR 25,000 – 100.0 100.0
Premier Inn Holding GmbH Germany
8
Ordinary EUR 25,000 – 100.0 100.0
Premier Inn Hotel GmbH Germany
8
There are no classes of
shares. The total nominal
share capital amounts
to EUR 300.000 and is
divided into two shares,
one in the nominal
amount of EUR 275.000
and one in the nominal
amount of EUR 25.000
– 100.0 100.0
Premier Inn Hotels Limited England
1
Ordinary £1.00 – 100.0 100.0
Premier Inn Hotels LLC United Arab
Emirates
6
Ordinary AED 1,000 – 49.0 49.0
Premier Inn Hotels Qatar Qatar
7
Ordinary QAR 100.00 – 24.0 24.0
Premier Inn Immo 19 GmbH Germany
8
Ordinary EUR 25,000 – 100.0 100.0
Premier Inn Immo 20 GmbH Germany
8
Ordinary EUR 25,000 – 100.0 100.0
Premier Inn International Development Limited England
1
Ordinary £1.00 – 100.0 100.0
Premier Inn Manchester Airport Limited England
1
Ordinary £1.00 – 100.0 100.0
Premier Inn Manchester Trafford Limited England
1
Ordinary £1.00 – 100.0 100.0
Premier Inn Mannheim Quadrate T1 GmbH Germany
8
Ordinary EUR 25,000 – 100.0 100.0
Premier Inn München Frankfurter Ring GmbH Germany
8
Ordinary EUR 25,000 – 100.0 100.0
Premier Inn Ochre Limited England
1
Ordinary £1.00 – 100.0 100.0
Whitbread Annual Report and Accounts 2022/23
198
Notes to the Company financial statements continued
Company name
Country of
incorporation Class of shares held
% of class
of shares
held by
the parent
company
% of class of
shares held
by the Group
(if different
from the
parent
company)
% of
nominal
value
(where
applicable)
Premier Inn Rostock City Hafen GmbH Germany
8
Ordinary EUR 25,000 – 100.0 100.0
Premier Inn Verwaltungsgesellschaft Süd GmbH Germany
8
Ordinary EUR 50,000 – 100.0 100.0
Premier Inn Westminster Limited England
1
Ordinary £1.00 – 100.0 100.0
Premier Travel Inn India Limited England
1
Ordinary £1.00 – 100.0 100.0
PT. Whitbread Indonesia Indonesia
10
Ordinary USD 1.00 – 100.0 100.0
PTI Middle East Limited United Arab
Emirates
11
Ordinary AED 1,000 – 100.0 100.0
Silk Street Hotels Limited England
1
Deferred £1.00 – 100.0 99.1
Ordinary USD 0.01 – 100.0 0.1
St Andrews Homes Limited England
1
Ordinary £1.00 – 100.0 100.0
Swift Hotels Limited England
1
Ordinary £1.00 – 100.0 99.9
Preference £5.00 – 100.0 0.1
T.F. Ashe & Nephew Limited England
1
Deferred £1.00 – 100.0 99.9
Ordinary £0.01 – 100.0 0.1
UNA 312. Equity Management GmbH Germany
8
Ordinary EUR 25,000 – 100.0 100.0
UNA 352. Equity Management GmbH Germany
8
Ordinary EUR 25,000 – 100.0 100.0
Whitbread Asia Pacific Private Limited Singapore
12
Ordinary SGD 1.00 – 100.0 100.0
Whitbread East Pennines Limited England
1
Ordinary £1.00 – 100.0 100.0
Whitbread Group PLC England
1
Ordinary £0.25 100 – 50.0
A ordinary £0.25 100 – 50.0
Whitbread Hotel Company Limited England
1
Ordinary £0.10 – 100.0 100.0
Whitbread International Sourcing Business
Services (Shanghai) Co., Ltd
China
9
Ordinary RMB 1.00 – 100.0 100.0
Whitbread Properties Limited England
1
5% non-cumulative
preference £0.50
– 100.0 24.9
7% non-cumulative
preference £0.25
– 100.0 16.4
Ordinary £0.175 – 100.0 58.7
Whitbread West Pennines Limited England
1
Ordinary £1.00 – 100.0 100.0
WHRI Development DMCC United Arab
Emirates
13
Ordinary AED 1,000 – 100.0 100.0
WHRI Holding Company Limited England
1
Ordinary £1.00 – 100.0 100.0
Dormant related undertakings
Company name
Country of
incorporation Class of shares held
% of class
of shares
held by
the parent
company
% of class of
shares held
by the Group
(if different
from the
parent
company)
% of
nominal
value
(where
applicable)
Advisebegin Limited England
1
Ordinary £1.00 – 100.0 100.0
Alastair Campbell & Company Limited Scotland
15
Ordinary £1.00 – 100.0 100.0
Archibald Campbell Hope & King Limited Scotland
15
Ordinary £1.00 – 100.0 100.0
Autumn Days Limited England
1
Ordinary £1.00 – 100.0 100.0
Belgrave Hotel Limited England
1
Ordinary £1.00 – 100.0 100.0
Belstead Brook Manor Hotel Limited England
1
Ordinary £1.00 – 100.0 100.0
Brewers Fayre Limited England
1
Ordinary £1.00 – 100.0 100.0
Britannia Inns Limited England
1
Ordinary £1.00 – 100.0 100.0
Broughton Park Hotel Limited England
1
Ordinary £1.00 – 100.0 100.0
Carpenters of Widnes Limited England
1
Ordinary £0.01 – 100.0 100.0
Deferred ordinary £1.00 – 100.0 100.0
9 RELATED PARTIES CONTINUED
Active related undertakings continued
Whitbread Annual Report and Accounts 2022/23
199
Strategic report Governance Financial statements Other information
9 RELATED PARTIES CONTINUED
Dormant related undertakings continued
Company name
Country of
incorporation Class of shares held
% of class
of shares
held by
the parent
company
% of class of
shares held
by the Group
(if different
from the
parent
company)
% of
nominal
value
(where
applicable)
Cherwell Inns Limited England
1
A ordinary non-voting
£1.00
– 100.0 66.7
Ordinary £1.00 – 100.0 33.3
Chiswell Overseas Limited England
1
Ordinary £1.00 – 100.0 100.0
Chiswell Properties Limited England
1
Ordinary £1.00 – 100.0 100.0
Churchgate Manor Hotel Limited England
1
Ordinary £1.00 – 100.0 100.0
Country Club Hotels Limited England
1
Ordinary £1.00 – 100.0 100.0
Cromwell Hotel (Stevenage) England
1
Ordinary £1.00 – 100.0 100.0
Cymric Hotel Company Limited England
1
Ordinary £1.00 – 100.0 100.0
Danesk Limited Scotland
14
Ordinary £1.00 – 100.0 100.0
David Williams (Builth) Limited England
1
Ordinary £1.00 – 100.0 100.0
Dealend Limited England
1
Ordinary £1.00 – 100.0 100.0
Delamont Freres Limited England
1
Ordinary £1.00 – 100.0 100.0
Delaunay Freres Limited England
1
Ordinary £1.00 – 100.0 100.0
Dome Restaurants Limited England
1
Ordinary £1.00 – 100.0 100.0
Dragon Inns and Restaurants Limited England
1
Ordinary £1.00 – 100.0 100.0
Dukes Head 1988 Limited England
1
B ordinary £1.00 – 100.0 100.0
W ordinary £1.00 – 100.0 100.0
E. Lacon & Co., Limited England
1
Ordinary £1.00 – 100.0 100.0
E.B. Holdings Limited England
1
Ordinary £1.00 – 100.0 100.0
Evan Evans Bevan Limited England
1
Ordinary £1.00 – 100.0 100.0
Finite Hotel Systems Limited England
1
A ordinary £1.00 – 100.0 50.0
B ordinary £1.00 – 100.0 50.0
Fleet Wines & Spirits Limited England
1
Ordinary £1.00 – 100.0 100.0
Forest of Arden Golf and Country Club Limited England
1
Ordinary £1.00 – 100.0 100.0
Gable Care Limited England
1
Ordinary £1.00 – 100.0 100.0
Goodhews (Castle) England
1
A ordinary £1.00 – 100.0 51.0
Ordinary £1.00 – 100.0 49.0
Goodhews (Holdings) Limited England
1
A ordinary £1.00 – 100.0 42.2
B ordinary £1.00 – 100.0 42.2
C ordinary £1.00 – 100.0 15.6
Goodhews (Inns) England
1
Ordinary £1.00 – 100.0 100.0
Goodhews (Restaurants) England
1
Ordinary £1.00 – 100.0 100.0
Goodhews B. & S. Limited England
1
Ordinary £1.00 – 100.0 100.0
Goodhews Enterprises England
1
Ordinary £1.00 – 100.0 100.0
Goodhews Limited England
1
Ordinary £1.00 – 100.0 100.0
Gough Brothers Limited England
1
Deferred ordinary £.0.20 – 100.0 97.6
Ordinary £0.20 – 100.0 2.4
Grosvenor Leisure Limited England
1
Ordinary £1.00 – 100.0 100.0
Hammock Limited England
1
Ordinary £1.00 – 100.0 100.0
Hart & Co., (Boats) Limited England
1
1% non-cumulative
preference £1.00
– 100.0 99.0
Ordinary £1.00 – 100.0 1.0
1% non-cumulative
preference £0.01
– 100.0 –
Harveys Leisure Promotions Limited England
1
A ordinary £1.00 – 100.0 70.0
B ordinary £1.00 – 100.0 30.0
Hunter & Oliver Limited England
1
Ordinary £1.00 – 100.0 100.0
J. Burton (Warwick) Limited England
1
Ordinary £1.00 – 100.0 100.0
J. J. Norman and Ellery Limited England
1
Ordinary £1.00 – 100.0 100.0
Whitbread Annual Report and Accounts 2022/23
200
Notes to the Company financial statements continued
Company name
Country of
incorporation Class of shares held
% of class
of shares
held by
the parent
company
% of class of
shares held
by the Group
(if different
from the
parent
company)
% of
nominal
value
(where
applicable)
James Bell and Company Limited England
1
Deferred ordinary £0.25 – 100.0 96.2
Ordinary £0.01 – 100.0 3.8
Jestbread Limited England
1
Ordinary £1.00 – 100.0 100.0
Kingsmills Hotel Company Limited Scotland
17
Ordinary £1.00 – 100.0 100.0
Lambtons Ale Limited England
1
Ordinary £1.00 – 100.0 100.0
Latewise Limited England
1
Ordinary £1.00 – 53.4 53.4
Lawnpark Limited England
1
Ordinary £1.00 – 100.0 100.0
Leisure and Retail Resources Limited England
1
Ordinary £1.00 – 99.6 99.6
Lloyds Avenue Catering Limited England
1
3% non-cumulative
preference £1.00
– 100.0 50.0
Ordinary £1.00 – 100.0 50.0
London International Hotel Limited England
1
Ordinary £1.00 – 100.0 100.0
Lorimer & Clark, Limited Scotland
15
Ordinary £1.00 – 100.0 100.0
Mackeson & Company Limited England
1
Ordinary £1.00 – 100.0 100.0
Mackies Wine Company Limited England
1
Ordinary £1.00 – 100.0 100.0
Maredrove Limited England
1
Ordinary £1.00 – 100.0 100.0
Marine Hotel Porthcawl Limited England
1
Ordinary £1.00 – 100.0 100.0
Marlow Catering Limited England
1
Ordinary £1.00 – 100.0 100.0
Meon Valley Golf and Country Club Limited England
1
Ordinary £1.00 – 100.0 100.0
Milton 2 Limited England
1
Ordinary £1.00 – 100.0 100.0
Morans of Bristol Limited England
1
Ordinary £1.00 – 100.0 100.0
Morris’s Wine Stores Limited England
1
Ordinary £1.00 – 100.0 5.4
5.6% non-cumulative
preference £1.00
– 100.0 94.6
New Clapton Stadium Company Limited England
1
Ordinary £0.05 – 100.0 100.0
Norseman Lager Limited England
1
Ordinary £1.00 – 100.0 100.0
Pacific Caledonian Properties Limited Scotland
14
Ordinary £1.00 – 100.0 100.0
Percheron Properties Limited England
1
Ordinary £1.00 – 100.0 100.0
Peter Dominic Limited England
1
Ordinary £1.00 – 100.0 100.0
PI Hotels York Limited England
1
Ordinary £1.00 – 100.0 100.0
Piquant Caterers Limited England
1
Ordinary £1.00 – 100.0 100.0
Pizzaland Limited England
1
Ordinary £1.00 – 100.0 100.0
Premier Inn Kier Limited England
1
A ordinary £1.00 – – –
B ordinary £1.00 – 100.0 50.0
Premier Inn Limited England
1
Ordinary £1.00 – 100.0 100.0
Premier Inn Troon Limited England
1
Ordinary £1.00 – 100.0 100.0
Priory Leisure Limited England
1
Ordinary £1.00 – 100.0 100.0
R.C. Gough and Co. Limited England
1
Ordinary £1.00 – 100.0 100.0
Raybain (Northern) Limited England
1
Ordinary £1.00 – 100.0 100.0
Raybain (Wine Bars) Limited England
1
Ordinary £1.00 – 100.0 100.0
Respotel Limited England
1
Ordinary £1.00 – 100.0 100.0
Rhymney Breweries Limited England
1
Ordinary £1.00 – 100.0 100.0
S & S Property Limited England
1
Ordinary £1.00 – 100.0 100.0
S.H. Ward & Company Limited England
1
Ordinary £1.00 – 100.0 100.0
Salford Automatics Limited England
1
Ordinary £1.00 – 100.0 100.0
Scorechance 1 Limited England
1
Ordinary £1.00 – 100.0 100.0
Scorechance 12 Limited England
1
Ordinary £1.00 – 100.0 100.0
Scorechance 17 Limited England
1
Ordinary £1.00 – 100.0 100.0
Scorechance 25 Limited England
1
Ordinary £1.00 – 100.0 100.0
9 RELATED PARTIES CONTINUED
Dormant related undertakings continued
Whitbread Annual Report and Accounts 2022/23
201
Strategic report Governance Financial statements Other information
9 RELATED PARTIES CONTINUED
Dormant related undertakings continued
Company name
Country of
incorporation Class of shares held
% of class
of shares
held by
the parent
company
% of class of
shares held
by the Group
(if different
from the
parent
company)
% of
nominal
value
(where
applicable)
Scorechance 8 Limited England
1
Ordinary £1.00 – 100.0 100.0
Sheffield Automatics Limited England
1
Ordinary £1.00 – 100.0 100.0
Shewell Limited England
1
Ordinary £1.00 – 100.0 100.0
Silk Street Hotel Liverpool Limited England
1
Ordinary £1.00 – 100.0 100.0
Small & Co. (Engineering) Limited England
1
Ordinary £1.00 – 100.0 100.0
Small & Co. Limited England
1
7% cumulative
preference £1.00
– 100.0 0.7
Ordinary £1.00 – 100.0 99.3
Spring Soft Drinks Limited England
1
Ordinary £1.00 – 100.0 100.0
Sprowston Manor Hotel Limited England
1
Ordinary £1.00 – 100.0 100.0
Square October 1 Limited England
1
Ordinary £1.00 – 100.0 100.0
Square October 2 Limited England
1
Ordinary £1.00 – 100.0 100.0
Square October 3 Limited England
1
Ordinary £1.00 – 100.0 100.0
St Andrews Homes (1995) Limited England
1
Ordinary £1.00 – 100.0 100.0
St Martins Care Homes Investments Limited England
1
Ordinary £1.00 – 100.0 100.0
Stoneshell Limited England
1
Ordinary £1.00 – 100.0 100.0
Stripe Travel Inn Limited England
1
Ordinary £1.00 – 100.0 100.0
Strong and Co. of Romsey Limited England
1
Ordinary £1.00 – 100.0 100.0
Summerfields Care Limited England
1
Ordinary £1.00 – 100.0 100.0
Sun Taverns Limited England
1
Ordinary £1.00 – 100.0 100.0
Sweetings (Chop House) Limited England
1
Ordinary £1.00 – 100.0 100.0
Swift (Lurchrise) Limited England
1
Ordinary £1.00 – 100.0 100.0
Swift Hotels (1995) Limited England
1
Ordinary £1.00 – 100.0 100.0
Swift Hotels (Management) Limited England
1
Ordinary £1.00 – 100.0 100.0
Swift Inns and Restaurants Limited England
1
Ordinary £1.00 – 100.0 100.0
Swift Profit Sharing Scheme Trustees Limited England
1
Ordinary £1.00 – 100.0 100.0
Swift Quest Limited England
1
Ordinary £1.00 – 100.0 100.0
Swingbridge Hotel Limited England
1
Ordinary £1.00 – 100.0 100.0
Tewkesbury Park Golf and Country Club Limited England
1
Ordinary £1.00 – 100.0 100.0
The Barcave Group Limited England
1
7% cumulative
preference £1.00
– 100.0 90.9
Ordinary £1.00 – 100.0 9.1
The Dominic Group Limited England
1
Ordinary £1.00 – 100.0 100.0
The Four Seasons Hotel Investments Limited England
1
8% cumulative
preference A £1.00
– 100.0 33.0
8% cumulative
preference B £1.00
– 100.0 28.1
Ordinary £1.00 – 100.0 30.2
Preferred ordinary £1.00 – 100.0 8.8
The Four Seasons Hotel Investments
Management Limited
England
1
Ordinary £1.00 – 100.0 100.0
The Four Seasons Hotel Limited England
1
Ordinary £1.00 – 100.0 100.0
The Oyster Spa Company Limited England
1
Ordinary £1.00 – 100.0 100.0
The Portsmouth and Brighton United
Breweries, Limited
England
1
Ordinary £0.25 – 100.0 100.0
Thomas Wethered & Sons Limited England
1
Ordinary £1.00 – 100.0 100.0
Threlfalls (Liverpool & Birkenhead) Limited England
1
Ordinary £1.00 – 100.0 100.0
Threlfalls (Salford) Limited England
1
Ordinary £1.00 – 100.0 100.0
Whitbread Annual Report and Accounts 2022/23
202
Notes to the Company financial statements continued
Company name
Country of
incorporation Class of shares held
% of class
of shares
held by
the parent
company
% of class of
shares held
by the Group
(if different
from the
parent
company)
% of
nominal
value
(where
applicable)
Trentrise Limited England
1
Ordinary £1.00 – 100.0 100.0
Uncle Sam’s Limited England
1
Ordinary £1.00 – 100.0 100.0
Virlat Limited England
1
Ordinary £1.00 – 100.0 100.0
W. M. Darley, Limited England
1
Ordinary £1.00 – 100.0 49.8
Preference £1.00 – 100.0 49.8
Preferred ordinary £0.01 – 100.0 0.4
W. R. Wines Limited England
1
Deferred £1.00 – 100.0 99.0
Ordinary £0.01 – 100.0 1.0
West Country Breweries Limited England
1
Ordinary £1.00 – 100.0 100.0
Wentworth Guarantee Company Limited England
1
N/A N/A N/A N/A
Wheeler Gate Limited England
1
Ordinary £1.00 – 100.0 100.0
Whitbread (Condor) Holdings Limited England
1
Ordinary £0.0001 – 100.0 100.0
Whitbread (G.C.) Limited England
1
Ordinary £1.00 – 100.0 100.0
Whitbread Company Two Limited England
1
Ordinary £1.00 – 100.0 100.0
Whitbread Developments Limited England
1
Ordinary £1.00 – 100.0 100.0
Whitbread Devon Limited England
1
Ordinary £1.00 – 100.0 100.0
Whitbread Directors 1 Limited England
1
Ordinary £0.05 – 100.0 100.0
Whitbread Directors 2 Limited England
1
Ordinary £1.00 – 100.0 100.0
Whitbread Dunstable Limited England
1
Ordinary £1.00 – 100.0 100.0
Whitbread Enterprise Centre Limited England
1
Ordinary £1.00 – 100.0 100.0
Whitbread Finance PLC England
1
Ordinary £1.00 – 100.0 100.0
Whitbread Fremlins Limited England
1
Ordinary £1.00 – 100.0 100.0
Whitbread Golf and Country Club Limited England
1
5% non-cumulative
preference £1.00
– 100.0 45.0
A ordinary £1.00 – 100.0 55.0
Whitbread Golf Club Limited England
1
Ordinary £1.00 – 100.0 100.0
Whitbread Guarantee Company Two Limited England
1
N/A N/A N/A N/A
Whitbread Healthcare Trustees Limited England
1
Ordinary £1.00 – 100.0 100.0
Whitbread Hotel (Bournemouth) Limited England
1
Ordinary £0.05 – 100.0 100.0
Whitbread Hotels (Management) Limited England
1
Deferred £1.00 – 100.0 100.0
USD 0.01 – 100.0 –
Whitbread International Limited England
1
Ordinary £1.00 – 100.0 100.0
Whitbread International Trading Limited England
1
Ordinary £0.25 – 100.0 100.0
Whitbread Investment Company Limited England
1
Ordinary £1.00 – 100.0 100.0
Whitbread Investment Company Securities
Limited
England
1
Ordinary £1.00 – 100.0 100.0
Whitbread London Limited England
1
Ordinary £1.00 – 100.0 100.0
Whitbread Nominees Limited England
1
Ordinary £1.00 – 100.0 100.0
Whitbread Pension Trustee Directors
Company Limited
England
1
N/A N/A N/A N/A
Whitbread Pension Trustees England
1
Ordinary £1.00 – 100.0 100.0
Whitbread Pub and Bars Limited England
1
Ordinary £1.00 – 100.0 100.0
Whitbread Pub Partnership Limited England
1
Ordinary £1.00 – 100.0 100.0
Whitbread Pub Restaurants Business Limited England
1
Ordinary £1.00 – 100.0 100.0
Whitbread Quest Trustee Limited England
1
Ordinary £1.00 – 100.0 100.0
Whitbread Restaurants (Australia) Limited England
1
Ordinary £1.00 – 100.0 –
Ordinary £0.56 – 100.0 100.0
Whitbread Restaurants Limited England
1
Ordinary £1.00 – 100.0 100.0
9 RELATED PARTIES CONTINUED
Dormant related undertakings continued
Whitbread Annual Report and Accounts 2022/23
203
Strategic report Governance Financial statements Other information
Company name
Country of
incorporation Class of shares held
% of class
of shares
held by
the parent
company
% of class of
shares held
by the Group
(if different
from the
parent
company)
% of
nominal
value
(where
applicable)
Whitbread Scotland Limited Scotland
14
Ordinary £1.00 – 100.0 100.0
Whitbread Secretaries Limited England
1
Ordinary £0.05 – 100.0 50.0
4% preference £0.05 – 100.0 50.0
Whitbread Share Ownership Trustees Limited England
1
N/A N/A N/A N/A
Whitbread Spa Company Limited England
1
Ordinary £1.00 – 100.0 100.0
Whitbread Sunderland (1995) Limited England
1
Ordinary £1.00 – 100.0 100.0
Whitbread Sunderland 2 Limited England
1
Ordinary £1.00 – 100.0 57.0
5.6% non-cumulative
preference £1.00
– 100.0 43.0
Whitbread Sunderland Limited England
1
Ordinary £5.00 – 100.0 50.0
Preference £5.00 – 100.0 50.0
Whitbread Trafalgar Properties Limited England
1
A ordinary £1.00 – 100.0 50.0
B ordinary £1.00 – 100.0 50.0
Whitbread UK Limited England
1
Ordinary £1.00 – 100.0 100.0
Whitbread Wales Limited England
1
Ordinary £1.00 – 100.0 100.0
Whitbread Wessex Limited England
1
Ordinary £1.00 – 100.0 100.0
White Cross Films Limited England
1
Ordinary £1.00 – 100.0 100.0
Wiggin Tree Limited England
1
Ordinary £1.00 – 100.0 100.0
Willhouse Limited England
1
Deferred £1.00 – 100.0 50.0
Q ordinary £1.00 – 100.0 25.0
W ordinary £1.00 – 100.0 25.0
William Overy Crane Hire Limited England
1
Ordinary £1.00 – 100.0 100.0
The registered office of the above companies is as follows:
1 Whitbread Court, Houghton Hall Business Park, Porz Avenue, Dunstable, Beds, LU5 5XE.
2 4th Floor, Saltire Court, 20 Castle Terrace, Edinburgh, EH1 2EN.
3 3rd Floor, Kilmore House, Park Lane, Spencer Dock, Dublin 1, Ireland.
4 2nd Floor, St Mary’s Court, 20 Hill Street, Douglas, IM1 1EU, Isle of Man.
5 4th Floor, St Paul’s Gate, 22-24 New Street, St Helier, JE1 4TR, Jersey.
6 Ground Floor, Premier Inn Dubai Investment Park, P.O. Box 35118, Dubai, United Arab Emirates.
7 3rd Floor, Tornado Towers, PO Box 34040, Doha, Qatar.
8 Messeturm (12th Floor), Friedrich-Ebert-Anlage 49, 60308 Frankfurt am Main, Germany.
9 Room 742, 968 West Beijing Road, Jing’an District, Shanghai, China.
10 Gandaria 8 Office Tower, 19th Floor Unit A1, Jalan Sultan Iskandarmuda, Kebayoran Lama, 12240, Indonesia.
11 TMF Services B.V., Nassima Tower, Office 1401, Sheikh Zayed Road, PO Box 213975, Dubai, United Arab Emirates.
12 38 Beach Road, 29-11 South Beach Tower, Singapore 189767, Singapore.
13 Almas 6C, Almas Tower, Jumeirah Lake Towers, Dubai, United Arab Emirates.
14 4th Floor, 115 George Street, Edinburgh, EH2 4JN, Scotland.
15 The Royal Scot Hotel, 111 Glasgow Road, Edinburgh, EH12 8NF, Scotland.
16 11 New St, Guernsey GY1 3EG, Guernsey.
17 Swallow Royal Scot Hotel, Glasgow Road, Edinburgh, EN12 8NF, Scotland.
18 100 Moorgate, London, England, EC2M 6AB.
19 Hegelgasse 13, 1010 Wien, Austria.
9 RELATED PARTIES CONTINUED
Dormant related undertakings continued
Whitbread Annual Report and Accounts 2022/23
204
Notes to the Company financial statements continued
Adjusted property rent
Total property rent less a proportion of
contingent rent.
Basic earnings per share
(basicEPS)
Profit attributable to the parent
shareholders divided by the weighted
average number of ordinary shares in
issue during the year after deducting
treasury shares and shares held by
anindependently managed share
ownership trust (ESOT).
Committed pipeline
Sites where the Group has a legal
interest in a property (thatmay be
subject to planning/other conditions)
with the intention of opening a hotel in
the future.
Direct bookings/distribution
Based on stayed bookings in the
financial year made direct tothe Premier
Inn website, Premier Inn app, Premier Inn
customer contact centre or hotel
frontdesks.
Food and beverage (F&B) sales
Food and beverage revenue from all
Whitbread owned restaurants and
integrated hotel restaurants.
GOSH Charity
Great Ormond Street Hospital
Children’sCharity.
IFRS
International Financial
ReportingStandards.
Lease debt
Eight times adjusted property rent.
Occupancy
Number of hotel bedrooms occupied by
guests expressed asapercentage of the
number of bedrooms available in
theperiod.
Operating profit
Profit before net finance costs and tax.
OTAs
Online travel agents.
Property rent
IFRS 16 property lease interest and
depreciation plus variable lease
payments, adjusted for deferred rental
amounts. This is used as a proxy for rent
expense as recorded under IAS 17 in
arriving at funds from operations.
Rent expense
Rental costs recognised in the income
statement prior to the adoption of
IFRS16.
Team retention
The number of permanent new starters
that we retain for the first 90 days/
threemonths.
Trading site
A joint hotel and restaurant or a
standalone hotel or restaurant.
WINcard
Whitbread In Numbers – balanced
scorecard to measure progress against
key performance targets.
YourSay
Whitbread’s annual employee opinion
survey to provide insight into the views
of employees.
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
205
Glossary
We use a range of measures to monitor the financial performance of the Group. These measures include both statutory
measures in accordance with IFRS and alternative performance measures (APMs) which are consistent with the way that the
business performance is measured internally.
APMs are not defined by IFRS and therefore may not be directly comparable with similarly titled measures reported by other
companies. APMs should be considered in addition to, and are not intended to be a substitute for, or superior to, IFRS measures.
APM
Closest equivalent
IFRSmeasure
Adjustments to
reconcile to IFRS
measure Definition and purpose
Revenue measures
Accommodation
sales
Revenue Exclude non-room
revenue such as
food andbeverage
Premier Inn accommodation revenue excluding non-room income such
as food and beverage. The growth in accommodation sales on a
year-on-year basis is a good indicator of the performance of the
business.
Reconciliation: Note 3
Average room
rate (ARR)
No direct
equivalent
Refer to definition Accommodation sales divided by the number of rooms occupied by
guests. The directors consider this to be a useful measure as this is a
commonly used industry metric which facilitates comparison
betweencompanies.
RECONCILIATION 2022/23 2021/22
UK Accommodation sales (£m) 1,795.0 1,157.8
Number of rooms occupied by guests ('000) 24,984 20,430
UK AVERAGE ROOM RATE (£) 71.84 56.67
Germany Accommodation sales (£m) 100.1 29.1
Number of rooms occupied by guests ('000) 1,606 718
GERMANY AVERAGE ROOM RATE (£) 62.36 40.53
UK like-for-like
revenue growth
Movement in
accommodation
sales per the
segment
information
(Note3)
Accommodation
sales from non
like-for-like
Year over year change in revenue for outlets open for at least one year.
Thedirectors consider this to be a useful measure as it is a commonly
usedperformance metric and provides an indication of underlying
revenuetrends.
RECONCILIATION 2022/23 2021/22
UK like-for-like revenue growth 50.0% 189.8%
Contribution from net new hotels 5.0% 8.2%
UK ACCOMMODATION SALES GROWTH 55.0% 198.0%
Three-year UK
like-for-like
revenue growth
Movement in
accommodation
sales per
segment
information
(Note 3)
Accommodation
sales from non
like-for-like
Change in revenue for outlets open for at least three years. This is a
temporary measure introduced to provide a comparison between the
current year and the comparative period before the impact of the
COVID-19 pandemic.
RECONCILIATION 2022/23 2021/22
UK like-for-like revenue growth 26.5% (15.5%)
Contribution from net new hotels 10.4% 3.8%
UK ACCOMMODATION SALES GROWTH 36.9% (11.7%)
Revenue per
available room
(RevPAR)
No direct
equivalent
Refer to definition Revenue per available room is also known as ‘yield’. This hotel measure
is achieved by dividing accommodation sales by the number of rooms
available. The directors consider this to be a useful measure as it is a
commonly used performance measure in the hotel industry.
RECONCILIATION 2022/23 2021/22
UK Accommodation sales (£m) 1,795.0 1,157.8
Available rooms ('000) 30,193 29,928
UK REVPAR (£) 59.45 38.69
Germany Accommodation sales (£m) 100.1 29.1
Available rooms ('000) 2,703 1,765
GERMANY REVPAR (£) 37.04 16.49
Whitbread Annual Report and Accounts 2022/23
206
Alternative performance measures
APM
Closest equivalent
IFRSmeasure
Adjustments to
reconcile to IFRS
measure Definition and purpose
Income statement measures
Adjusted
1
operating profit/
loss
Profit/loss
before tax
Adjusting items
(Note 6), finance
income/costs
(Note 8)
Profit/loss before tax, finance costs/income and adjusting items.
Reconciliation: Consolidated income statement
Adjusted
1
tax
Tax expense/
credit
Adjusting items
(Note 6)
Tax charge/credit before adjusting items.
Reconciliation: Consolidated income statement
Adjusted
1
profit/
loss before tax
Profit/loss
before tax
Adjusting items
(Note 6)
Profit/loss before tax and adjusting items.
Reconciliation: Consolidated income statement
Adjusted
1
basic
EPS
Basic EPS Adjusting items
(Note 6)
Adjusted profit attributable to the parent shareholders divided by the
basic weighted average number of ordinary shares in issue during the
year after deducting treasury shares and shares held by an
independently managed share ownership trust (ESOT).
Reconciliation: Note 11
Cohort of
established
German hotels
adjusted
1
profit
before tax
Germany
adjusted loss
before tax
Refer to definition Germany adjusted loss before tax for the cohort of established German
hotels, those defined as open and trading for more than 12 months as
atthe beginning of the financial year. This excludes administration and
overhead costs. The directors consider this to be a useful measure
toassess the performance of the established hotels operating
withinGermany.
RECONCILIATION
2022/23
£m
Germany adjusted loss before tax (Note 3) (49.7)
Loss for hotels open and trading for less than 12 months from
beginning of the financial year 27.9
Administration and overhead costs 26.2
ESTABLISHED GERMAN HOTELS ADJUSTED PROFIT
BEFORE TAX 4.4
ALLOCATION OF GERMAN SEGMENT HOTELS 2022/23
Established German hotels 18
Hotels open and trading for less than 12 months from
beginning of the financial year
2
33
GERMAN SEGMENT HOTELS 51
Profit margin No direct
equivalent
Refer to definition Segmental adjusted profit before tax divided by segmental adjusted
revenue, to demonstrate profitability margins of the segmental operations.
Reconciliation: Strategic report
Balance sheet measures
Net cash/debt Total liabilities
from financing
activities
Exclude lease
liabilities and
derivatives held to
hedge financing
activities
Cash and cash equivalents after deducting total borrowings. The
directors consider this to be a useful measure of the financing position
of the Group.
Reconciliation: Note 21
Adjusted net
cash/debt
Total liabilities
from financing
activities
Exclude lease
liabilities and
derivatives heldto
hedge financing
activities. Includes
an adjustment for
cash assumed by
ratings agencies
to notbe readily
available
Net cash/debt adjusted for cash, assumed by ratings agencies to not be
readily available. The directors consider this to be a useful measure as it
is aligned with the method used by ratings agencies to assess the
financing position of the Group.
RECONCILIATION
2022/23
£m
2021/22
£m
Net cash (171.4) (140.5)
Restricted cash adjustment 10.0 10.0
ADJUSTED NET CASH (161.4) (130.5)
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
207
APM
Closest equivalent
IFRSmeasure
Adjustments to
reconcile to IFRS
measure Definition and purpose
Lease-adjusted
net debt/cash
Total liabilities
from financing
activities
Exclude lease
liabilities and
derivatives held to
hedge financing
activities. Includes
an adjustment for
cash assumed by
ratings agencies
to not be readily
available
This measure has been changed to align to Fitch methodology post
IFRS16. Adjusted net debt plus lease debt. The directors consider this to
be a useful measure as it forms the basis of the Group’s leverage targets.
RECONCILIATION
2022/23
£m
2021/22
£m
Adjusted net cash (161.4) (130.5)
Lease debt 2,436.0 2,250.3
LEASE-ADJUSTED NET DEBT 2,274.6 2,119.8
Net debt/cash
and lease
liabilities
Cash and cash
equivalents less
total liabilities
from financing
activities
Refer to definition Net debt/cash plus lease liabilities. The directors consider this to be a
useful measure of the financing position of the Group.
RECONCILIATION
2022/23
£m
2021/22
£m
Net cash (171.4) (140.5)
Lease liabilities 3,958.4 3,701.8
NET DEBT AND LEASE LIABILITIES 3,787.0 3,561.3
Cash flow measures
Discretionary
free cash flow
Cash generated
from operations
Refer to definition Cash generated from operations after payments for interest, tax,
payment of principal of lease liabilities and maintenance capital
expenditure. The directors consider this to be a useful measure as it is
a good indicator of the cash generated which is available to fund future
growth or shareholder returns.
Reconciliation: CFO’s review
Funds from
operations
(FFO)
Net cash flows
from operating
activities
Refer to definition This measure has been changed to align to Fitch methodology post
IFRS16. Net cash flows from operating activities after adding back
working capital movements, cash interest and interest on lease liabilities.
RECONCILIATION
2022/23
£m
2021/22
£m
Net cash flow from operations 799.9 508.7
Working capital movements (98.9) (182.5)
Cash interest 9.4 18.0
Interest on lease liabilities 138.7 133.2
FUNDS FROM OPERATIONS 849.1 477.4
Lease-adjusted
net debt to FFO
No direct
equivalent
Refer to definition This measure has been changed to align to Fitch methodology post
IFRS16. Ratio of lease-adjusted net debt compared with FFO.
RECONCILIATION
2022/23
£m
2021/22
£m
Lease-adjusted net debt 2,274.6 2,119.8
Funds from operations 849.1 477.4
LEASE-ADJUSTED NET DEBT TO FFO 2.7x 4.4x
Whitbread Annual Report and Accounts 2022/23
208
Alternative performance measures continued
APM
Closest equivalent
IFRSmeasure
Adjustments to
reconcile to IFRS
measure Definition and purpose
Adjusted
1
operating cash
flow
Cash generated
from operations
Refer to definition Adjusted operating profit/loss adding back depreciation and
amortisation and after IFRS 16 interest and lease repayments and
working capital movement. The directors consider this a useful measure
as it is a good indicator of the cash generated which is used to fund
future growth, shareholder returns, tax, pension and interest payments.
RECONCILIATION
2022/23
£m
2021/22
£m
Adjusted operating profit 543.5 153.3
Depreciation – right-of-use assets 165.8 148.1
Depreciation – property, plant and equipment 163.2 157.9
Amortisation 16.5 20.9
ADJUSTED EBITDA (POST-IFRS 16) 889.0 480.2
Interest paid – lease liabilities (138.7) (133.2)
Payment of principal of lease liabilities (133.9) (127.1)
Net lease incentives received 3.5 2.0
Movement in working capital 98.9 182.5
ADJUSTED OPERATING CASH FLOW 718.8 404.4
Cash capital
expenditure
(cash capex)
No direct
equivalent
Refer to definition Cash flows on property, plant and equipment and investment property
and investment in intangible assets, payments of deferred and
contingent consideration, and capital contributions or loans to
jointventures.
Other measures
Adjusted
1
EBITDA (post-
IFRS 16),
Adjusted
1
EBITDA (pre-
IFRS 16) and
Adjusted
1
EBITDAR
Operating
profit/loss
Refer to definition Adjusted EBITDA (post-IFRS 16) is profit before tax, adjusting items,
interest, depreciation and amortisation. Adjusted EBITDA (pre-IFRS 16)
is further adjusted to remove rent expense. Adjusted EBITDAR is profit
before tax, adjusting items, interest, depreciation, amortisation, variable
lease payments and rental income. The directors consider these
measures to be useful as they are commonly used industry metrics
which facilitate comparison between companies on a before and after
IFRS 16 basis.
RECONCILIATION
2022/23
£m
2021/22
£m
Adjusted operating profit 543.5 153.3
Depreciation – right-of-use assets 165.8 148.1
Depreciation – property, plant and equipment 163.2 157.9
Amortisation 16.5 20.9
ADJUSTED EBITDA (POST-IFRS 16) 889.0 480.2
Variable lease payment expense 2.1 0.3
Rental income (3.1) (7.9)
ADJUSTED EBITDAR 888.0 472.6
Rental expense, variable lease payments and
rentalincome (269.9) (230.7)
ADJUSTED EBITDA (PRE-IFRS 16) 618.1 241.9
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
209
APM
Closest equivalent
IFRSmeasure
Adjustments to
reconcile to IFRS
measure Definition and purpose
Return on
capital
employed
(ROCE)
No direct
equivalent
Refer to definition Adjusted operating profit/loss (pre-IFRS 16) for the year divided by net
assets at the balance sheet date, adding back net debt/cash, right-of-
use assets, lease liabilities, taxation assets/liabilities, the pension surplus/
deficit and derivative financial assets/liabilities, other financial liabilities
and IFRS 16 working capital adjustments. The directors consider this to
be a useful measure as it expresses the underlying operating efficiency
of the Group and is used as the basis for remuneration targets. A
comparative is not disclosed as this measure was not utilised during
those financial periods heavily impacted by COVID-19.
2022/23
RECONCILIATION
Total
£m
UK &
Ireland
£m
Adjusted operating profit 543.5
Depreciation – right-of-use assets 165.8
Rent expense (270.9)
ADJUSTED OPERATING PROFIT (PRE-IFRS 16) 438.4 477.6
Net assets 4,111.4
Net cash (171.4)
Current tax liabilities 4.6
Deferred tax liabilities 158.2
Pension surplus (324.7)
Derivative financial liabilities 7.8
Lease liabilities 3,958.4
Right-of-use assets (3,504.6)
IAS 17 rent adjustments (65.0)
ADJUSTED NET ASSETS 4,174.7 3,694.8
RETURN ON CAPITAL EMPLOYED 10.5% 12.9%
1 Adjusted measures of profitability represent the equivalent IFRS measures adjusted for specific items that we consider relevant for comparison of the Group’s business either
from one period to another or with similar businesses. We report adjusted measures because we believe they provide both management and investors with useful additional
information about the financial performance of the Group’s businesses.
2 Of these 33 hotels open and trading for less than 12 months from the beginning of the financial year, there are five hotels that were open for more than 12 months but
did not trade continuously for more than 12 months from the beginning of the financial year.
Whitbread Annual Report and Accounts 2022/23
210
Alternative performance measures continued
Useful contacts
Registrars
Link Group
10th Floor
Central Square
29 Wellington Street
Leeds LS1 4DL
The website address is www.linkgroup.eu
For enquiries regarding your
shareholding please telephone +44
(0)344 855 2327. Alternatively, you can
email: whitbread@linkgroup.co.uk
Registered office
Whitbread PLC
Whitbread Court
Houghton Hall Business Park
Porz Avenue
Dunstable
Bedfordshire LU5 5XE
General Counsel and Company
Secretary
Chris Vaughan
Managing your shareholdings
You can manage your shareholdings by
visiting www.whitbread-shares.com. This
is a secure online site whereyou can:
• sign up to receive shareholder
information by email;
• buy and sell shares via the Link Share
Dealing Service;
• view your holding and get an
indicative valuation; and
• change your personal details.
You will need to have your Investor Code
to hand. This can be found on the
following documentation:
• share certificate;
• dividend voucher; or
• proxy card.
Please ensure that you advise Link
promptly of any change ofaddress.
Share dealing service
1
For Link Share Dealing Services you can
telephone
+44 (0)371 664 0445. Calls are charged
at the standard geographic rate and will
vary by provider. Calls from outside the
United Kingdom will be charged at the
applicable international rate. Lines are
open between 8.00am and 4.30pm,
Monday to Friday excluding public
holidays in England and Wales.
Private shareholder
Private shareholders are shareholders
who hold their shares intheir own name
on the Company’s Register of Members.
They have full voting rights and have the
right to stipulate their communication
preferences and bank account
preferences on their own holding.
Nominee shareholder
Nominee shareholders are underlying
beneficial shareholders who hold their
shares through a nominee company. The
name of the nominee company will
appear on the Company’s Register of
Members. It will depend on the terms
and conditions of the nominee provider
as to whether underlying shareholders
receive copies of the annual general
meeting (AGM) documents and any
other Company documents that are
mailed. Dividend options may also be
restricted by the nominee. If underlying
shareholders wish to receive Company
mailings then they havethe right to
request to be put on the beneficial
holders’ information rights register,
which can be arranged via their nominee
provider.
Corporate Sponsored Nominee
We worked with Link to establish the
Whitbread Corporate Sponsored
Nominee (CSN). We did this because we
know thata number of shareholders
prefer not to hold their
sharesincertificated form, but still wish
to receive documents and benefits from
the Company. This has been raised by
shareholders at previous AGMs. The CSN
1 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.
Dividend diary 2023/24 (subject to confirmation)
Ex dividend for final dividend 25 May 2023
Record date for final dividend 26 May 2023
DRIP election 16 June 2023
Payment for final dividend 7 July 2023
Ex-dividend for interim dividend 9 November 2023
Record date for interim dividend 10 November 2023
DRIP election 24 November 2023
Payment for interim dividend 15 December 2023
allows shareholders to hold their
Whitbread shares via a nominee,
butalso allows Whitbread to have direct
access to the underlying register, such
that we can ensure that participants
receive the documents and benefits that
they request.
If you would like to hold your shares in
the new Whitbread CSN, please log on
to www.whitbread-shares.com. If you
have not registered before then you will
need your Investor Code. Your Investor
Code is located on your share certificate.
On the portal you will find further
information in relation to the Whitbread
CSN. The terms and conditions and
various transfer forms that you will need
to review and complete are located
there. If you need any assistance with
the forms or want any additional
support, please e-mail
custodymgt@linkgroup.co.uk outlining
what you would like to do and they will
email you back with the relevant
instructions.
Annual general meeting 2023
The AGM will take place at 2.00pm on
Thursday 24 June at Whitbread Court,
Porz Avenue, Dunstable LU5 5XE.
We want to give as many of our
shareholders the opportunity to attend
the meeting as possible and we therefore
intend to continue to offer the
opportunity to attend electronically so
that there is a choice as to how to attend.
32.65p
92.65p
2019/20
2018/19
59.10p
–
2021/22
2020/21
–2022/23
Dividend history
Strategic report Governance Financial statements Other information
Whitbread Annual Report and Accounts 2022/23
211
Shareholder services
Capital gains tax
For further information on:
• the market value of shares in the
Company as at 31 March1982;
• the reduction of capital on 10 May
2001; and
• the special dividend and share
consolidation in May 2005,
or if you require any further information
on capital gains tax allocations, please
refer to the investors’ section of the
Company’s website:
www.whitbread.co.uk
Dividend Reinvestment Plan
To reinvest your dividend, you will need
to sign up for the Dividend Reinvestment
Plan (the DRIP). The Terms and
Conditions of the DRIP and a
Shareholder Dividend Form are available
at www.whitbread-shares.com or can be
requested from Link Group. For
enquiries regarding the DRIP please
telephone +44 (0) 344 855 2327.
Dividend payments by BACS
We can pay your dividends directly 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 please ring the registrars on
+44 (0)344 855 2327.
Shareholder FAQs
Where can I find information about B
and C shares?
As outlined in the original circulars, the
Company made two separate purchase
offers for the B and C shares. There will
be no further purchase offers. The
Company does have the right to convert
the B and C shares to ordinary shares,
but there is no current intention to do
so. The B and C shares will continue to
attract an annual dividend payment.
How can I find the current share price?
You can keep up to date with the current
share price at the Company’s website:
www.whitbread.co.uk.
I have lost my share certificate, how can
I get a replacement?
If you have lost your certificate please
contact the Company’s registrars, Link
Group, on the shareholder helpline
+44(0)344 855 2327. They will be able
to assist you in arranging a replacement.
Am I entitled to shareholder benefits?
Shareholders with a holding of 64 shares
or more are eligible to receive a
shareholder benefits card. Those
shareholders who have previously
registered to receive the shareholder
benefits card should automatically have
received the card withthe Annual
Report and Accounts mailing.
Shareholders who wish to register for
acard can do so by contacting Link,
whose contact details are shown on
page 211
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. If you are a
resident in the UK and wish to stop
receiving unsolicited mail then you
should register with the Mailing
Preference Service; you can register
online: www.mpsonline.org.uk
Analysis of ordinary shares at 2 March 2023
Band Number of holders % of holders Number of shares % of share capital
1-100 18,570 55.24 639,380 0.30
101-200 5,092 15.15 741,717 0.35
201-500 5,184 15.42 1,669,907 0.78
501-1,000 2,325 6.91 1,630,250 0.76
1,001-2,000 1,095 3.26 1,505,047 0.70
2,001-5,000 547 1.63 1,682,919 0.78
5,001-10,000 187 0.56 1,322,772 0.62
10,001-50,000 305 0.91 7,261,501 3.38
50,001-100,000 87 0.26 6,451,229 3.01
100,001-500,000 149 0.44 35,018,620 16.32
500,001-1,000,000 34 0.10 25,349,607 11.82
1,000,001-5,000,000 39 0.12 74,224,907 34.60
5,000,001-10,000,000 3 0.01 20,315,685 9.47
10,000,001-50,000,000 3 0.01 36,722,012 17.12
TOTAL 33,620 214,535,553
Shareholder warning
Share and bond scams are often run
from ‘boiler rooms’ where fraudsters
cold-call investors offering them
worthless, overpriced or even non-
existent shares or bonds. Boiler rooms
use increasingly sophisticated tactics to
approach investors, offering to buy or
sell shares in a way that will bring a huge
return. But victims are often left out of
pocket – sometimes losing all of their
savings or even their family home. Even
seasoned investors have been caught
out, with the biggest individual loss
recorded by the police being £6m.
Shareholders are advised to be wary of
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 or organisation;
• check that they are properly
authorised by the FCA before getting
involved by visiting www.fca.org.uk
and contact the firm using the details
on the register;
• report the matter to the FCA either by
calling 0800 111 6768 or visit
www.fca.org.uk/scams;
• if the calls persist, hang up; and
• REMEMBER if it sounds too good to
be true, it probably is!
If you deal with an unauthorised firm,
you will not be eligible to receive
payment under the Financial Services
Compensation Scheme (FSCS) if things
go wrong.
The FCA can be contacted by
completing an online form at
www.fca.org.uk/scams or you can call
the FCA Consumer Helpline on 0800 111
6768 or Action Fraud 0300 123 2040
(www.actionfraud.police.uk).
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 FCA
website, www.fca.org.uk/consumers.
Whitbread Annual Report and Accounts 2022/23
212
Shareholder services continued
This publication has been manufactured
using 100% offshore wind electricity
sourced from UK wind.
100% of the inks used are vegetable oil
based, 95% of press chemicals are
recycled for further use and, on average
99% of any waste associated with this
production will be recycled and the
remaining 1% used to generate energy.
This document is printed on a mix of
Revive Silk, a white triple coated sheet,
manufactured from FSC® Recycled
certified fibre derived from 100% pre
and post-consumer waste and Accent
100% Recycled, manufactured using
100% recycled fibre, is FSC certified,
acid-free. Both papers are carbon
balanced at source
Design and production
www.luminous.co.uk
Printed by Park Communications, a
Carbon Neutral Company, on FSC®
certified paper.
Park works to the EMAS standard and its
Environmental Management System is
certified to ISO 14001.
Whitbread Court
Houghton Hall Business Park
Porz Avenue
Dunstable
Bedfordshire
LU5 5XE
www.whitbread.co.uk/investors