REST EASY WITH

PREMIER INN

Annual Report and

Accounts 2021/22

A focused hotel group

Whitbread has emerged from the COVID-19 pandemic in

aposition of strength, bouncing back strongly in the year

andreturning to profitability.

Our unique vertically integrated operating model gives us

a sustainable platform to outperform in the structurally

attractivemarkets in which we operate, built on our scale,

brandstrength, direct distribution and our leading customer

offering. We have a long track-record of generating a strong

return on capital for our shareholders, all the while staying

truetoour Force for Good ambitions.

Our trading momentum in the UK is strong, and we are rapidly

expanding our footprint in Germany. We enter the year ahead

inastrong position to succeed.

Our Force for Good sustainability programme

focuses on enabling people to live and work

well, whilst having a positive impact on the

worldaround us

Why we do it

Strategic report

2 Our business at a glance

4 Doing more for our people

6 Doing more for our guests

8 Doing more for the planet

10 Chairman's statement

12 Chief Executive's review

16 A clear investment proposition

20 Market review

22 Our business model

24 Our strategy at a glance

26 Strategy in action

30 Chief Financial Officer's review

34 Chief People Officer's review

36 Force for Good

48 Task Force on Climate-Related

FinancialDisclosures

50 Section 172 statement

51 Stakeholder engagement

55 Non-financial Information statement

56 Principal risks and uncertainties

61 Viability statement

Governance

62 Corporate governance at a glance

64 Corporategovernance

68 Board of Directors

70 Executive Committee

76 Culture at Whitbread

78 Q&A with non-executive

directorKalAtwal

80 Audit Committee report

84 Nomination Committee report

87 Remuneration Committee report

90 Remuneration at a glance

92 Directors' remuneration policy

101 Annual report on remuneration

112 Directors' report

118 Directors' responsibility statement

119 Assurance statement

121 Independent auditor's report

Consolidated accounts 2021/22

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 2021/22

193 Company balance sheet

194 Company statement of changes

inequity

195 Notes to the Company

financialstatements

Other information

206 Glossary

207 Alternative performance measures

211 Shareholder services

From booking to bed, we're here to help you

rest easy

https://www.premierinn.com/gb/en/home

INTRODUCTION

Whitbread Annual Report and Accounts 2021/22

FINANCIAL PERFORMANCE

Revenue

£1,703m

2020/21 £590m

UK Market share

10%

2020/21 11%

Adjusted operating

profit/(loss)†

£153m

2020/21 (£487m)

Statutory operating

profit/(loss)

£227m

2020/21 (£839m)

Operating cash and

cash equivalents

£1,132m

2020/21 £1,256m

Adjusted (loss)

before tax†

( £16m)

2020/21 (£635m)

Statutory profit/

(loss) before tax

£58 m

2020/21 (£1,007m)

Total cash

capexUK†

£171m

2020/21 £132m

Total cash capex

Germany†

£9 0m

2020/21 £99m

Adjusted basic

(loss)/earnings

pershare†

(2.5)p

2020/21 (287.6p)

Statutory basic

earnings/(loss)

pershare

21.1p

2020/21 (481.9p)

Final dividend per

34.7p

2020/21 0.0p

† See pages 207 to 210 for definitions of alternative

performancemeasures

1 STR data, revenue share of total UK market

2 FY22 includes £1.8m loans advanced to joint ventures

3 FY22 includes £36.3m payment of contingent

consideration (FY21: £3.8m) and £1.4m capital

contributions to joint ventures (FY21: £1.3m)

Net cash/(debt)†

£141m

2020/21 (£47m)

Operating cash flow†

£404 m

2020/21 (£489m)

Strategic report Governance Financial statements Other information

A UNIQUE

APPROACH

Our ambition

To be the world’s best budget hotelbrand

Our purpose

To provide quality, affordable hotels 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

Overview

UNITED

KINGDOM

GERMANY

Number of rooms

82,2 86

2020/21: 78,718

Number of rooms

5,875

2020/21: 4,880

Number of rooms

inpipeline

8,332

2020/21: 12,256

Number of rooms

inpipeline

8,454

2020/21: 8,420

At Premier Inn, we’re here to help the nation rest easy,

whether it's a choice of rooms across our 800+ hotels,

comfy beds that guests won’t want to leave or food to

fuel the start and end of every day.

We’ve got a range of flexible rates to suit everyone,

friendly team members who genuinely care and a level

ofconsistency that ensures everyone knows exactly

whatthey’re going to get. It’s comfort that everyone

cancount on.

Germany provides a significant opportunity for Premier

Inn to grow long term and replicate its UK success, with

the German market sharing many of the attractive

characteristics we see in the UK.

We continue to grow at pace in Germany, with 37

operational hotels and a committed pipeline of 41 hotels.

This progress now gives Premier Inn a national footprint

and brings us closer to our goal of becoming the number

one budget hotel brand in Germany.

Read more on

pages 28 and 29

* Includes one site in each of Jersey, Guernsey and the Isle of Man and two sites in Ireland

1 As at year end 3 March 2022

Whitbread Annual Report and Accounts 2021/22 2

Our Business at a Glance

OPPORTUNITY

COMMUNITY

RESPONSIBILITY

Our values

Our hotel brands

Genuine

Really caring about

our customers

At Premier Inn we pride ourselves on comfort and quality,

sowhether you’re staying for business or leisure, you’ll always

enjoy a warm welcome from our friendly teams, as well as

comfortable king-sized beds, ensuite bathrooms, a TV with

Freeview and Wi-Fi in every room.

Contemporary style combined with great connectivity

makeshub by Premier Inn the UK’s most space-efficient

digitally-advanced hotel. Meanwhile, at ZIP by Premier Inn, you

get a small room, a simple stay and, bestofall, a price to match.

A team where everyone can reach their potential

–nobarriers to entry and no limitations to ambition

We will be for everyone, championing inclusivity

acrosstheorganisation and improving diversity

We will have industry-leading training and

developmentschemes

Team member wellbeing will be considered in

everythingwedo

Read more about our opportunity pillar on pages 4 and

5 and pages 40 to 43

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 mission

We will support the wellbeing of our customers

Read more about our community pillar on pages 6 and

7 and pages 44and45

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 about our responsibility pillar on pages 8

and 9 and pages46 and 47.

Information on our sustainability programme, Force for

Good, is integrated throughout the report and can be

foundby looking for the logo above

Confident

Striving to be the

best at what we do

Committed

Working hard

foreach other

All our hotels have a bar and restaurant, either within the hotel

or just next door, offering a wide selection of meals and hearty

eat-as-much-as-you-like full English and continental breakfasts.

Beefeater is one of the UK’s most well-known restaurant brands

and has been welcoming guests for over 40years. Our newest

restaurant brand Cookhouse & Pub is a great place to get

together and offers freshly prepared dishes and delicious drinks,

with a friendly service and great value. Bar+ Block Steakhouse

is an informal, all-day dining restaurant with afocus on high-

quality steaks and Thyme is Premier Inn’s in-house restaurant

with a contemporary British menu.

Our food and beverage brands

3Whitbread Annual Report and Accounts 2021/22

Strategic report Governance Financial statements Other information

OPPORTUNITY

DOING

FOR OUR

PEOPLE

WE VALUE

DIFFERENCE AT

WHITBREAD

This year we have accelerated our progress against

oureight Diversity and Inclusion commitments, which

launched in autumn 2020. There is more detail on this

onpage 41.

OPPORTUNITY

Whitbread Annual Report and Accounts 2021/22 4

Recognised as a Top Employer

by the Top Employers Institute

for the 12th consecutive year

Ranked 24th in the Financial

Times Diversity Leaders Index

Received a Gold Award for

Excellence in the Stonewall

Workplace Equality Index 2022

Listening to our teams has been a

crucial part of our COVID-19 response

We have continued to listen to our teams

throughout this year, ensuring their safety

andwellbeing is our priority.

Read more on pages 48 and 49

We have reduced our

carbonemissions by 50.1%

sinceour baseline year

Scope 3 carbon target

setacrosssupply chain

99.9% of our UK operation's

waste diverted from landfill

9Whitbread Annual Report and Accounts 2021/22

Strategic report Governance Financial statements Other information

£20m

Raised for

Great Ormond Street

Hospital Children's

Charity

Adam Crozier

Chairman

In my report to you this time last year,

Iconcluded by saying that we were optimistic

for a better year ahead and that we hoped our

business would be fully reopened by May 2021.

Looking back, I am pleased to report that we

were right to be optimistic and that, for much

of the year, we have been able to operate

with a good level of normality. However, as

we all know, it has still been abumpy ride,

with differing levels of restrictionbeing

implemented in the four countries of the

UKand, of course, in Germany.

Whitbread Annual Report and Accounts 2021/22 10

STRONG

DELIVERY

Chairman’s statement

Against this difficult backdrop, Whitbread produced an excellent

performance, outperforming the competition and moving back

to profitability. Whilst we are optimistic now that we may have

seen the last of the lockdowns here in the UK, significant

challenges remain and we continue to navigate both supply

chainissues and inflationary headwinds.

Once again, our teams across the UK and Germany have done

amagnificent job in trying circumstances. They have remained

adaptable to constant change and continued to deliver an

excellent service to our guests. I am delighted that we have

been able to reward them with both a summer bonus and an

increase in hourly pay by a minimum of 5%. As well as giving

team members a well-earned reward this has, of course, enabled

us to remain attractive in a very competitive labour market.

Performance

The statutory profit before tax of £58.2 million benefited from

£170.8 million of COVID-related Government support schemes

in the UK and Germany, and £74.0 million of adjusting items

credits (including £33.2 million profit from property disposals,

and £42.0 million of property impairment reversals).

The Group retains a strong balance sheet and liquidity position,

with a cash inflow before debt repayments of £80.3 million in

the second half. Net cash at the end of the year was

£140.5 million. This balance sheet position is enabling

investment in our comprehensive growth strategy.

As a result of this performance, the Board recommends a final

dividend of 34.7 pence per share. The final dividend will be paid

on 1 July 2022 to shareholders on the register on 27 May 2022.

The Dividend Reinvestment Plan will operate. Details of how to

participate in this plan can be found on the Company’s website.

Details of the Group’s dividend policy can be found in the Chief

Financial Officer’s review on page 31.

Force for Good

Force for Good continues to drive forward our social and

environmental agenda. This year we have been working hard

todeliver against our targets and continue to seek out new

opportunities to reduce our impact on the environment and to

ensure we are doing our best for our people and the communities

we operate in. As well as signing up to Race to Zero and bringing

forward our commitment to reach net zero carbon for our scope 1

and 2 emissions by ten years to 2040, we have also set our targets

to reduce our Scope 3 emissions. Another stand out for me has

been the external recognition of our diversity and inclusion work,

with awards from Stonewall, the Financial Times Diversity Index

and most recently the FTSE Women Leaders Index.

This year we also hit our £20 million target with our charity

partner, Great Ormond Street Hospital Children’s Charity (GOSH

Charity). This has been a big year for our partnership with

GOSH Charity, as we have also undertaken a charity review to

select our next charity partner, through a Company-wide vote.

Ourteams told us they wanted to remain with GOSH Charity.

Weare looking forward to continuing to work with them over

the coming years and supporting the world class care they

offerto some of the children who need it the most.

However, as we have seen the humanitarian crisis unfold in

Ukraine,we have taken the decision to divert all fundraising

activities towards the Disasters Emergency Committee (DEC) to

support this and help to raise funds for the many people who have

been impacted by this tragedy. From the end of March 2022, for

three months, we will ensure all funds raised go to DEC.

You can read more about the work that we do and our targets

in the Force for Good section on pages 36 to 49.

Annual general meeting (AGM)

It is three years now since we were able to gather in person for our

AGM, but I am pleased to say that, barring any unforeseen setbacks,

it is our intention to hold our AGM in person again this year.

Last year we worked hard to ensure that shareholders were fully

able to participate in our AGM electronically and the technology

worked well. 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.

The AGM will take place at 2.00pm on Wednesday 15 June 2022

at Whitbread Court, Porz Avenue, Dunstable LU5 5XE. I very

much look forward to seeing you there or, if you prefer, to your

attendance via the online platform.

The Board

On 31 August 2021, Louise Smalley retired from Whitbread and

stepped down from the Board after 26 years at the Company.

Louise held a variety of key transformation and HR roles across

Whitbread, including HR Director of David Lloyd Leisure and

Whitbread Hotels & Restaurants, before becoming Group HR

Director in 2007 and joining the Board in 2012.

Nicholas Cadbury stepped down from the Board on 21 March

2022 after nine years’ service as Group Finance Director. Nicholas

has played a key role in ensuring that we grew the Company

profitably and, in more recent times, he has helped us to emerge

from the pandemic strongly with a platform to succeed.

I would like to thank both Nicholas and Louise on behalf of the

Board for the significant contribution they made to Whitbread.

Joining the Board is our new Chief Financial Officer, Hemant

Patel. Hemant has been with the Company for the last three

years, he knows our business very well and brings a wealth

ofexperience to the role, with considerable commercial and

operational expertise. Since joining us, Hemant has made a

major contribution to the UK business and has worked skilfully

across multiple areas of responsibility. Hemant is also a non-

executive director and Chair of the Audit and Risk Committee

ofthe Department for Digital, Culture, Media andSport.

Governance

Strong corporate governance is always vital to the success of

acompany, but even more so during times of crisis. We have

continued to take our governance processes very seriously

throughout the pandemic and I believe this has stood us in

good stead as we come out the other side. In the governance

section of this year's report you will find a new section on how

we have monitored Whitbread's unique corporate culture at

Board level on pages 76 and 77.

It has been a particularly complex period for the Remuneration

Committee as it has balanced the need to incentivise and

appropriately reward the executives with the need to remain

mindful of the difficulties faced by our stakeholders and the

support received from Government. I believe this balance has

been achieved and Frank Fiskers explains more about this on

pages 87 to 89.

The year ahead

We go into the new financial year with renewed optimism.

Whilst 2021/22 was bumpy at times, we were able to make

excellent progress and we look forward to the year ahead

withconfidence that we are well positioned to succeed.

Adam Crozier

Chairman

27 April 2022

Whitbread Annual Report and Accounts 2021/22

Strategic report Governance Financial statements Other information

Alison Brittain

Chief Executive Officer

open Premier Inn

hotels

new Premier Plus

rooms

6,339

new PremierInn

hotels

total number

ofrooms

1,645

Consistent, high quality customer offeringWe invest in growth andinnovation

Winner of the YouGov "Best Value Hotel

Chain" for the 11th year running

Germany UK

Travel brand for UK

consumers in the YouGov

Travel Brand & Destination

Rankings Report 2022

1 As of April 2022.

Whitbread Annual Report and Accounts 2021/22 12

INVESTING

TO WIN

Chief Executive’s review

Our winning customer

proposition is built on choice,

value, quality, service and

highhygiene standards.

Whitbread’s performance in the year was strong, with revenues

and profits recovering exceptionally well from last year. Our

hotels traded well ahead of the market in the UK driven by our

‘investing to win’ commercial initiatives and the strong appeal of

our customer offer. As restrictions eased after the first quarter,

high levels of leisure demand and improving business demand

helped drive UK accommodation sales ahead of pre-COVID levels

throughout the summer and into autumn, with sales remaining

resilient through the fourth quarter despite the emergence of the

Omicron COVID variant. As we move into the next phase of our

COVID recovery, this excellent performance, combined with

confidence in the Group’s outlook, means that the Board is now

proposing the reinstatement of dividend payments.

Our teams

Our teams are the most important part of our business, enabling

us to deliver our winning customer proposition and drive our

excellent business performance. A combination of very high

occupancy levels, supply chain issues, and market-wide labour

shortages made last year’s operational environment challenging.

Iam extremely grateful to our teams who responded brilliantly

and delivered an outstanding performance, as evidenced by our

recovering revenues and our strong guest and brand scores.

We believe a talented, motivated and diverse team is critical

indelivering our very high levels of customer service and

experience. We have no barriers to entry when recruiting

newteam members, and no limits to ambition when team

members progress through the business.

We are committed to supporting our teams in their mental,

physical and financial wellbeing. We have invested in our team

members' pay, including an additional pay increase in October

2021, and in an “end of summer” bonus for colleagues to thank

them for their efforts through our busiest period. We continue

toinvest in our training and development programmes and

haveexpanded our wellbeing support, including the provision

ofmental health first aiders and support services. We are

delighted that 85% of our employees are proud to work for

Whitbread and we have been recognised as a “Top Employer”

forthe 12th year running.

Our customers

We put our customers at the heart of our business and

everything we do is aimed at providing them with a great

experience in our hotels and restaurants, while ensuring their

safety and comfort. We invest in new hotels in new locations,

andin new formats and services, to ensure that our offer remains

first choice for both our business and leisure guests. Our winning

customer proposition is built on choice, value, quality, service and

high hygiene standards, and our flexible booking policy provides

peace of mind, allowing customers to book with us in uncertain

times. We have very high guest scores, and market-leading brand

and value for money ratings. Premier Inn has a long track-record

of winning industry awards in recognition of our customer focus,

and we have also taken the top spot in some new awards for the

first time this year.

2021/22 financial performance – a return to profitability

2021/22 adjusted loss before tax of £15.8m compares to a loss of

£635.1m in 2020/21, largely reflecting the strong recovery the

business has delivered with 2021/22 statutory revenues 189%

ahead of the prior year.

Government restrictions remained in place into the start of

thisfinancial year, with our hotels closed to all but essential

business guests for the vast majority of the first quarter.

However,following the relaxation of restrictions from mid May

2021, our subsequent revenue recovery was very strong, with

sales recovering to, and then exceeding, pre-pandemic levels

inthe UK. Premier Inn’s total UK accommodation sales growth

also continued to outperform the midscale and economy market,

with 2021/22 total sales growth 14.8pp ahead of the market, and

17.3pp ahead in the second half.

We value difference at Whitbread

Diversity and Inclusion continues to be an important

topicacross society, and I am proud that over the last

12 months we have really accelerated our progress

againstour eight Diversity and Inclusion commitments.

Thishas beendemonstrated through our external

recognitionby Stonewall,the Financial Times Diversity

Indexand the FTSEWomen Leaders Index.

These commitments have given us a tangible set of actions,

ensuring we are championing inclusion as well as driving

diversity. I’m encouraged by the progress we’ve made

overthe last year and, as a business passionate about

beingaForce for Good, we know there is more to do to

demonstrate that we value difference.

Read more about the progress we have made

againstour D&I commitments on page 40

Consistent, high quality customer offering

13Whitbread Annual Report and Accounts 2021/22

Strategic report Governance Financial statements Other information

Our teams are the most important part of the business.

This strong sales performance, combined with the benefit of

Government support and some adjusting items, has enabled the

Group to record a small statutory profit before tax in 2021/22, an

improvement of over £1 billion loss in the previous year. While this

is still behind 2019/20 pre-pandemic statutory profit before tax

of£280.0 million, thestrength of our revenue recovery means we

areconfident ofareturn to pre-pandemic UK profit levels and

profit margins, despite the inflationary cost headwinds that

wecurrently see inthe market.

Total UK food and beverage sales were 163.4%

ahead of 2020/21,

but32.7%

behind 2019/20 reflecting the fact that all restaurants

were closed from the start of the year until 12 April, when

outdoor service only was permitted in England. The estate

waslargely re-opened on 17 May, with total food and beverage

sales improving to 13.3%

behind 2019/20 levels in the second

half ofthe year, as the pub and restaurant value-sector sees a

slower return to pre-COVID levels.

Premier Inn Germany total accommodation sales were 176.5%

ahead of 2020/21 reflecting the rapid growth in the size of the

estate. The German market operated under higher levels of

restrictions than in the UK, that acted as a significant drag on

market demand throughout the year. During the summer, when

restrictions were minimised, we saw good trading momentum,

especially in those destinations with a greater leisure exposure,

such as Berlin, Freiburg and Hamburg.

Optimistic outlook

As we move through the year in the UK, and in the absence of

further COVID restrictions, we expect international inbound

demand to increase, alongside recovering office-based corporate

demand, complimenting the already high levels of leisure and

business trade demand. We have good visibility throughout the

first quarter and somewhat into the second quarter, however the

short booking lead-time nature of our business means we have

much less visibility into the second half of the year.

In our restaurants, we anticipate that the rollout of new menus,

combined with targeted marketing initiatives, will help drive an

improvement in food and beverage sales as we move through

theyear.

Well publicised cost inflation in 2022/23 is anticipated to be

above historic average levels at c.8-9%. We expect to be able

tooffset some of these higher levels of inflation through our

extended cost efficiency programme, estate growth and

pricingopportunity.

Our ability to take market share through estate growth and the

increased pressures faced by competitors, and our wide-ranging

investment in commercial initiatives, will drive revenue growth

and operating leverage improvements. Our pricing power in an

inflationary cycle, the revenue uplift from our refurbishment

programme and investment in Premier Plus rooms, the higher

profitability of new hotels and our long-standing cost reduction

efficiency programme, combine to give a substantial profit

margin potential. We expect this to enable a return to pre-

pandemic UK profit margins in the medium term, and to drive

attractive returns on capital deployed.

In Germany, COVID restrictions have continued to act as a

headwind in the German hotel market into the new financial year.

While restrictions are reducing from the beginning of April 2022,

the market is still some way behind pre-COVID levels. The weaker

market will dampen our trading performance in the short term

and combined with the maturity impact of our new estate, will

adversely impact profits. As we move into summer, we expect

arebound in leisure demand, and a steady build in business

demand, and there is no change in our very positive view of

themedium and long-term value creation opportunity for

Premier Inn in Germany.

Strong balance sheet and dividend restoration

The Group’s strong asset backed balance sheet, with net cash

of£140.5 million and accessible cash of £1,132.4 million at the

endof the year, enables the Group to invest in growth and the

Premier Inn proposition when others will be constrained. As the

business continues to recover, we also expect to return to

investment grade leverage metrics. We are “investing to win”

innew hotels, new room products, our IT platforms and in

marketing, helping to deliver sustained growth in both the UK

and Germany. Our strong balance sheet provides us with the

flexibility to execute acquisitions in Germany, further accelerating

our growth. At all times, we operate with capital discipline,

ensuring the optimal use of capital to drive the best returns

forshareholders.

The combination of the Group’s strong balance sheet,

encouraging trading and confidence in the outlook means

thatdividend payments will now resume, with the Board

recommending a final dividend per share of 34.7p resulting

inatotaldividend payment of £70m, payable in July 2022.

Clear and consistent strategy

We continue to execute a clear and consistent strategy

togrowand innovate in the UK, to focus on our strengths

togrowinGermany and to build the capabilities required

tosupport our growth over the long term.

The budget branded hotel sector in which we operate is

historically the highest growth segment in the hotel market.

Ithasproved more resilient in previous downturns and is also

outperforming the rest of the hotel market during this recovery

period. Premier Inn has historically been a net beneficiary from

consumers “trading down” in times when consumer spend has

tightened. Prior to the onset of the COVID pandemic, in 2019 the

independent sector still represented 48% of the UK market and

72% of the German market, but both were in long-term decline

ascustomers migrate from independent to budget branded

hotels. We now have evidence that the number of independents

exiting the market has increased significantly from historic levels,

undoubtedly as a result of the pandemic. The Group expects

thata heightened level of independent exits will continue for the

next 12-36 months, and that this pattern will also be evidenced

inGermany. Premier Inn is well-placed to capitalise on this

contraction in competitor supply and to take market share

inboth these markets.

The Group has a long runway for growth in the UK, with detailed

network planning supporting a network target of at least 110,000

rooms, representing a growth opportunity of over 33% compared

to our current UK estate of over 82,000 rooms. We hold a uniquely

advantaged position in the UK market as the largest operator with

the strongest brand, alongside our direct distribution, best-in-

class operating model and broad customer reach. Furthermore,

backed by our strong balance sheet, we have invested through

1 Versus FY21 on a 52 week basis.

2 Versus FY20 on a 52 week basis.

Whitbread Annual Report and Accounts 2021/22 14

Chief Executive’s review continued

The Group's flexible

balancesheet has enabled

aprogramme of investment

in expansion andcommercial

initiatives thatare driving

marketsharegains.

Investing to win

The Group’s flexible balance sheet has enabled a programme

ofinvestment in expansion and commercial initiatives that are

driving market share gains. The “Rest Easy” multi-channel

marketing campaign launched in April 2021 helped to further

improve our already high brand recognition scores and drive

increased numbers of customers to the Premier Inn website.

Ourinvestment in refurbishment will ensure that our hotel

estateremains well-invested, at a time when others will be

constrained. We now have over 2,000 Premier Plus rooms

andwill roll-out a further 1,200 in the coming year. These

upgraded rooms were initially targeted at business customers,

but they have also proved popular with our leisure guests and

aredelivering a good uplift in room rates. We are extending our

business customer reach through an improved business booker

portal and utilising awider network of travel management

companies, and we willalso continue to invest in our IT

platforms,helping further enhance our digital capability,

including a new customer relationship management platform

thatwill be introduced inthenext two years

In Germany, we have invested in growth, with the estate growing

in a transformational way during the COVID pandemic. At the

start of the pandemic we had six open hotels, and through a

combination of bolt-on M&A activity and rapid organic growth,

our estate now stands at 37 open hotels, and a total open and

committed estate of 78 hotels.

The 'Rest Easy' multi-channel marketing campaign launched

in April 2021.

Force for Good

Whitbread’s sustainability programme, Force for Good, is

embedded across our business functions, ensuring that being a

responsible business is integrated across our operations, which is

crucial to our long-term success. It is an ambitious programme,

with the overarching objective to enable everyone to live and

work well. Following another challenging year, we are proud to

have kept our Force for Good commitments and ambition central

to our response and how we rebuild after the global pandemic

has been of critical importance to us.

During the year we set further stretching targets, including

accelerating our net zero carbon target to be achieved by 2040,

and setting eight clear Diversity and Inclusion commitments,

including a target of 40% female representation in our senior

leadership roles, which we have already surpassed. We are

making good progress across our ESG agenda and have

workedhard to ensure it is fully embedded within the

operationsof the business.

Continued focus

Whitbread celebrates being 280 years old this year and is a

strong and much-loved business, reaching a broad range of

customers with the largest network of hotels and restaurants.

Wewill continue to focus on our customers, colleagues, suppliers

and the communities we serve, as we continue to grow and

develop our Company.

As we move into the next phase of our post pandemic recovery,

Whitbread is well-placed to enhance our market leadership

position further in the UK, to accelerate our growth in Germany,

and drive long-term value for all our stakeholders.

Alison Brittain

Chief Executive

27 April 2022

the cycle, in new hotels, Premier Plus rooms and high levels of

refurbishments, ensuring we maintain our stand-out customer

proposition in the budget sector. This, combined with the

evidence of an acceleration of supply contraction within the

independent hotel sector, presents Premier Inn with the

opportunity to accelerate its market share gains.

The hotel market in Germany is recovering at a slower pace than

the UK due to the higher level of Government restrictions which

have lasted longer. However, we have no reason to believe the

market won’t come back strongly in due course. With our open

hotel estate now standing at 37 hotels, all now branded Premier

Inn, with a further 41 hotels in the pipeline, the foundations of a

successful business are already in place. We have great quality

hotels in prime locations, appealing to a broad customer base,

and scoring highly with our guests. The opportunity for the

Group to create value in Germany remains compelling as we

lookforward to being able to fully trade the estate, in the majority

of cases for the first time, in the absence of Government restrictions.

We will also continue to take opportunities to grow our German

estate and deliver attractive long-term returns.

15Whitbread Annual Report and Accounts 2021/22

Strategic report Governance Financial statements Other information

Continuing to grow and innovate in the UK

Read more on pages 26 and 27

UK’s largest hotel chain

Premier Inn is the UK’s largest hotel chain, with over 82,000 rooms in 841 hotels located across

the UK, meaning that customers are never far from a Premier Inn. Ourvertically integrated model

provides increased control of network planning and property development, meaning we can

efficiently access locations where there is opportunity to expand and ensure we have more hotels

in locations where our customers want to stay. We can also leverage our network to drive

economies of scale. With just over 35,700 employees across our UK hotels and restaurants,

weserve over four million customers every month.

UK’s favourite hotel brand and winning customer proposition

The Premier Inn brand is synonymous with good value, high-quality rooms in desired locations

and great customer service. Full ownership of the brand helps create a consistently high-quality

customer offering across our entire hotel network, helping drive market-leading customer scores.

In the most recent YouGov hotel BrandIndex survey

, Premier Inn was voted number one for

customer satisfaction, impression, valueand likelihood-to-recommend. We are well positioned

totake market share as customers seek value, quality, and the familiarity of their most

trustedbrands.

Best-in-class operations

Our unique operating model provides a clear competitive advantage. Ownership of all aspects

ofour hotel operations ensures greater control over the customer experience and delivery

ofawinning customer proposition, providing our guests with more choice, value for money,

outstanding product quality and excellent customer service. We are continually evolving our

estate through innovative new products such as hub by Premier Inn and Premier Plus, ensuring

supply meets changing customer demands. All of our hotels have a bar and restaurant, either

within the hotel or located next door. Our restaurants are core to our overall customer offering,

helping drive higher RevPAR in our hotels. The success of this operating model is clearly

evidenced by our highlevels of internal promotions and excellent customer satisfaction scores.

1 Source: YouGov BrandIndex Satisfaction, Impression, Value, Recommended & Quality scores as at 3 March 2022 based on a

nationally representative 12 week moving average

Whitbread Annual Report and Accounts 2021/22 16

A CLEAR

PROPOSITION

INVESTMENT

Industry-leading direct digital distribution model

Over 99% of Premier Inn's UK room reservations are booked directly with us. Direct distribution

provides complete ownership over the customer relationship and drives significantly lower

acquisitionand retention costs, unlike many of our competitors, who incur high commission

ratesto third parties.

Broad customer reach

Premier Inn’s UK customer base is very broad, with a roughly even split of business and leisure

customers, ensuring we are not over exposed to any one type of customer, and helping drive high

occupancy levels. Around half of our business customers are non-office based, i.e. those workers who

need to be physically present to perform their jobs, while our office-based guests tend to travel for

business-to-business reasons. Premier Inn has relatively few group business bookings (e.g. conferences)

and is therefore less exposed to those areas of business travel that may see a structural shift to virtual

meetings. Our leisure guests travel for a very wide range of reasons, from those that are event-driven

(e.g. weddings, sporting events, theatre breaks) to weekends away with friends and family, through to

those taking longer holidays in our tourist destinations. Our geographic spread, with over 80% of our

rooms sold in the UK regions, combined with our domestic focus (90% of guests are based in the UK)

means that we are exposed to the areas that have recovered quickest from the pandemic.

Regions vs London

Premier Inn

PI regions

83%

PI London

17%

Domestic vs inbound

Premier Inn

Market

Leisure vs business

Premier Inn

Market

Trades vs office-based

Premier Inn

Market

Market regions

71%

Market London

29%

PI domestic

90%

PI inbound

10%

Market domestic

63%

Market inbound

37%

PI leisure

50%

PI business

50%

Market leisure

56%

Market business

44%

PI trades

50%

PI office-based

50%

Source: PI data for the 12 months ending Feb 2022. Market for calendar year 2019, based on room nights sold.

Greater proportion of office-based

Market

17Whitbread Annual Report and Accounts 2021/22

Governance Financial statements Other informationStrategic report

Significant headroom to grow

Premier Inn continues to grow its German pipeline and we believe that we have a long-term line

of sight to over 60,000 rooms, which would equate to around 6% market share, still only around

half of that achieved in the UK. We are pursuing an aggressive growth strategy in the German

market, both organically and inorganically, as we look to rapidly establish our footprint and are

confident of the opportunity to acquire assets at prices that will drive good returns.

Ambition to be the leading budget hotel brand in Germany

The total open and committed pipeline in Germany stands at 14,329 rooms across 78 hotels, with

5,875 rooms open in 35 hotels at the end of the financial year (equivalent to 1% market share).

InGermany, we are growing at pace, investing in both organic and inorganic growth, and building

the Premier Inn brand proposition as we establish a nationwide footprint. As the estate continues

to grow, we are focusing on brand building, with nationwide marketing campaigns and new

corporate relationships supplementing effective localised brand campaigns. The quality of the

hotel and room offering, which is driving high customer scores, is also a key component in driving

brand awareness.

Growing at scale inGermany

February 2021 German portfolio April 2022 German portfolio

Replicate success of Premier Inn UK

Our aim is to be the number one budget hotel operator in Germany, by leveraging the strengths

and capabilities of our UK business. The German operating model replicates that used so

successfully in the UK, built on operational control and a flexible approach to property.

Open

Pipeline hotels

Open

Pipeline hotels

Read more on pages 28 and 29

Whitbread Annual Report and Accounts 2021/22 18

A Clear Investment Proposition continued

Financial flexibility

The Group’s strong balance sheet, with net cash of £140.5 million and accessible cash of

£1,132.4 million at the end of the year, supports our investment grade leverage metrics and

enables us to invest in growth whilst others are constrained. We are ‘investing to win’ in new

hotels, new room products, IT platforms and marketing, helping to provide a platform for

sustained growth in both the UK and Germany. Our balance sheet also provides the flexibility to

execute bolt-on M&A deals in Germany, further accelerating our growth. At all times, we operate

with strict capital discipline, ensuring the optimal use of capital to drive the best returns.

Lean and agile cost model

Whitbread has a long track record of delivering material cost efficiencies, with £315 million of

savings delivered between 2016/17, when the programme was launched, and 2021/22. Market-wide

inflationary pressures mean the focus on cost control has never been more important. Our three-

year £100 million cost saving programme, initially announced in April 2021 with a completion date

bythe end of 2023/24, has now been extended to achieve £140 million (+£40 million) by 2024/25.

We are making good progress, with this target being achieved through developing our international

sourcing capability, investing in our technology platforms and embedding a flexible operating model.

The opportunity also remains for hotel catchment areas to be optimised, with around 8% of Premier Inn’s

rooms being in hotels smaller than 60 rooms. Managing existing demand in certain locations, through

a smaller number of extended or new, larger hotels, allows us to drive a more cost-efficient estate.

Enhancing our capabilities to support long-term growth

Operating responsibly and sustainably

Our long-established Force for Good programme covers large aspects of our ESG agenda

andensures that doing the right thing is embedded in everything that we do. Force for Good

isashared responsibility that operates across three key pillars: ‘opportunity’, ‘community’ and

‘responsibility’. The ambitions for this programme are illustrated by our stretching targets,

allofwhich hold us accountable for the change we seek to implement.

Asset-backed balance sheet

The Group owns 56% of its hotel estate, with the remaining 44% operated through leaseholds.

Freehold ownership provides control over the initial development of the hotel, and subsequent

maintenance and redevelopment. Our strong balance sheet, high levels of liquidity and flexible

property portfolio provides a source of funding during periods of volatility. A flexible approach

tofreehold or leasehold acquisitions also ensures new sites are in the best locations and have

theoptimal size and format.

Read more on pages 30 to 33

Whitbread Annual Report and Accounts 2021/22

Governance Financial statements Other informationStrategic report

We have a business

model that delivers an

unrivalled mix of quality

and value to millions of

customers and offers a

competitive advantage

in the budget, domestic,

short-stay market.

Premier Inn is emerging

from the COVID-19

pandemic in a position

ofstrength to take

market share.

67m

population

713k

hotel rooms

11%

Premier Inn market

share of rooms

48%

independent hotels market

share of rooms

THE UK MARKET

Long runway for growth with

scaleadvantage

Prior to the COVID-19 pandemic, we

identified the potential for Premier Inn

togrow to 110,000 rooms across the UK.

Constraints amongst our competitor sets,

as a result of the COVID-19 pandemic,

mean this opportunity may be even

greater as competitor supply contracts.

Our scale in the UK allows us to leverage

our brand portfolio to ensure we have

theright hotel and restaurant offer by

location. Our new hotels are larger than

the estate average, more efficient to run,

and have better operating leverage.

UK hotel market is in long-term growth

We expect the UK hotel market to

continue to grow in the long term. Leisure

and travel are becoming more popular,

particularly amongst younger people, and

in the short term we continue to see the

release of pent-up demand following the

COVID-19 pandemic. The UK is densely

populated, driving domestic short-stay

travel for both business and leisure

purposes, makingthe UK a great core

market forPremier Inn.

Budget hotel market is

structurallyadvantaged

Within the UK hotel market, the budget

branded hotel sector is historically the

highest growth segment. It has proved

more resilient in previous downturns, and

is also significantly outperforming the

rest of the hotel market during the

post-pandemic recovery period.

Budgetbranded demand has grown

faster than the rest of the sector in

everyyear from 2009 to 2021.

Highly fragmented market and

accelerated independent decline

Between 2010 and 2019, Premier Inn

increased its market share of UK hotel

rooms from 6% to 11%, whilst over the

same period the independent sector

market share declined from 57% to 48%.

This illustrated the long-term customer

migration from independent to budget

branded hotels, from which Premier Inn

iswell placed to capitalise. Initial signs

indicate that this contraction in

independent supply may have

accelerated as a result of the lower

demand for hotels throughout

thepandemic.

57%

24%

13%

48%

2010 2019

678k rooms 713k rooms

Premier Inn

Budget branded

Other branded

Independents

24%

17%

11%

Multi-year UK growth opportunity

Whitbread Annual Report and Accounts 2021/22 20

MARKET REVIEW

83m

population

993k

hotel rooms

Premier Inn market

share of rooms

72%

independent hotels market

share of rooms

THE GERMAN MARKET

We believe the

opportunity to create

value in Germany

is significant and

our commitment to

this market will be

substantial.

Our investment in Germany will

allow us to continue to replicate

our UK success, enabling us to

become the number one budget

hotel operator in Germany and

deliver good long-term returns.

We have rapidly grown our

pipeline in Germany in the last

two years, with a network that

now stands at 37 hotels and

a total open and committed

pipeline of 78 hotels. This

network gives us a national

footprint, with a presence

across most major German

citiesand towns.

Accelerated budget branded

RevPARgrowth

The German market is around 40% larger

than the UK, providing plenty of room for

growth. Prior to the COVID-19 pandemic,

budget branded RevPAR had been

growing faster than the UK, at 2.3%

CAGRbetween 2015 and 2019

comparedwith 1.3% in the UK.

Independent market in

long-termdecline

The German market is even more

fragmented than the UK, with

independent hotels making up 72%

ofsupply in 2019. As in the UK,

theindependent sector is in long-term

decline as customers migrate from

independent to budget-branded hotels,

creating further opportunities for

marketshare gains.

Regional dispersion drives short-stay

domestic travel

Germany is more regionally dispersed

than the UK, due to its history and

federalised political and industrial

structure. This geographic spread drives

greater demand for short-stay domestic

travel, and is particularly business-led.

Therefore, there is a greater frequency

oftravel by the type of customer that

Premier Inn excels at serving.

Significant structural barriers to entry

for asset-light operators

Limited new capacity has been added in

the budget sector in recent years as a

result of the structural barriers to entry

that exist in the German property market,

including fewer property financing

structures such as Real Estate Investment

Trusts (REITs). Greater opportunities in

the four- and five-star sector also exist

for asset-light models. Therefore

international asset-light operators have

struggled to find franchisees to operate

appropriate new hotel sites in the budget

sector. The only hotel businesses that

have delivered meaningful growth adopt

a similar owner-operator model to

Premier Inn. In order to add sufficient

capacity in the budget sector, an

operator needs to be willing to develop

freehold, sign long leases or buy out

existing operators.

An even greater opportunity for

Premier Inn in Germany

As we exit the pandemic, the structural

opportunity for the Premier Inn brand in

Germany is even greater. We have been

able to invest and acquire assets at good

long-term returns to take our open and

committed pipeline to 78 hotels whilst

others have been constrained. There are

clear signs that the independent sector

is distressed, and we expect the

independent decline to be accelerated

across the next 18 to 24 months, allowing

us to take further market share. The

strength of our balance sheet and

covenant allows us to be agile and

undertake freehold, leasehold and

M&Adeals as opportunities arise.

1 Source: Company data and estimates, data is 2019; the impact of COVID-19 means that 2020 & 2021 is not a representative year, and is therefore excluded from the date range.

21Whitbread Annual Report and Accounts 2021/22

Strategic report Governance Financial statements Other information

1 YouGov Brand Index Quality & Value scores as at 3 March 2022 based on a nationally representative 52 week moving average.

YOUGOV BRANDINDEX

THE VALUE WE CREATE

Brand strength

Premier Inn is regularly voted as the UK’s favourite hotel brand, with a consistent customer offering that is synonymous with

high quality, good value and great customer service.

Market-leading direct

digitaldistribution

Premier Inn has a market-leading direct

digital distribution model with 99% of

our bookings made directly through our

website. We have complete ownership

of the customer relationship and

therefore benefit from low customer

acquisition costs and high levels

ofretention.

Property flexibility

By controlling and funding our property

development, we get the right hotels in

the right locations. Our flexible approach

to property ownership improves our

ability to manage our estate and make

decisions to optimise our network.

Scale/network

We are the UK’s largest hotel chain, with

an estate comprising of 841 hotels and

439 restaurants across the UK, 35 hotels

in Germany and 10 hotels in the Middle

East at the end of the financial year. Our

scale provides a diverse portfolio of

locations where our customers want to

stay and results in efficiencies through

economies of scale.

Best-in-class operational performance

We own all aspects of our hotel and

restaurant operations, ensuring greater

control over the customer experience.

We provide a high-quality offering at a

low cost and deliver this on a consistent

basis throughout the estate.

Lean and agile cost model

Whitbread has a long track record of

delivering material cost efficiencies.

Ourefficiency programme ensures we

retain a lean and agile cost base, enabling

us to deliver both quality and value for

money for our guests and return on

capital for our shareholders.

Operating responsibly and sustainably

Our long-established Force for Good

programme covers large aspects of our

ESG agenda and ensures that doing the

right thing is embedded in everything

that we do.

6 7

05 10 15 25 35

20 30 40

Quality score

Value score

Hilton

Marriott

Crowne Plaza

Travelodge

Best Western

Ibis

Holiday Inn

Airbnb

Holiday

Inn Express

Premier Inn

To provide quality, affordable hotels 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

To be the world’s best

budget hotel brand

OUR PURPOSE OUR VISION

Whitbread Annual Report and Accounts 2021/22 22

OUR BUSINESS MODEL

The UK’s biggest hotel brand

THE PROFIT WE MAKE

Revenue

We are the largest budget branded hotel chain in the UK with

a growing presence in Germany and hotels in the Middle East.

Our unique model and leading market position in the UK puts

us in a strong position to 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 very 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 offering is a core

part of our customer proposition.

How we profit

Whitbread is a business of scale, and therefore, as we grow,

alarge proportion of our incremental sales convert to profit.

Thebusiness can leverage its network to drive economies

ofscale, helping offset inflation alongside our cost efficiency

programme. We have a high discretionary free cash flow,

which allows us to continue to invest in our estate, execute

ourgrowth strategy and maintainan attractive return on

capital for our shareholders.

Strong capital discipline

We invest in new hotels for the long term, while also deploying

capital on maintenance and product improvement to ensure

we continue to provide Premier Inn’s consistent high quality.

We have invested in our estate ‘through the cycle’ to ensure

weare well positioned to take market share whilst others are

constrained. We are pursuing an aggressive growth strategy

inthe German market, both organically and inorganically, and

now have hotels in most major cities and towns. Our strong

balance sheet enables us to expand at pace and rapidly

establish our footprint, and we are confident of the

opportunityto acquireassets at prices that will drive

goodreturns.

THE VALUES WE SHARE

Our customers

We welcome millions of customers to our hotels and

restaurants every year, and making a meaningful contribution

to those we serve is key. We constantly respond to the

changing needs and lifestyles of our customers and ensure

ouroffering is inclusive for all. At the start of the COVID-19

pandemic we introduced new booking types to give

customers more choice between fully flexible, semi flexible

and value orientated standard bookings. We also introduced

aflexible standard booking rate to allow for amendment of

dates. We strongly believe in helping our customers make

informed choices for a healthier life. We work closely with

Public Health England and continue to monitor our menus

toensure we offer an excellent choice of healthy options, with

great quality, responsibly sourced, affordable food and drink.

We are passionate about the health and safety of our guests,

and all of our staff are fully trained to ensure our hotels and

restaurants are safe environments for our guests. Premier Inn’s

owner-operator model ensures that these standards and ways

of working can be rigorously enforced across the estate.

Our shareholders

Our focus on consistent returns from an expanding capital

base, combined with an ambitious growth strategy, create

substantial shareholder value. We have three priorities: to

grow and innovate in our core UK businesses to take market

share; grow at scale in Germany; and to enhance the capability

and infrastructure to support long-term growth. Our long-term

growth will be delivered through disciplined capital allocation

and a flexible approach to property ownership. This financial

strength and flexibility is key to deploying our strategy.

Our people

As one of the UK’s largest employers, operating across

communities in the UK, Germany and the Middle East, we are

passionate about recruiting, training and retaining great

people. We ensure our people are empowered to grow and

develop long-term careers within our business. We have best-

in-class development programmes, industry-leading training

schemes, and a successful apprenticeship programme. We

have embedded a clear wellbeing communication plan to

support mental and physical wellbeing for our team

members. We are also committed to removing barriers to

entry and creating an environment where everyone feels

valued and is supported to grow. Whitbread is an inclusive

employer, strongly believing that everyone is unique and

there should be no barriers to entry and no limits to ambition.

We champion inclusivity and improving diversity across the

entire organisation and we have set eight Diversity and

Inclusion commitments to ensure our teams feelsupported

and engaged.

Our communities

Our hotels and restaurants are in hundreds of communities

across the length and breadth of the UK. We are often a key

part of these communities, and therefore have a big part to

play in making them a great place to live, work and do

business. We put a huge amount of energy and passion into

fundraising for charities, finding new ways to serve the

communities we operate in, as well as putting in hours of

community support.

23Whitbread Annual Report and Accounts 2021/22

Strategic report Governance Financial statements Other information

Premier Inn’s strategy is

underpinnedby its Force for Good

programme

Read more on Force for Good on pages 34 to 49

We put our customers and teams at

the heart of everything we do. Our

strategy is to provide sustainable

long-term value for our shareholders

by growing our successful hotel and

restaurant brands in structurally

appealing markets, whilst delivering

an attractivereturnon capital.

Premier Inn has a current UK estate of 82,286 rooms, with

acommitted pipeline of 8,332 rooms and line of sight of

110,000 rooms. We look to maintain our position as one ofthe

world’s leading budget branded hotels through increasing the

size of our estate and optimising our existing network. The

advantages of our operating model, the strength of the

Premier Inn brand, and our market-leading directdistribution

model will enable the Group to deliver substantial market

share gains in the UK. We remain focused on maintaining

market-leading guest scores and upholding our competitive

position in terms of both value and quality through the

strength of the brand and excellent customer service. We will

continue to innovate new products and services and provide

solutions to fulfil customer demand. Further market share

gains are expected as a result of the enhanced structural

opportunities from the independent sector. The independent

sector has been in long-term decline as customers migrate

from independent to budget branded hotels, which is

expected to accelerate as a result ofthe COVID-19 pandemic.

We are well placed to capitalise on the expected contraction

in competitor supply and totake market share.

Total UK revenue

£ 1,668.2 m

Adjusted operating profit

£199.6m

UK market share growth

Winner of YouGov "Best Hotel Chain" for 11th year running

UK 2022/23 priorities

› Continued market share gains

› Hotel and restaurant profit recovery and margin recovery

› Expand the number of Premier Plus rooms

› Maintain excellent guest scores

CONTINUE TO GROW AND INNOVATE

IN THE UK AND TAKE MARKET SHARE

UK market outperformance

14.8%

1 STR data, full inventory basis, M&E excludes Premier Inn on a 52 week basis

– restated in line with STR M&E room stock reclassification

2 STR data, revenue share of total UK market, versus 2019/20 on a 52 week basis

3 Source: YouGov BrandIndex Satisfaction, Impression, Value, Recommended & Quality

scores as at 3 March 2022 based on a nationally representative 12 week moving average

Whitbread Annual Report and Accounts 2021/22 24

Our Strategy at a Glance

PROVIDING SUSTAINABLE

LONG-TERM VALUE

Germany 2022/23 priorities

› Continue to build a network across key towns and cities

› Build brand awareness in Germany

› Utilise freehold and leasehold flexibility strategy to

execute great deals

In Germany, Premier Inn has an estate of 5,875 rooms, with

a committed pipeline of 8,454 rooms and line of sight of

60,000 rooms. Our aim is to be the number one budget

hotel operator in Germany, by leveraging the strengths and

capabilities of the UK business. The key focus in Germany

iscontinuing to grow Premier Inn’s presence across major

towns and cities. We look to replicate the success achieved

inthe UK market through building our brand presence and

delivering a winning customer proposition.

Our strategic priorities remain consistent with our proven

plan to create sustainable shareholder value over the long

term. We continue to take actions to ensure we develop as

a leaner, stronger, and more resilient business through

utilising our financial flexibility, enhancing our lean and

agile cost model and operate sustainably in everything

that we do. We are also continuing to invest in our IT

platforms, helping further enhance our digital capability,

including a new CRM platform that will be introduced in

the next two years. Our successful efficiency programme,

vertically integrated model, brand strength, product

innovation and direct distribution underpin our consistent

quality and competitive advantages. We have extended

our three-year cost saving programme by one year to

FY25 delivering c.£140m across FY22 to FY25. This next

stage of our efficiency programme will ensure we retain

our lean and agile cost base. Our balance sheet strength,

with freehold backing and strict capital discipline, will

ensure that we maintain our financial strength and can

continue to invest to win.

Total Germany revenue

£35.2m

Adjusted operating loss

£(15.4)m

Customer score

Cash position

£1,132.4m

Capex

£261m

Balance sheet leverage

3.9x

Our long-term growth 2022/23 priorities

› Sustain a strong balance sheet and liquidity, including

maximising our cash flow

› Demonstrate continued capital discipline in everything we do

› Retention and engagement of teams

› Improve technology capabilities

› Build on our efficiency programme

GROW AT SCALE IN GERMANY

ENHANCE OUR CAPABILITIES TO

SUPPORT LONG-TERM GROWTH

4 Source: TrustYou scores from March 2021 to February 2022

25Whitbread Annual Report and Accounts 2021/22

Strategic report Governance Financial statements Other information

Winner of the YouGov Best Value

HotelChain for the 11th year running

99% of Premier Inn UK bookings are

madedirectly through our website

Recognised as 'Top Employer'

forthe12thyear running

Premier Inn UK

£m FY22 FY21 FY20 vs FY21 vs FY20

Statutory revenue 1,668.2 577.4 2,050.3 188.9% (18.6)%

Other income (excl

rental income)

70.1 142.5 13.6 (50.8)% 415.4%

Operating costs

before

depreciation,

amortisation and

rent (1,248.6) (861.7) (1,270.2) (44.9)% 1.7%

Adjusted

EBITDAR† 489.8 (141.8) 793.7 445.4% (38.3)%

Net turnover rent

and rental income 3.9 4.5 2.1 (13.3)% 85.7%

Depreciation:

Right-of-use asset (125.2) (109.9) (103.2) (13.9)% (21.3)%

Depreciation and

amortisation: Other (168.9) (168.5) (163.2) (0.2)% (3.5)%

Adjusted

operating profit/

(loss)† 199.6 (415.7) 529.4 148.0% (62.3)%

Interest: Lease

liability (124.7) (117.1) (115.1) (6.5)% (8.3)%

Adjusted profit/

(loss) before tax† 74.9 (532.8) 414.3 114.1% (81.9)%

Total statutory revenue was 188.9% ahead of FY21 and 18.6%

down compared to FY20, with H1 statutory revenues down

39.4% versus FY20, improving to up 4.3% in H2.

On a 52-week basis, total accommodation sales were 190.8%

ahead of FY21, and down 13.9% compared to FY20 (H1 down

33.1%, H2 ahead 7.9%).

Open and committed in the UK

91k rooms

INNOVATE

AND GROW

IN THE CORE

UK MARKET

In July 2021, the new flagship Premier Inn in Oxford city

centre at Paradise Square opened its doors.

The new 90-bedroom hotel, including Premier Plus rooms,

has created 27 jobs, will welcome over 35,000 guests

every year and has provided the opportunity to improve

and enhance Paradise Square in Oxford.

FLAGSHIP

PREMIERINN OPENS

IN OXFORD

Whitbread Annual Report and Accounts 2021/22 26

Strategy in Action

Premier Inn UK

key performance indicators

FY22 FY21 FY20 vs FY21

vs FY21

excl. Wk 53 vs FY20

vs FY20

excl. Wk 53

Number of hotels 841 817 820 2.9% – 2.6% –

Number of rooms 82,286 78,718 78,547 4.5% – 4.8% –

Committed pipeline (rooms) 8,332 12,256 13,011 (32.0)% – (36.0)% –

Direct booking 99% 99% 97% 0bps – 200bps –

Occupancy 68.3% 29.4% 76.3% 3890bps 3870bps (800)bps (820)bps

Average room rate† £56.67 £46.16 £61.50 22.8% 22.4% (7.9)% (8.1)%

Revenue per available room† £38.69 £13.57 £46.91 185.1% 183.6% (17.5)% (17.9)%

Sales

growth:

Accommodation 198.0% 190.8% (11.7)% (13.9)%

Food and beverage 170.2% 163.4% (30.9)% (32.7)%

Total 188.9% 181.9% (18.6)% (20.6)%

Like-for-like† sales

growth:

Accommodation 189.8% 182.9% (15.5)% (17.5)%

Food and beverage 166.6% 160.6% (32.6)% (34.3)%

Total 182.2% 175.6% (21.6)% (23.5)%

1 Includes one site in each of: Guernsey, the Isle of Man and Jersey and two sites in Ireland.

2 Includes Government support – see Note 9 of the consolidated financial statementsfor further details.

† See pages 207 to 210 for definitions of alternative performance measures.

COVID restrictions materially impacted the performance of the

UK business during the first half of the year. Only essential

business guests were permitted to stay overnight until 17 May,

at which point overnight leisure stays were permitted. Our

restaurants were also not permitted to open for indoor service

until the same date, with the majority remaining temporarily

closed until then. Our hotels and restaurants then operated

largely restriction-free from 19 July, driving a strong

improvement in revenues from that date.

Leisure demand in the UK Regions was strong post 17 May and

throughout the rest of the financial year, with tradespeople

business demand also resilient throughout. Office-based

business demand remained behind pre-COVID levels, largely

reflecting the various work-from-home guidelines that were in

place during the year.

The London market, and in particular central London (c.7% of

Premier Inn rooms) has lagged the regions during the COVID

pandemic as a result of the low levels of inbound international

travel and subdued business commuting, however trends

improved during Q2, helped by the domestic leisure bounce,

and then in to Q3 as offices reopened.

The emergence of the Omicron COVID variant dampened overall

demand in December 2021 and into January 2022, however

Premier Inn UK total accommodation sales continued to

outperform the market, with trends improving again in February

as most remaining Government COVID restrictions were lifted.

Premier Inn total UK accommodation sales growth was

consistently ahead of the Midscale and Economy market through

the year driving significant market share gains versus the total

market, and demonstrating the strengths of our scale, brand,

direct distribution model and our winning customer proposition.

On a 52-week basis, total food and beverage sales were 163.4%

ahead of FY21 and down 32.7% compared to FY20 (H1 down

51.2%, H2 down 13.3%) with the vast majority of the estate only

reopening on 17 May. The overall value pub and restaurant

sector’s recovery has been slower than other restaurant sectors,

and greater impacted in Q4 by the impact of the Omicron

variant. New menus, enhanced drinks offering, and improved

digital marketing will help drive an improvement in Premier Inn

food and beverage sales into FY23.

Other income of £70.1m reflects a £62.0m benefit from the

Coronavirus Job Retention Scheme (“CJRS”) and other wage

support schemes in Ireland and Jersey and an £8.2m benefit

from other grants. The Group ceased claiming under the CJRS

in May following the full reopening of our hotels and restaurants.

Operating costs of £1,248.6m were in-line with expectations and

44.9% higher than FY21, driven by the impact of estate growth,

an increase in revenue related variable costs (primarily food and

beverage costs of sales), lower levels of the Government’s

business rates benefit, partly offset by cost efficiencies.

Right-of-use asset depreciation was £125.2m and lease liability

interest was £124.7m. During the year, 30 new hotels and 3

extensions were opened, totalling 3,787 rooms and 6 hotels

were exited, including 6 disposals, totalling 219 rooms, as the

Group continues to optimise the estate when opportunities

arise. At the end of the period, the total estate stood at 841

hotels. The committed pipeline of over 8,000 rooms underpins

our opportunity to take market share in the UK in the medium

to long-term as competitor supply contracts.

Adjusted profit before tax in the UK was £74.9m reflecting the

strong increase in statutory revenues compared to FY21 driven

by the lower level of COVID restrictions in place, and the

subsequent higher levels of demand.

UK outperformance vs Midscale & Economy market

H1 Sept Oct Nov Dec Jan Feb

FY22 Q1 to Date

PI accommodation sales

outperformance (vs FY20)

+12.5pp +13.3pp +17.1pp +19.0pp +20.3pp +16.5pp +19.4pp +14.8pp +28.3pp

PI market share

11.2% 9.5% 9.5% 9.2% 8.7% 10.6% 10.6% 10.2% 9.9%

PI market share gains pp

(vsFY20)

+3.9pp +2.4p +2.1pp +1.9pp +2.4pp +3.3pp +2.7pp +3.0pp +2.4pp

1 Excluding 53rd week in FY22.

2 STR data, full inventory basis, 26 February 2021 to 14 April 2022, M&E excludes Premier Inn – restated in line with STR M&E room stock reclassification.

3 STR data, revenue share of total UK market, 26 February 2021 to 14 April 2022.

27Whitbread Annual Report and Accounts 2021/22

Strategic report Governance Financial statements Other information

Entered into relationship with 1st charity

partner elected in Germany, CHILDREN

Employing over 900 people in Germany

Leading customer proposition supported

by excellent guest scores

As part of a long-term solution to support the Premier Inn

expansion in Germany, we opened our first warehouse in

Haiger, Germany.

This set up provides centralised storage and quicker

deliveries to hotels when required, ensures availability of key

products during very challenging times, and also reduces

delivery costs by optimising deliveries to multiple locations.

WAREHOUSE

OPENEDTO SUPPORT

EXPANSION PLANS

Premier Inn Germany

£m FY22 FY21 FY20 vs FY21 vs FY20

Statutory revenue 35.2 11.5 11.8 206.1% 198.3%

Other income (excl

rental income)

44.3 11.5 0.3 285.2% 14,666.7%

Operating costs

before

depreciation,

amortisation and

rent (65.8) (43.9) (23.9)(49.9)% (175.3)%

Adjusted

EBITDAR† 13.7 (20.9) (11.8) 165.6% 216.1%

Net turnover rent

andrentalincome 3.7 3.9 0.8 (5.1)% 362.5%

Depreciation:

Right-of-use asset (22.9) (16.4) (0.8) (39.6)% (2,762.5)%

Depreciation and

amortisation:Other (9.9) (5.4) (1.6) (83.3)% (518.8)%

Adjusted

operatingloss† (15.4) (38.8) (13.4) 60.3% (14.9)%

Interest: Lease

liability (8.5) (6.1) (0.2) (39.3%) (4,150.0)%

Adjusted loss

beforetax† (23.9) (44.9) (13.6) 46.8% (75.7)%

Whitbread Annual Report and Accounts 2021/22 28

Strategy in Action continued

FOCUS

ON OUR

STRENGTHS

TO GROW IN

GERMANY

Total statutory revenue in Germany was up 206.1% compared to

FY21 driven by the growth in the size of the hotel estate. COVID

restrictions in Germany are administered through a complex

framework of national and federal guidelines, resulting in more

wide-ranging restrictions than in the UK, both in terms of nature

and duration during the year.

Open and in the committed pipeline

78 hotels

Total accommodation sales were 176.5% ahead of FY21 on a

52-week basis, reflecting the larger estate. At the end of the

year, the open estate stood at 35 hotels, compared to 30 open

hotels at the end of FY21 and 6 open hotels at the end of FY20.

As in the UK, leisure demand was strong in the summer, and our

hotels in leisure-led locations performed well. Business demand

remained low as a result of the COVID work from home

directives that were in place for most of the year, and the

absence of most trade fairs. A digital marketing campaign,

aimed at establishing the Premier Inn brand credentials in

Germany saw favourable results, with brand recognition scores

improving, albeit still at low levels.

Other income reflects £43.6m of COVID grants from the

German Government. Operating costs increased by £21.9m to

£65.8m due to the investment in the business and the increased

estate size, partially offset by £0.7m relief from the Kurzarbeit

Job Support Scheme in Germany. Right-of-use asset

depreciation costs increased by £6.5m to £22.9m over the same

period, reflecting the fact that the majority of new opened

properties are leasehold. Other depreciation and amortisation

costs were £9.9m, and lease liability interest costs were £8.5m.

The adjusted loss before tax for the year decreased by £21.0m,

compared to FY21, to £23.9m.

During the year, five hotels were opened in Stuttgart, Lübeck,

Düsseldorf, Leipzig and Nürnberg and eight were added to the

pipeline (with one site being removed). The open and

committed pipeline now stands at 78 hotels and over 14,000

rooms, and we are continuing to assess opportunities to

accelerate growth organically and through acquisitions.

2022

2020

14,329

open and

committedrooms

8,709

open and

committed rooms

1,085

rooms open

inGermany

5,875

rooms open

inGermany

Premier Inn Germany key performance indicators

FY22 FY21 FY20 vs FY21

vs FY21

excl. Wk 53 vs FY20

vs FY20

excl. Wk 53

Number of hotels 35 30 6 16.7% – 483.3% –

Number of rooms 5,875 4,880 1,085 20.4% – 441.5% –

Committed pipeline (rooms) 8,454 8,420 8,709 0.4% – (2.9)% –

Direct booking† 97% 99% 91% (200)bps – 600bps –

Occupancy 40.7% 22.5% 58.3% 1820bps 1810bps (1760)bps (1770)bps

Average room rate† £40.53 £40.17 £69.47 0.9% 0.8% (41.7)% (41.7)%

Revenue per available room† £16.49 £9.02 £40.53 82.8% 82.2% (59.3)% (59.5)%

Sales

growth:

Accommodation 185.3% 176.5% 196.9% 189.7%

Food and beverage 369.2% 345.3% 205.0% 191.9%

Total 206.1% 195.9% 198.3% 190.1%

Like-for-like† sales

growth:

Accommodation 114.6% 108.4% (38.9)% (41.1)%

Food and beverage 249.6% 238.7% (40.9)% (43.3)%

Total 129.6% 122.9% (39.2)% (41.5)%

1 Includes Government support – see Note 9 of the consolidated financial statementsfor further details.

2 Total and like-for-like on a two-year basis vs FY20.

† See pages 207 to 210 for definitions of alternative performance measures.

29Whitbread Annual Report and Accounts 2021/22

Strategic report Governance Financial statements Other information

Hemant Patel

Chief Financial Officer

Statutory revenue

Statutory revenue was 189.0% ahead compared to FY21, largely

reflecting the removal of restrictions in the UK in the second

half of the year and the business continuing to trade ahead of

the UK hotel market.

Adjusted EBITDAR

Other income of £114.5m includes £62.0m of benefit recognised

in respect of the Coronavirus Job Retention Scheme (“CJRS”)

and other wage support schemes in Ireland and Jersey, £8.2m

of other UK hospitality grants and £43.6m of benefit in relation

to German Government grants. The Group ceased claiming

under the CJRS in May 2021 following the full reopening of our

hotels and restaurants Operating costs of £1,345.3m were 43.5%

higher than last year driven by the increase in revenue-related

variable costs, the growth in the estate in both the UK and

Germany, the reduced benefit from the UK Government’s

business rates holiday (£56.3m credit in FY22 compared to

£117.8m credit in FY21) and £0.7m relating to the German Job

Support Scheme (£0.9m credit in FY21). Adjusted EBITDAR of

£472.6m (H1: £178.3m, H2: £294.3m) was £667.5m up on FY21 as

a result of the strong recovery in statutory revenues.

Adjusted operating profit

The leasehold estate grew by net 27 sites in the UK and by 4

sites in Germany compared to the same period in FY21. This

resulted in a £21.8m or 17.3% increase in right-of-use

depreciation charges to £148.1m. Other depreciation and

amortisation charges increased by £4.9m to £178.8m, driven by

new hotel openings. The adjusted operating profit of £153.3m

compared to a loss of £486.7m in FY21 and a profit of £486.8m

in FY20.

Net finance costs

Net finance costs (excluding lease liability interest) were £35.9m

compared to £25.2m in FY21. This increase of £10.7m was driven

by the current year interest costs for the £550m Green Bonds

issued in February 2021, and by higher commitment fees in

relation to the updated Revolving Credit Facility.

Lease liability interest of £133.2m was £10.0m above FY21

primarily driven by the opening of net 27 leasehold sites in the

UK and 4 leasehold sites in Germany.

Whitbread Annual Report and Accounts 2021/22 30

FINANCIAL

PERFORMANCE

Chief Financial Officer’s Review

Adjusting items

Total adjusting items were a credit of £74.0m. On 28 June 2021, the

Group disposed of a hotel in Putney, London, 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.

During the period, the Group has recorded profits on other property

disposals of £5.7m.

FY21 adjusting items included a £109.2m impairment charge as a

result of the COVID pandemic, primarily relating to property, plant

and equipment and right of use assets. Subsequent impairment

reviews, reflecting the improved outlook for the Group, have

resulted in an element of the FY21 charge being reversed, and a net

£42.0m impairment credit being recognised in FY22.

In August 2021, 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 2005 to 2013. The Group has submitted claims

which are substantially similar and expects to receive overpaid VAT

of £8.7m.

In addition, during the year, the Group recognised provisions of

£4.4m relating to historic indirect tax matters

Taxation

The tax credit of £10.7m on the loss before adjusting items

(FY21: £94.1m tax credit) represents an effective tax rate on the loss

before adjusting items of 67.7%. This is higher than the statutory tax

rate largely due to adjustments to management’s estimate of

deferred tax arising in respect of prior years, offset by expenditure

not deductible for tax purposes and the impact of German tax

losses not recognised.

The statutory tax charge for the period was £15.7m (FY21: £100.9m

tax credit), representing an effective tax rate of 27.0% (FY21: 10.0%).

The effective rate is driven by the deferred tax charge of £13.1m

relating to the enactment of the increase to the UK corporation tax

rate from 19% to 25%, effective from 1 April 2023, the non-

recognition of German tax losses, offset by the prior year credit.

Statutory profit after tax

The statutory profit for the year was £42.5m, compared to a loss

of £906.5m in FY21, largely driven by the strong recovery in

statutory revenue, reflecting the removal of restrictions in the UK

in the second half of the year and the £74.0m of adjusting items

credits, compared to a charge of £372.3m in FY21.

Financial highlights

FY22 FY21 FY20 vs FY20

Statutory revenue 1,703.4 589.4 2,071.5 (17.8)%

Transitional service agreement revenue 0.0 0.5 9.4 (100.0)%

Adjusted revenue† 1,703.4 588.9 2,062.1 (17.4)%

Other income (excl rental income)

114.5 154.0 13.9 723.7%

Operating costs before depreciation, amortisation and rent (1,345.3) (937.8) (1,323.3) (1.7)%

Adjusted EBITDAR† 472.6 (194.9) 752.7 (37.2)%

Net turnover rent and rental income 7.6 8.4 2.9 162.1%

Depreciation: Right-of-use asset (148.1) (126.3) (104.0) (42.4)%

Depreciation and amortisation: Other (178.8) (173.9) (164.8) (8.5)%

Adjusted operating profit/(loss)† 153.3 (486.7) 486.8 (68.5)%

Net finance costs (excl lease liability interest) (35.9) (25.2) (13.2) (172.0)%

Interest: Lease liability (133.2) (123.2) (115.3) (15.5)%

Adjusted (loss)/ profit before tax† (15.8) (635.1) 358.3 (104.4)%

Adjusting items 74.0 (372.3) (78.3) 194.5%

Statutory profit/(loss) before tax 58.2 (1,007.4) 280.0 (79.2)%

Tax credit/(expense) (15.7) 100.9 (62.1) 74.7%

Statutory profit/(loss) for the year 42.5 (906.5) 217.9 (80.5)%

1 Includes Government support – see Note 9 of the consolidated financial statements for further details.

† See pages 207 to 210 for definitions of alternative performance measures.

Earnings per share

FY22 FY21 FY20

vs FY20

Adjusted basic

(loss)/earnings

pershare† (2.5)p (287.6) 166.3 (101.5)%

Statutory basic

(loss)/earnings

pershare 21.1p (481.9) 125.3 (83.2)%

1 Restated to include the impact of the Rights Issue completed in June 2020.

† See pages 207 to 210 for definitions of alternative performance measures.

Adjusted basic loss per share of 2.5p reflects the adjusted statutory

loss for the year. Statutory profit benefited from an adjusting items

credit for the year resulting in a statutory basic profit per share of

21.1p.

Dividend

At the start of the pandemic the Group negotiated covenant

waivers on its revolving credit, which prevented the payment of a

dividend until March 2023 or such time as the Group reverted to

and passed its original covenants.

Following the release of these financial statements, and in line with

the continued dialogue the Group maintains with its lending banks,

the Group will notify its lending banks of its intention to remove

these covenant waivers, and will subsequently issue a compliance

certificate to reinstate the original pre-COVID covenants.

Dividend payments can then recommence, with the Board

recommending a final dividend of 34.7 pence per share on 27 April

2022, reflecting both the Group’s strong balance sheet, encouraging

trading, and confidence in the recovery outlook. This will result in a

dividend payment of £70m. The final dividend will be paid on 1 July

2022 to all shareholders on the register at the close of business on

27 May 2022. Shareholders will again be offered the option to

participate in a dividend re-investment plan. The Group’s dividend

policy has been reinstated to grow the dividend broadly in line with

earnings across the cycle. Full details are set out in note 11 to the

accompanying financial statements.

Cash flow

Total net cashflow before shareholder returns and debt repayments

was an inflow of £187.0m, driven by a recovery in adjusted EBITDAR

to £472.6m, which compared to a loss of £194.9m in FY21, a working

capital inflow of £182.5m and £56.4m property disposal proceeds.

The net cashflow also benefited from the credit of £170.8m COVID

Government grants and support schemes.

31Whitbread Annual Report and Accounts 2021/22

Strategic report Governance Financial statements Other information

Cash flow

£m FY22 FY21

Adjusted EBITDAR† 472.6 (194.9)

Change in working capital 182.5 (99.8)

Net turnover rent and rental income 7.6 8.4

Lease liability interest and principal lease payments (258.3) (202.2)

Operating cashflow† 404.4 (488.5)

Interest (excl lease liability interest) (18.0) (20.8)

Corporate taxes (0.1) 19.1

Pension (14.8) (14.8)

Capital expenditure: maintenance (93.5) (69.9)

Capital expenditure: expansionary

(167.5) (159.6)

Acquisitions – (1.1)

Disposal Proceeds 56.4 2.6

Other 20.1 28.4

Cashflow before shareholder returns/receipts and debt repayments 187.0 (704.6)

Proceeds from Rights Issue – 981.0

Proceeds from green bond – 546.8

Repayment of long-term borrowings (303.9) (75.1)

Net cash flow (116.9) 748.1

Opening net debt† (46.5) (322.9)

Issuance of green bond – (546.8)

Repayment of long-term borrowings 303.9 75.1

Closing net cash/(debt)† 140.5 (46.5)

1 FY22 includes £1.8m loans advanced to joint ventures, £36.3m payment of contingent consideration (FY21: £3.8m) and £1.4m capital contributions to joint ventures (FY21: £1.3m).

† See pages 207 to 210 for definitions of alternative performance measures.

Debt funding facilities and liquidity

£m Facility Utilised Maturity

Bond (450.0) (450.0) 2025

Green Bond (300.0) (300.0) 2027

Green Bond (250.0) (250.0) 2031

Revolving credit facility (125.0) 0.0 2022

Revolving credit facility (725.0) 0.0 2023

(1,850,0) (1,000.0)

Cash and cash equivalents 1,132.4

Total facilities utilised, net of cash

132.4

Net cash† 140.5

Net cash and lease liabilities† (3,561.3)

1 Excludes unamortised fees associated with debt instrument.

† See pages 207 to 210 for definitions of alternative performance measures.

The Group’s aim is to manage to investment grade metrics of

FFO lease adjusted debt of <3.5x Net Debt over the medium

term. Whilst the Group remains below its historic profit levels,

the strong balance sheet cash position and freehold assets

support our investment grade rating.

Following the release of these financial statements, The Group

will notify its lending banks of its intention to remove the

covenant waivers that exist on the revolving credit facility, and

issue a compliance certificate to reinstate the original

covenants, being:

› Net Debt

/EBITDA

< 3.5x,

› EBITDA

/Interest

>3.0x

2 Adjusted pre-IFRS 16.

The £182.5m working capital inflow was primarily driven by a

£101.8m increase in customer deposits and a £44.0m increase in

trade creditors and accruals following the strong trading across

the last quarter and the business returning to more normal

levels of trading. This has resulted in current trade and other

payables increasing to £570.7m (FY21: £316.5m) and an increase

in trade and other receivables to £116.4m (FY21: £74.2m).

Corporation taxes outflow of £0.1m related to Germany.

Nocorporation tax was paid in relation to UK profits due

totaxable losses being incurred.

Lease liability interest and lease repayments increased by £56.1m

to £258.3m driven by the higher number of leasehold properties

entering the estate, particularly in Germany, and reflect the

delayed payment of a proportion of the December 2020 quarter

rent payment that would normally have been paid in FY21.

Maintenance capital expenditure was £93.5m and expansionary

capital expenditure was £167.5m, resulting in overall full year

spend of £261.0m. The £20.1m other inflow is driven by an

£8.7m VAT claim, £12.9m of share-based payments and £4.3m

of other provision movements.

Disposal proceeds of £56.4m relate to the sale and leaseback

transaction of a hotel in Putney, London, the sale of an unused

corporate office and the disposal of six hotels, as the Group

continues to take the opportunity to optimise the estate when

opportunities arise.

During the year £283.5m of US private placements were repaid,

incurring £21.2m of make-whole fees partly offset by a £0.8m

credit relating to foreign exchange movements. There are now

nooutstanding US private placements. Net cash at the end of

theperiod was £140.5m.

Whitbread Annual Report and Accounts 2021/22 32

Chief Financial Officer’s Review continued

The Revolving Credit Facility which is currently £850.0m,

willstep down to £725.0m at 7 September 2022.

During the year, £200.0m US private placement notes were

repaid on 26 March 2021, with £25m US private placement

notes repaid on 6 September 2021 and the remaining US private

placement notes of £58.5m repaid on 14 December 2021.

Thereare now no outstanding US private placements.

Capital investment

£m FY22 FY21

UK maintenance and product

improvement 91.3 68.6

New/extended UK hotels

79.7 63.2

Germany and Middle East

90.0 98.8

Total 261.0 230.6

1 FY22 includes £1.8m loans advanced to joint ventures.

2 FY22 includes £36.3m payment of contingent consideration (FY21: £3.8m) and

£1.4m capital contributions to joint ventures (FY21: £1.3m).

Total capital expenditure in FY22 was £261.0m, this is lower than

expectations (£275m) as a result of the Group’s refurbishment

programme being delayed by supply chain issues.

Expenditure included £79.7m on developing new sites and

extending existing sites in the UK. In Germany, spend was driven

by the acquisition of a hotel at Berlin Airport and deferred

consideration relating to the Foremost acquisition in FY20.

Property, plant and equipment of £4,227.1m was in-line with

FY21 (£4,213.1m), with capital expenditure largely offset by

depreciation charge.

Property backed balance sheet

Freehold/leasehold mix Open estate

Total estate

including

pipeline

Premier Inn UK 58%:42% 55%:45%

Premier Inn Germany 26%:74% 23%:77%

Group 56%:44% 50%:50%

The current UK estate is 58% freehold and 42% leasehold, a

mix that will change to 55% freehold and 45% leasehold as the

existing pipeline is delivered. The higher leasehold mix in

Germany reflects the start-up nature of the business, where

securing optimal site location, particularly in city centres to

help build brand strength, is key.

The new site openings in Germany and continued expansion in

the UK has resulted in right-of-use assets increasing to

£3,267.6m and lease liabilities increasing to £3,701.8m.

Return on capital

The Group remains confident in our ability to deliver long-term

sustainable returns on incremental investment. We believe our

ability to capitalise on the enhanced structural opportunities

that are likely to exist, combined with the competitive

advantage of our ownership and operating model, and ongoing

initiatives including segmentation and site optimisation, will

help offset any adverse structural impact as a result of the

COVID crisis. Sector-wide cost headwinds can be countered by

our long-standing efficiency programme, pricing power and the

benefits of both organic and inorganic growth.

Central and other costs

FY22 FY21 FY20 vs FY21 vs FY20

Operating costs before depreciation, amortisation and rent (31.3) (26.2) (27.1) (19.5)% (15.5)%

Share of profit/(loss) 0.4 (6.0) (2.1) 106.7% 119.0%

Adjusted operating loss† (30.9) (32.2) (29.2) 4.0% (5.8)%

Net finance costs (35.9) (25.2) (13.2) (42.5)% (172.0)%

Adjusted loss before tax† (66.8) (57.4) (42.4) (16.4)% (57.5)%

† See pages 207 to 210 for definitions of alternative performance measures.

Central operating costs of £31.3m were £5.1m higher than FY21

primarily driven by increased staff costs and the impairment of a

loan to a joint venture. Net finance costs increased by £10.7m to

£35.9m primarily as a result of interest costs on the £550m Green

Bonds issued in February 2021, and by higher commitment fees

in relation to the updated Revolving Credit Facility.

Events after the Balance Sheet date

On 7 March 2022, the Group entered into a sale and leaseback

transaction in relation to a property in Marylebone, London

receiving proceeds of £46.4m.

Pension

The Group’s defined benefit pension scheme, the Whitbread

Group Pension Fund (the "Pension Fund"), had an IAS19 Employee

Benefits surplus of £522.6m at the end of the year (FY21: £188.0m).

The improved funding position was primarily driven by an increase

in corporate bond yields resulting in an increase in the discount

rate and asset performance being higher than the discount rate.

Aligning the discount rate methodology to reflect common market

practice has also contributed to the improved position. This was

partially offset by higher than expected inflation during the year

and an increase in the expectations for future inflation.

The triennial actuarial valuation of the Pension Fund as at

31 March 2020 has been completed. This resulted in a surplus

ofassets relative to Technical Provisions of £55m. As a result,

nodeficit reduction contributions are due, however annual

contributions of approximately £10m will continue to be paid to

the Pension Fund through the Scottish Partnership arrangements.

As part of the valuation discussion, Whitbread and the Pension

Fund Trustee have agreed changes to the security package that

supports the Pension Fund. The EBITDA related covenant, which

was due to have been tested in March 2022 and if breached

would have resulted in a cash payment to improve the funding

position to the value of the Secondary Funding Target, has been

permanently removed. The security that the Trustee holds over

£500m of Whitbread’s freehold property (and which was due to

reduce to £450m in March 2022) 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: £500m; and 120% of the buy-out deficit and will remain

in place until there is no longer a buy-out deficit.

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 in note 2 of the attached

financial statements.

Hemant Patel

Chief Financial Officer

27 April 2022

Whitbread Annual Report and Accounts 2021/22

Strategic report Governance Financial statements Other information

ARE AT THE

HEART OF

WHAT WEDO

Chief People Officer's review

OUR PEOPLE

I am incredibly proud to be part of Whitbread,

and have experienced our special culture

first-hand since joining in September. Our

teams are such a critical part of the experience

we give to our guests, and have been an

essential part of our COVID-19 response

overthelast 12 months.

It has been another challenging year, with COVID-19

restrictions continuing to impact sites across the UK and

Germany, and supply chain challenges affecting us across the

business. All our teams, across the UK, Ireland, Germany, UAE

and China, have coped admirably, really demonstrating our

values of genuine, confident and committed whilst navigating

the ever-changing restrictions with efficiency, pride and care.

It has also been a year where the hospitality industry has been

in crisis, with well-publicised team shortages across the

summer months as well as supply chain challenges. These

challenges were ones that within Whitbread we faced head

on, particularly recruiting team members throughout the

summer of 2021 where our headcount grew to nearly 36,000

people.

Caring for our teams

Our special culture at Whitbread has really helped us

navigatethe challenges and complexities of the last 12 months.

We truly care for our teams, and over the last year we have

demonstrated this through greater investment in wellbeing

(physical, mental and financial), reflecting the challenges,

increased uncertainty and anxiety the pandemic has created.

We provided our teams with communications, support and care

as they were navigating a variety of new, uncharted challenges.

There is more detail on our wellbeing initiatives on page 43.

Investing in pay and reward for our teams

Financial wellbeing is a key area of importance for our teams,

and we have invested significantly in reward and recognition

forour front-line teams throughout this year. Early in the year,

we continued to utilise the Government Job Retention Scheme

in the UK until May 2021 when restrictions were lifted. In April

2021, we increased the pay for all our teams by 2%. Following

this, in May 2021, we rewarded all Whitbread employees across

the UK and Germany with a special recognition payment – to

say thank you for their support and service in the height of the

pandemic. Weare also proud to have awarded c.29,000 team

members across our hotels and restaurants with a summer

bonus – an extra week’s pay for those who stayed with us over

the summer months. In the autumn we then followed this by

increasing allhourly pay rates by a minimum of 5%. In Germany,

we implemented tariff increases in 2021 in two federal states

with anaverage of a 7% increase to our teams.

In addition, this year we have invested £150,000 in hardship

grant funding to be available to our UK-based teams. Through

our partners Hospitality Action, we are proud to have this offer

for our teams when and if they need further financial support,

preventing them from needing alternative, higher interest,

financial funding.

Rachel Howarth

Chief People Officer

34Whitbread Annual Report and Accounts 2021/22

Listening has been crucial throughout this year

We believe that great experiences for our guests start with great

experiences for our teams. Across the year we continued to listen

to our teams through surveys, listening groups and our Employee

Forum, which we call Our Voice. Regularly listening to our teams

through a range of channels enables an understanding of the

quality of the team member employment experience so that it

can be improved, supporting higher team retention.

We value difference at Whitbread

Over the last 12 months, we are pleased to have made measurable

progress against our eight Diversity and Inclusion commitments,

which were launched in September 2020. The detail on this can

befound on page 41. It was fantastic to be recognised in the 2022

Financial Times Diversity Leaders Index, ranked at number 24

across Europe, as well as achieving 1st place in the leisure,

hospitality and travel sector and a Gold Award for Excellence

inthe Stonewall Workplace Equality Index 2022.

Software Engineering Manager – based in Holborn

Digital Office

I started with Whitbread in 2016, when our digital function

was in its early growth phase. As a developer, I enjoyed

the freedom, autonomy and the positive culture. Being

part of an agile team was great, and my scrum team was

like a family, with a clear roadmap of deliverables.

I work on guest-facing digital projects, as part of the

mobile team, working closely and collaborating with the

web team on the Premier Inn website. I enjoy working on

projects that have a direct impact on our guests as you

can get direct feedback.

My experience within Whitbread has been very positive,

with supportive line managers who have helped me grow

and develop my career. I had opportunities to develop my

career with Whitbread and I chose a role where I now

manage my own team. I love working with people and

supporting others with their own personal growth.

OPPORTUNITY

FREDDIE

PARKS

Front of House – Brewers Fayre, The Hampton,

Peterborough

I was aware Whitbread offered qualifications, and I was

looking for a way to gain a qualification while I was working.

I am studying a Hospitality Level 3 apprenticeship. I’m

really enjoying the opportunity to learn while working

onsite, and I’m now taking on more responsibility. I am

also completing my English and Maths qualifications,

improving my English and Maths as I go.

One great thing is how flexible my apprenticeship is.

Ialways work afternoons and evenings, enabling me

tomake sure I’m home for my children, including the

school drop-off andwhen they get home from school.

My coach is accommodating, putting in our calls at

suitable times andbeing available when needed.

The apprenticeship has helped with my personal

development to step up from a team member to a

salaried role in the future. It has boosted my confidence

at work. I feel like I could be a manager in the future.

OPPORTUNITY

No barriers to entry and no limits to ambition

At the heart of it, we are a people business, and our teams make

us special by bringing to life our values of genuine, confident

and committed every day. That’s why we are passionate about

creating the best experiences for our teams – from the moment

they think about joining us to walking through our doors on

their first day, to progressing a fulfilling career with us through

our excellent training and development programmes, including

our range of management development apprenticeships which

launched this year.

Once again, we are proud to be recognised as a ‘Top Employer’

in the UK by the Top Employers Institute. This marks our 12th

consecutive year and reinforces our ongoing commitment to

be the best place to work for our teams and a business that

people seek to be part of. This accreditation is only awarded

to companies with the highest standards of excellence, helping

us gain further insight and feedback to make the experience

even better for our teams and those thinking of a career in

hospitality.

How we have cared for our teams throughout 2020 and 2021

issomething for us to be really proud of, and everything we

have put in place sets us up well for an exciting 2022 and

beyond. I am very excited to be part of the journey.

Rachel Howarth

Chief People Officer

27 April 2022

JUSTYNA

ROWLEY

35Whitbread Annual Report and Accounts 2021/22

Strategic report Governance Financial statements Other information

IS AT THE

CORE OF

WHAT WEDO

Over the last year we have had many milestones and moments

tobe proud of. Not only did we sign up to Race to Zero ahead

ofCOP26 but we went a step further and brought forward our

pledge to reach Net Zero Scope 1 and 2 carbon emissions by a

decade to 2040. We have also set new targets to reduce Scope 3

emissions by 50% by 2035 and 64% by 2050, and this year, we

have committed to achieve full SBTi accreditation.

In February our work on inclusion was recognised through our

2022 Stonewall Workplace Equality Index score, where we were

placed 1st in the leisure, travel and tourism sector and received

a gold award for excellence in LGBTQ+ inclusion. As a sponsor

of our LGBTQ+ network (GLOW) this was particularly satisfying

for me, giving well-deserved recognition to the engagement

with, and within our teams, and the work of the People and

Diversity and Inclusion teams.

We have of course been watching the unfolding humanitarian

crisis in Ukraine. With so many families displaced through this

tragic situation, we have considered how best we can provide the

support which is so needed. We have not only committed to divert

all fundraising raised for three months from March 2022 to the

Disaster Emergency Committee (DEC), underwriting a minimum

of £500,000, but we are also working with other charities to

donate bedding to those in need. We continue to asses ways that

we can support, for example in the provision of rooms to refugees.

Contributing to charitable causes has always been a core part

ofthe Whitbread culture, and we will celebrate our 10-year

anniversary later in 2022 with Great Ormond Street Hospital

Children's Charity (GOSH Charity). This year we hit our target of

raising £20 million and a personal highlight for me was the

opening of the Sight and Sound Centre supported by Premier

Inn, the UK’s first dedicated medical facility for children with sight

and hearing loss. This would not have been possible without the

fundraising of our teams, suppliers and the generosity of guests.

Whitbread’s commitment to GOSH Charity was cemented this

year as they came top in a charity partner re-pitch, and I am

delighted to say that we have agreed to extend our partnership

Being a Force for Good is at the core of our

business. We aim to drive meaningful change

as a result of our programme, and we believe

that a combined focus on our three pillars –

Opportunity, Community, and Responsibility,

with the overall aim of enabling people to

liveand work well, does just that. Force for

Goodencompasses our approach to social

andgovernance issues, addresses our

environmental impact and ensures we

haveapositive impact on the many people

andcommunities our business touches.

This year has been another difficult one with COVID-19

restrictions continuing to impact our operations. All our

teams have played their part in navigating these ever-

changing restrictions with pride and care, but above all

safely, as well as managing the supply chain challenges

thatwe have seen across the business. It is important

topaytribute to the brilliant work which our teams do

everyday, across all our sites, be that in the UK, Ireland,

Germany, UAE or China.

Within this ever-changing environment, we have continued

towork hard behind the scenes to evolve our Force for

Goodstrategy, driving forward with new initiatives and targets

while maintaining the day-to-day running of our programmes.

I want to take this opportunity to thank all our teams who

areso crucial in ensuring that we meet our targets.

Chris Vaughan

General Counsel

Whitbread Annual Report and Accounts 2021/22 36

Force for Good Introduction

SUSTAINABILITY

with GOSH Charity. We undertook this to make sure that our

teams have input into the charity that they fundraise for.

We have of course continued with our efforts on other fronts:

making progress with our stretching Diversity & Inclusion

targets, reducing food waste, and ensuring that all of our

critical commodities are sourced responsibly.

This year we have also undertaken our annual materiality

assessment, reaching out to internal and external stakeholders

to ensure that the issues that we are tackling are the most

material to the business. It is always interesting to see the

results and to anticipate new trends and areas to explore.

Itwas great to see that the key issues that came out top are

already on our agenda with a few interesting areas to explore

more fully this year, such as biodiversity.

With such a strong foundation in place I am excited to move

into the new year with a clear focus on the delivery of our

targets. Key priorities for the next 12 months will be working

with our suppliers to develop a clear trajectory to reach our

Scope 3 targets, achieving our SBTi status for Scope 1 and 2

emission targets and continuing to build our partnership with

GOSH Charity. I also want to make sure that we communicate

our Force for Good progress more widely, and effectively, not

just ensuring our teams are engaged but to work more widely

with the industry and to ensure customers and other key

stakeholders see more of the work that we do.

Force for Good is what continues to make us stand out in a

competitive marketplace. As a business with such a large scale,

we know that every little thing we do can make a big impact

when we work together. Force for Good is how we drive this,

and we see it every day in our team’s commitment to go the

extra mile for each other, our guests, and the world around

them. Weare looking forward to building on this and harnessing

the opportunities, innovation, and excitement that Force for

Good brings to the business.

Chris Vaughan

General Counsel

27 April 2022

OPPORTUNITY

A team where everyone can reach their

potential – no barriers to entry and no

limitations to ambition.

COMMUNITY

Making a meaningful contribution

tothe customers and communities

weserve.

RESPONSIBILITY

Always operating in a way

that respects people and the planet.

Our strategy is split into three pillars…

Allowing us to…

Force for Good in 2021/22

Which helps us to do business in the right way, supporting our…

Teams

› Championing inclusivity

and improving diversity

› Industry-leading

training and

development

› Team member

wellbeing is considered

in everything we do

Environment

› Science-based targets

to reduce our carbon

emissions intensity

› Eliminating unnecessary

single-use plastics

› Reducing food waste

Communities

› Supporting our

communities’

economies

› Supporting our charity

partners to meet

theirmission

› Community

engagement e.g.

volunteering schemes

Suppliers

› Sourcing responsibly

and with integrity

› Respecting the human

rights of everyone in

our supply chain

› Ensuring our suppliers

are paid on time

Guests

› Improving the

nutritional value

ofourmenus

› Ensuring the highest

levels of safety

› Developing an

environmentally

friendly customer

proposition

Enabling us to drive growth at good returns and deliver long-term value

Attract more customers Lower energy consumption

Increase productivity Benefit local communities

Motivate our workforce Adapt our business model

Source responsibly Reduce waste

37Whitb read Annual Report and Accounts 2021/22

Strategic report Governance Financial statements Other information

Q&A with RachelHowarth

&ChrisVaughan

What are you most proud of achieving

thisyear?

This year has been another challenging year, for many

reasons. I’m proud that we have continued to push forward

the Force for Good agenda amid much uncertainty. Be that

fundraising for our partner charity, continually improving our

supply chain credentials, or setting targets for our Scope 3

emissions. Not only that, we have actually managed to

enhance some of our targets this year, for example, bringing

forward our Scope 1 & 2 Net Zero target by ten years to

2040. The Green Bond allocation and our first full TCFD

report also stand out for me.

This year has been a complex year to navigate, and the highlight

for me is how our teams across the business have really

stepped up to deliver a great guest experience, amid differing

restrictions, labour shortages and supply chain challenges,

amongst others. Our teams have truly delivered, for each other

and for our guests, and this makes me immensely proud.

Why is it so important to have a programme

like ForceforGood?

We know that sustainability programmes are expected and

have become non-negotiable for businesses like ours – it's

part and parcel of running a great business. More and more

consumers are concerned with the sustainability credentials

of the companies they spend their money with – and, of

course, our shareholders expect it, too. Force for Good is

also a source of pride within the teams and an agenda they

can really rally around. It gives us clear targets and structure,

so we can plan our response to the many pressing

environmental and social challenges we face.

How embedded is Force for Good

acrossWhitbread?

It's truly embedded across all our departments. We have

ourcore sustainability team who manage the strategy

development, drive progress and coordinate reporting,

butthe delivery of most of our key targets happens through

the line, where change and impact can really be harnessed.

Delivery of our Opportunity pillar, for example, sits within

our People function; our Community pillar within our

operations and restaurants teams; and our Responsibility

pillar within property and procurement. We know that it’s

important to our team members to work for a company that

makes responsible social and environmental choices. Force

for Good is a key part of induction and we aim to embed

this throughout the organisation, from housekeeping to

procurement and finance. With a large, ever-evolving

programme, we are always working to engage with our

teams; to hear more from them and improve our operations

to ensure that we can meet our targets.

Our teams are really engaged with Force for Good, and the

different areas it covers are ones that are important to them.

In particular, we know our teams are especially enthusiastic

about our charity partnership and really enjoy fundraising

and supporting them.

Whitbread Annual Report and Accounts 2021/22 38

FOCUSED

ON A FORCE

FOR GOOD

Force for Good Q&A

How are we embedding sustainability

andForce for Good in ourfinances?

This year has been a game changer for us in terms of how we

incorporate sustainability into our finances. We have allocated

£404 million of the £550 million Green Bond which we issued

last year and have also released our first full TCFD report to

analyse the risk posed to the business from climate change.

This work is key to futureproofing our business and an

exciting opportunity to engage with new investors and

stakeholders around sustainability.

It has been widely reported that the pandemic

has meant staff shortages in hospitality. How

has Whitbread been impacted in the last

12months?

The whole industry has experienced both recruitment and

retention challenges across the last year, which has been

widely reported across the media for the hospitality sector.

We have faced shortages in our teams, both directly and

indirectly in our supply chain.

Our teams want to deliver a great experience for our guests

who come to stay and dine with us, and this has been

incredibly challenging, particularly through the summer

months in 2021. During this time, our teams have taken a great

deal of pride and resilience in finding a way to still deliver great

service. Whilst the year has been challenging, we have been

delighted to welcome over 20,000 new joiners to our teams

this year, and I really feel that we are ending the year well

placed to deliver a great experience for our guests in 2022.

How have we supported our teams during

thepandemic?

On joining Whitbread in September 2021, our special culture

and what it means to work here is something that has really

struck me.

We have truly cared for our teams throughout this

pandemic, in terms of both their safety (through many

listening forums and initiatives), and their mental, physical

and financial wellbeing (through increased communications,

manager capability and other initiatives detailed in the

Opportunity section). I am particularly proud of how we

supported our teams financially throughout lengthy furlough

periods, alongside the significant pay intervention in autumn

2021 which increased all hourly pay rates by a minimum of

5%, which was on top of a 2% increase in April 2021. The

cumulation of all these initiatives leaves an enhancement of

this special culture at Whitbread, which we can build on in

2022 and beyond.

How will energy prices impact our Force

forGood programme?

We are operating in a volatile marketplace and have seen prices

rise across the board. We use renewable electricity across our

UK, owned and operated estate, and will continue to do this as a

core part of our Net Zero by 2040 commitment, and we invest

capital in energy saving products such as synergy grills and heat

pump technologies. We’re working hardto create efficiencies

across our estate to drive down theamount of energy we rely

on, overall, as well as working with our team members at site

level to manage our energy efficiently. This next year we will

have energy as an indicator onour WINcard, ensuring we

incentivise energy reduction, helping to reduce energy demand

and soften the impact of price rises.

How is Whitbread supporting the wellbeing

ofits teams?

Wellbeing is really part of our culture at Whitbread – we care

about our teams, and this has never been more important than

during the last two years. We have a Wellbeing Strategy that

focuses on four areas of accountability – the line manager,

peers and colleagues, the individual and the organisation.

Alarge part of supporting wellbeing is how we support the

individual, and we have increased communications, have a

newWellbeing Hub of information, and ensure wellbeing

conversations happen in performance reviews.

Organisationally, we have also increased the number of

mental health first aiders, invested in additional financial

support through hardship grants, and of course we have

ourEmployee Assistance Programme, Hospitality Action,

which can support our teams and line managers any time

and in multiple languages.

What is next for Diversity and Inclusion

commitments withinWhitbread?

Our Diversity and Inclusion commitments have given

usaclear focus since they were launched in 2020, and

Iamproud of the progress we are making, both with our

representation levels vs our targets, and also how we

continue to embed a culture of inclusion for all, ensuring

there are no barriers to entry and no limits to ambition,

foranyone, however they identify.

As we are well on course to exceed our Diversity targets,

now is the right time to look even further ahead, and bring

in even more stretching targets looking ahead to 2026.

These are detailed in the Opportunity section of the report,

and demonstrate that getting to our 2023 targets is not

enough – we will continue beyond these, with our aim to

reflect society as a whole.

What are you most excited about in the

comingyear?

I’m looking forward to making good progress against our

carbon targets – we’ve set more targets, and it’s time to

deliver against them. We will be continuing our trialsof new

technology across the estate to help shape ourglide path to

80% reduction by 2030 and then more beyond that to Net

Zero. Addressing our Scope 3 targets is also something I’m

really looking forward to getting going – as the largest part

of our emissions, it is vital that we work with our suppliers to

reduce these where we can. And lastly, engaging more with

our staff, customers and stakeholders on our programme. I

truly believe Force for Good could be a USP for our brands,

and we want to try and make that happen.

As we come out of the pandemic, I'm really looking forward

to having a full year's trading, and I’m excited about the

opportunities that will bring us as a business across both

theUK and Germany. Since I joined Whitbread I have met

somany of our teams who have passion for hospitality,

andIknow that our teams are excited to get back to doing

what they love – serving our guests and helping them create

special moments.

Whitbread Annual Report and Accounts 2021/22

Strategic report Governance Financial statements Other information

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, at times even bringing

our timelines forward, and ensuring we remain focused on

driving positive change and creating value, while mitigating

anynegative impact that our operations might have.

Our targets, our progress against them and more information

on the work we have done can be found on pages 40 to 47.

A team where everyone can reach their potential with

no barriers to entry and no limitations to ambition.

OPPORTUNITY

TARGET PROGRESS AGAINST TARGETS IN 2021/22

We will be for everyone, championing inclusivity and

drivingdiversity

To have greater diversity in our leadership population,

withatarget of 8% ethnic minority and 40% female

representation by 2023

42%

Female representation, an increase of 5% from last year

ethnic minority representation, an increase of 2.8% from

last year in our leadership population as of 3 March 2022

Through our apprenticeship programmes we will support

people to find and develop their hospitality careers

274

apprenticeships completed this year within our teams

We aim to promote internal succession above external

recruitment and will support our teams in this endeavour

2/3

of the promotions in our management teams were internal

this year

We will be bold about broadening career opportunities,

supporting cross-functional and meaningful career

development

Continued progress – more detail can be found on page 42.

We will listen genuinely to our teams, ensuring their

viewshelp inform decision making

Continued progress – more detail can be found on page 42.

We will support the physical and mental wellbeing

ofourteams

Continued progress – more detail can be found on page 43.

Whitbread Annual Report and Accounts 2021/22 40

2021/22 ANNUAL REPORT

SUSTAINABILITYTARGETS

Force for Good

2021/22 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 career opportunities with

team wellbeing, underpinned by an

environment that is inclusive and

allows everyone to be themselves.

We will be for everyone, championing inclusivity and

driving diversity

Wewant to be as diverse as the communities we serve,

andcreate an environment for ourteams and guests where

difference is valued. This year we have accelerated our

progress against our Diversity and Inclusion commitments,

which were put in place in 2020 to drive our progress. As a

result of strong progress todate, we have stretched and

extended our targets with additional 2026 representation

targets for gender and ethnicity in our leadership population.

We are pleased to be making progress with the diversity of our

leadership community, and proud to have been highlighted in

the 2021 FTSE Women’s Leaders review in the top ten across

the FTSE 100 for female representation at Executive/Direct

Reports level. We currently have 42% female representation,

and 5% ethnic diversity in our leadership population, and are

on track to deliver our 2023 diversity targets of 40% female

representation and 8% ethnic minority representation. We are

confidently on our way to achieving our 2023 targets, and

therefore now is the right time to stretch ourselves further,

recognising that we want to be as diverse as society at all

levels of our organisation. Our new 2025/26 targets stretch

female representation to 45% and minority ethnic

representation to10%, in our leadership population.

We have focussed significantly on our inclusion commitments

this year, with a belief that creating an environment of belonging

for our teams and guests is one of the most important actions we

can take. Our inclusion networks have been central to this work,

and we are proud to now have four that represent communities

that are under-represented in society – Gender Equality, enAble

(disability), GLOW (LGBTQ+) and Race, Religion and Cultural

Heritage. In addition, in Germany we have introduced our

inclusion networks for the first time, launching Accessibility

andGLOW to our German teams.

Our work on inclusion has been recognised through our 2022

Stonewall Workplace Equality Index score, where we were

placed 1st in the leisure, travel and tourism sector and received

a gold award for excellence in LGBTQ+ inclusion.

Our commitments to greater diversity:

› To have greater diversity in our leadership population,

witha target of 8% ethnic minority and 40% female

representation by 2023, stretching to 45% female

representation and 10% ethnic minority by 2025/26

› 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

› 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

› Celebrate key events throughout the year

Executive Committee

Women

2 25%

Men

6 75%

Leadership community**

Women

35 42%

Men

49 58%

All employees

Women

24,168 65%

Men

12,816 35%

* As an inclusive organisation, we recognise all gender identities, and understand that

not all our teams will identify as male or female.

** Leadership community is defined by reference to grade and includes those we deem

to be in a senior management role and their direct reports

Gender*

41Whitb read Annual Report and Accounts 2021/22

Strategic report Governance Financial statements Other information

We will listen genuinely to our teams, ensuring their views

help inform decision making

Across the UK and Germany, we have completed a significant

amount of listening throughout the year. Pulse surveys,

introduced during the pandemic, have now become our

preferred way of understanding our teams’ experiences in

boththe UK and Germany. In the UK, over 7,000 team members

and managers from across our UK hotels and restaurants took

part in our autumn pulse survey. It was pleasing to see that the

focus on keeping our teams safe as restrictions eased had been

maintained, with 87% of respondents indicating that they felt

COVID-19 safe at work. We also maintained good scores against

areas of cultural strength; 86% of respondents reported fair

treatment regardless of personal background, 86% felt they

could be themselves at work (a key measure of inclusion) and

85% reported being trained well to perform their role.

Within our UK Support Centres we have regularly surveyed our

central teams. The surveys indicate that despite a prolonged

period of working from home, we have maintained areas of

cultural strength; 92% felt it was important that Whitbread is

aForce for Good, 92% were clear on how their role supports

Operations, and 88% feel able to be themselves at work. In

addition, 85% were proud to say they work for Whitbread.

In Germany, we conducted two pulse surveys in 2021. In our

most recent pulse survey, 77% of our teams felt well connected

to their team and 67% felt well informed about the business

andadjustments in their daily work.

Our Employee Forum; which we call Our Voice, is made up

offormally elected representatives from across our hotels,

restaurants and Support Centre. Our Voice is designed to

connect our senior leaders with our front-line teams for

two-way conversations about the business. Across this year,

sections of our representative community have regularly met

with Alison Brittain, Chief Executive; Simon Ewins, Managing

Director, UK Hotels & Restaurants; Nigel Jones, Group

Operations Director; Rachel Howarth, Chief People Officer and

our Operations Directors, tounderstand business challenges

from the perspective of ourteams and to ensure that ‘employee

voice’ helps shape decisions that solve those challenges.

In May 2021, the Our Voice representatives had a pivotal role

insupporting the reopening of our hotels and restaurants to

ensure that any COVID-19 concerns were resolved. By working

closely with senior leaders, they relayed any concerns they

heard, helping us successfully reopen whilst maintaining the

confidence of our teams in our approach to keeping our

customers and our teams safe. The representatives within

Support Centre took the same approach as we reopened

ouroffices in the autumn.

Our representatives have also highlighted the increasing

importance of ensuring that wellbeing is considered in

everything we do and their feedback has helped shape

ouractivity plan into 2022.

General Manager, Brewers Fayre, Old Brickworks, Leeds

Member of the Race, Religion and Cultural Heritage

Steering Committee

I am passionate about people and believe in the oneness

in humanity. I joined the Race, Religion and Cultural

Heritage network because I wanted to make a genuine

difference to our diversity agenda by working alongside

like-minded colleagues. In the modern world in which we

live, we have more diverse families.

I want future generations to have no barriers to entry, and

equality for everyone regardless of race, religion, gender

or sexuality.

I want to make the world a better place for everyone

through both educating and enlightening myself and

others. The collaborative work with my network

colleagues continues to be enjoyable, and something

Ican do to contribute to Whitbread being more diverse

and inclusive in years to come.

OPPORTUNITY

TALVINDER

HEER

Industry-leading training and development

In the UK, we have re-launched our induction programmes this

year, which has enabled our site managers to welcome, induct

and train over 20,000 team members. In total over 930,000

online courses have been completed by our UK operations

teams, enabling them to have the tools to do their job and look

after our guests with competence and confidence. In addition,

274 of our teams have completed their apprenticeships this

year. We are proud to have an apprentice programme available

for every role in Premier Inn and Restaurant operations, and this

year launched our management development apprenticeships.

These 18-month Level 4 qualifications will help support our

teams to progress their management careers with Whitbread.

In a year where we have filled vacancies with great talent

toserve our guests, our teams have also focused on building

talent pipelines for the future through the Government funded

Kickstart scheme. Offering work placements and training to

16-24 year olds, we have offered c.200 Kickstart opportunities

so far, with high levels of retention and engagement from

thoseon programmes. We hope that many will transition to

permanent employment with us at the end of their programme.

Whitbread Annual Report and Accounts 2021/22 42

Force for Good continued

Team member wellbeing is considered in everything we do

Mental, physical and financial wellbeing has been invested in

throughout this year, enabling our teams to be their best, and

our managers to support their teams. Enabling our teams to

navigate a variety of personal and professional challenges,

across the peaks and troughs of the ongoing pandemic has

been absolutely crucial, enabling us to offer our teams

reassurance and support.

In 2021 we have:

› Invested in more mental health first aiders, taking our

totalto54 mental health first aiders and 86 trained

mentalhealth champions

› Listened to our teams about wellbeing and what is

importantto them

› Invested £150,000 in Hardship Grants, delivered through

ourpartnership with Hospitality Action

› Delivered training to our teams and line managers about

positive wellbeing

› Continued with Wellbeing Wednesday communications,

connecting our teams with relevant content every month

Head Housekeeper – Liverpool Airport Premier Inn

andOur Voice representative

I decided to put myself forward as an Our Voice

representative because I have a passion for creating

asafe, happy and efficient working environment for

ourteams. Whitbread is well known for being an

outstanding employer and I think it's really important

that we maintain that reputation and listen to the views

of ourhard-working teams.

Since becoming an Our Voice representative, I have really

enjoyed communicating feedback to our Operations

Director and Managing Director, and building relationships

with multiple leaders in the business. They really show

how passionate our leaders are about the wellbeing of

ourteams at our meetings. They have a real interest in

how we can work in different ways to improve our

business for our teams, and in turn, our guests.

OPPORTUNITY

THOMAS

WIGGANS

We have brought our wellbeing strategy to life in a meaningful

and pragmatic way, supporting our teams in the moment they

need it, across the UK and Germany. Our Wellbeing Hub has

been an essential enabler and has opened up a variety of

choiceand help for our teams to either use for themselves or

for their wider teams or family. We have also promoted the

excellent support our teams can get from Hospitality Action,

our Employee Assistance Programme, including wider exposure

of the Management Hotline to assist line managers. All of this

support has helped us be very clear to our teams, particularly

allour new team members, that team member wellbeing is

considered in everything we do.

Listening groups have enabled us to build a greater

understanding of some of the issues our teams have faced

across the last year. Within Support Centre, a series of

listeninggroups across our central teams enabled us to shape

how we returned to the office once Government restrictions

were eased in the autumn of 2021 and enabled us to develop

our hybrid approach to working, balancing working from home

and within our sites. Across Operations we listened to our

salaried managers to identify the root causes of their workload

pressures and the knock-on impact on their work/life balance,

listening to their recommendations about where we could

remove tasks or make things easier.

Assistant Hotel Manager – Premier Inn

StuttgartFeuerbach

Nicole is one of the founding members of our German

Premier Inn Inclusion Network 'Nationality, Cultural

Origin& Religion', which was set up in 2021, because

ofher personal experience.

In 2012, Nicole and her French-born husband adopted a

baby from Haiti, Skylar. Skylar quickly settled into her new

home and spread a lot of joy with her positive nature. Today,

Skylar is ten years old and goes to high school. She has a big

heart, is sporty, communicative, and socially integrated.

Unfortunately, these qualities have not protected her from

racist hostility throughout her life, from derogatory looks

to exclusion at kindergarten. That is why Nicole joined our

Inclusion Network, where she shares her experiences and

continues to learn from her colleagues.

OPPORTUNITY

NICOLE

BECKER-

MANGOLD

43Whitbread Annual Report and Accounts 2021/22

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The community pillar is all about making a meaningful contribution to the

customers and communities we serve.

COMMUNITY

TARGET PROGRESS AGAINST TARGETS IN 2021/22

We will raise £20m for

Great Ormond Street HospitalChildren’s Charity

£20m

raised over our ten-year partnership

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

Public Health England

20% sugar reduction

This year we have reduced the sugar in our Beefeater

andBrewers Fayre puddings by

6% and 11% respectively

against a baseline of 2015 as part of the Office for Health

Improvement and Disparities sugar reduction programme.

Looking after our guests

We have a long-standing commitment to supporting the

Government in its endeavours to tackle obesity in the UK.

Since2012, we have made a positive contribution by working in

partnership with Government, suppliers and industry partners

on nutrient reduction programmes and regularly develop our

menus. We have been recognised by the Soil Association’s Out

to Lunch survey as well as being invited by Government to be a

founding member of the Out of Home Food and Drink Alliance.

We regularly review children’s dishes to ensure that salt, added

sugar, saturated fat and total fat levels are kept to a minimum

while ensuring that we still maintain taste and appeal to

children. We support the five-a-day message in offering fruit

and vegetables in starters, main courses and desserts.

Brewers Fayre and Beefeater have been externally recognised

by the Soil Association in their Out to Lunch surveys over the

last five years, coming in the top ten of restaurant chains to

offer family-friendly, nutritious and sustainable children’s menus.

Brewers Fayre continues to be a signatory on the Peas Please

Pledge, offering two portions of vegetables with every child’s

main meal. We will be reporting back on our progress to The

Food Foundation in summer 2022.

This year we have reduced the sugar in our Beefeater and

Brewers Fayre puddings by 5.8% and 11% respectively against a

2015 baseline as part of the Office for Health Improvement and

Disparities (OHID) target to reduce sugar by 20%. In 2019 we

had exceeded this target with a 31.2% and 33.9% reduction, but

we changed this to per 100g to align with OHID reporting

requirement. We remain committed to reducing sugar in our

dishes and will work towards targets set by the next stage of

the OHID’s sugar reduction programme.

We want our guests to be able to make informed choices about

the food and drink they order. So, in addition to calorie labelling

being available on our websites and in restaurants, we will

ensure that calorie labelling for all our dishes is available at all

customer points of choice including delivery platforms and apps

in line with Government guidance.

We understand the importance of industry collaboration to

drive forward the health and nutrition agenda and Whitbread

are members of the British Nutrition Foundation, the Institute

of Grocery Distribution as well as their Industry Nutrition

Strategy Group.

This year our Chefs have been working hard to ensure that our

guests always have a range of vegetarian and vegan choices on

our breakfast, lunch and dinner menus. We added over a dozen

new options this year, bringing our total number of vegetarian

and vegan dishes to over 80. We know this is a fast-growing

segment and were pleased to launch our first Meat-Free

campaign in January 2022, for Veganuary, signposting to our

guests our extensive meat-free and plant-based offering across

all our brands and platforms. For some brands and dayparts,

wesaw a 10% increase in meat-free dishes sold in this period.

10% of all our dishes are already meat free across all our restaurant

brands. We will continue to create delicious dishes that meet the

changing needs of the UK population, catering for all dietary and

lifestyle needs and being conscious of religious beliefs.

Whitbread Annual Report and Accounts 2021/22 44

Force for Good continued

Our partnership with Great Ormond Street Hospital

Children’s Charity has been a long-standing and very

successful one. Despite the challenges of COVID-19, this

year we have continued to raise money in many different

ways, for example, through raffles, races, and Santa

sprints. We are thrilled to have reached a total of

£20 million since we started our partnership in 2012.

In July 2021 the doors of the Sight and Sound Centre,

supported by Premier Inn, opened for the first time. This is

the UK’s first dedicated medical facility for children with

sight and hearing loss, and will aid over 8,000 children a

year. The new facility is specially designed for the unique

sensory needs of children with sight and hearing loss and

replaces the outdated facilities in one of the hospital’s

oldest buildings. We set out to raise £10 million for this

centre and have only been able to achieve this target

through the tireless and creative fundraising of team

members and supply chain partners, and the generosity

ofguest contributions.

This year we also piloted an innovative partnership with

DripDrop to provide an automated umbrella rental

service at 30 hotels. Not only does it provide guests

withan escape from the weather but all profits

generated are donated to the Great Ormond Street

Hospital Children’s Charity.

At the end of 2021 we undertook a review of our charity

partnership, reaching out to our teams to ask them who

they wanted to fundraise for. After a thorough pitch

process from a range of charities, we were thrilled that

Great Ormond Street Hospital Children’s Charity came out

top and we have committed to continue our partnership

with them.

COMMUNITY

£20 MILLION

RAISED

Our Partnership with Great Ormond

Street Hospital Children’s Charity

Supporting local communities

We continue to work in, and support, the communities where

we open new sites. This includes donating volunteer hours to

support local charities and community projects with each new

site opening. Due to COVID-19 restrictions, we didn’t engage

fully with community events until the final quarter of this year;

during this quarter we opened five sites and donated 200 hours

to community engagement projects. These included food

collections for local food banks and supporting local gardening

and sustainability groups. We have also started recording the

number of jobs that we create with each new opening and are

proud to report that we have created 784 new jobs directly

through new site openings.

In October 2021 we started working with CHILDREN, a

German charity organisation fighting child poverty in

Germany. CHILDREN supports an operational network of

70sites all over the country. The local sites are partly

financed by local authorities and the contribution

receivedfrom CHILDREN enables the creation of

additional programmes and further support.

The programmes focus on developing new skills and

practical experiences to unlock the potential of the

participating children and teenagers. The organisation

also funds a nutrition programme where children receive

adaily healthy meal at their local site.

Since the partnership began, the teams have raised

€25,000. This has been raised through a combination

ofemployee donations and the Housekeeping Initiative;

ifa guest chooses to forgo their daily visit from

Housekeeping, an automatic donation goes to the charity.

The Housekeeping Initiative is an important programme

for Premier Inn Germany, and we envision an increased

fundraising capability in the upcoming year as the

programme matures.

COMMUNITY

SUPPORTING

OURNEW

CHARITYPARTNER

IN GERMANY

45Whitbread Annual Report and Accounts 2021/22

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Always operating in a way that respects people and the planet.

RESPONSIBILITY

TARGET PROGRESS AGAINST TARGETS IN 2021/22

Whitbread’s critical commodities 100%

accreditedagainstrobuststandards

100%

of whole shell egg and 52.6% of our ingredient

eggshavecage free status

100%

of our whole fish is certified to internationally accredited

sustainability standards, e.g. MSC, BAP and Global GAP

100%

of our beef range in the UK is produced to a recognised farm

assurance scheme in its country of origin such as Red Tractor.

We are now RSPO supply chain certified

100% of our suppliers risk assessed

againstForceforGoodcriteria

100%

of suppliers risk assessed

We will eliminate unnecessary*

single use plastic by 2025

In progress – this has been another challenging year for this

target with the impact of COVID-19 but we will renew our

focus on this in the coming year.

We will cut food waste

by 50% by 2030

32.3%

reduction from our baseline year

We will become Net Zero† for carbon emissions by 2040

50.1%

Scope 1 and 2 intensity reduction from the 2016/17

baseline year

We will minimise water use across our business and

championwater stewardship within high-risk areas

62,000m

of water saved through internal water auditing

andsupplypipe leak detection – the equivalent

of25Olympicswimming pools.

We will not send any

waste to landfill

99.9%

of our operational waste diverted from landfill

* Whitbread defines unnecessary single-use plastic as that which is unnecessary for food safety purposes, which is used instantaneously as aone-off application and whose

removal would not lead to unintended negative environmental consequences, such as increased waste or CO

emissions.

† Scope 1 and 2 emissions.

Whitbread Annual Report and Accounts 2021/22 46

Force for Good continued

Our ambition to reach Net Zero

In the run up to COP26 we signed up to the Race to Zero

pledge and pulled our Net Zero target for Scope 1 and 2

forwardfrom 2050 to 2040, which is aligned to a 1.5 degrees

pathway. We have also committed under the Science Based

Targets initiative (SBTi). We set new targets for our Scope 3

emissions and will be working with our suppliers to reduce

emissions by 50% by 2035 and 64% by 2050. Our focus for

Scope 3 in the coming financial year will be to develop detailed

plans to reduce Scope 3 emissions, review data management

systems and continue ourengagement with suppliers.

This year we reduced our emissions by 50.1% from our 2016/17

baseline year. As per the previous year, this reduction is

impacted by our sites being shut at some points in the year

dueto COVID-19 related restrictions, but we are continuing

toreduce our emissions through energy saving strategies

andemploying new technologies. For example, this year we

worked with Endo Enterprise to add an energy saving additive

to 502 boilers across 400 of our restaurant sites. The additives

increase the surface area of heat transfer, making the system

more efficient; year-on-year savings on some sites have already

shown up to 10% reduction on gas use over winter.

We have also continued the replacement of grills to more

energy efficient versions, this year installing 150 new grills

across 103 sites, bringing the total of new grills to 520 since

westarted this project in 2018. This project has seen an overall

50% gas reduction in our chargrills.

Following the issuance of £550 million in Green Bonds in 2021,

we have been managing and monitoring the use of proceeds

against the projects outlined in our Green Bond Framework.

This includes spend against our sustainable procurement,

such as MSC fish and FSC timber, our green building projects

(all construction done to BREEAM excellent or above) and

our renewable energy costs. Todate we have allocated over

£404 million of the total amount. This spend has been

allocated to projects looking back 36 months as well as

financing projects in 2021/22. The use of these proceeds has

ledto 45 sites being constructed to high environmental

standards, 311,000 Tn Co2 emissions avoided and 100% of

consumables and fish allocated against it were procured to

certified sustainable standard. You can read thefull report

onwww.whitbread.com/governance/reports-policies

RESPONSIBILITY

GREEN

BOND

This year we have reduced food waste by 32% against our

baseline year through continued efficiencies and donating

food that would otherwise go to waste. We do this

through partners such as FareShare who collect our food

and distribute it to local charities. This year we donated

over 622,000 meals to some of the people most in need

as many households continue to be impacted by COVID-19

and the cost-of-living crisis. Food from Whitbread went to

over 2,152 charities from around the country, from Youth

Hubs inScotland to community food kitchens run by

social housing estate residents in Wales. Emma Brown,

Commercial Manager at FareShare, says: "We receive

arange of good quality food from Whitbread,

includingmeat and dairy, which enables the charities

andcommunity groups we work with to provide

nutritiousfood to people most at need."

RESPONSIBILITY

FARESHARE

Managing a sustainable supply chain

In 2020, we became the first UK budget hotel chain to become

members of Better Cotton (formally ‘The Better Cotton Initiative’)

and have spent the last year working with our suppliers to

increase the amount of cotton we source sustainably, for our hotel

linen plus Guest Buys the Bed (Sartex). In collaboration with our

laundry suppliers and Better Cotton we have begun to develop

new ways of working to deliver sustainable cotton for rented

linen, which the hospitality industry relies on. In 2021, with one of

our hotel laundry suppliers alone, we achieved 76% of the cotton

in replenished hotel laundry sourced as more sustainable cotton,

through Better Cotton, an ISEAL accredited standard system. For

our Guest Buys the Bed sales, 15% of the cotton in 2021, was

sourced as more sustainable cotton, through Better Cotton. These

figures relate to the 2021 calendar year.

This year we became RSPO supply chain certified. This means

we now have certified processes and systems to maintain the

chain of custody of certified palm oil in our organisation. We

arethe first hotel brand to have this certification and will now

start working to ensure that 100% of the palm oil that comes

into the business is certified. This is in addition to the fish, eggs,

and beef that we continue to have audited to ensure responsible

practices by our suppliers.

We are determined to eradicate any human rights issues in our

supply chain, and we continue to work with experts in modern

slavery such as Stop The Traffik to help us risk assess suppliers and

provide expertise on industry engagement. We were pleased to

bethe winner in the Best Initiative to Deliver Social Value through

Procurement awards from Chartered Institute of Procurement &

Supply at its Excellence in Procurement Awards. This recognised

aconstruction-sector engagement programme that we ran.

Itaimed to identify root cause issues of modern slavery in the

construction industry in order to create a wider opportunity

tomitigate this risk. You can read our full Modern Slavery Act

Statement at www.whitbread.com/governance/reports-policies.

47Whitbread Annual Report and Accounts 2021/22

Strategic report Governance Financial statements Other information

Preparingour business for climate change

We know that climate change is already happening, and that

businesses must be prepared for the changes this will bring,

from increased precipitation and higher temperatures affecting

UK operations, to energy price rises, potential commodity

shortages and supply chain disruption. Understanding these

risks is key to ensuring that the business remains in a strong

position to navigate this more uncertain future.

Last year we set out our commitment to build on the work

alreadybeing done against the recommendations of the TCFD.

This year we are proud to have published our first full report

underthose recommendations.

The full TCFD report outlines the process we undertook to

identify the principal climate-related issues which have affected

and will potentially affect our businesses, strategy, and financial

planning. This included detailed assessment of activity and

climate-related risk and opportunity in the following areas:

› Products and services

› Supply chain

› Adaptation and mitigation activities

› Operations

› Acquisitions or divestments

› Access to capital

This process identified a number of risks and opportunities that

were categorised by the following three risk types:

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

We then undertook climate scenario analysis aligned to

theNetwork for Greening the Financial System (NGFS),

aconsortium of central banks that have developed climate

scenario analysis tools. We analysed our key risks using three

NGFS reference scenarios, analysing risks across the Orderly

Transition, Disorderly Transition and Hot House World scenarios,

with existing and planned mitigating activity reviewed:

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.

Working with key stakeholders across the organisation, we

identified a number of key risks and opportunities related to

climate change over a short-, medium- and long-term horizon.

These are outlined in the following table. Each risk and

opportunity was assessed and analysed against three climate

scenarios, and existing and planned mitigating activities were

reviewed. Modelling was undertaken, where feasible, with the

aim of understanding the quantification of each of the risks

andour opportunities in our business.

This process demonstrated no material concern in the short

(0-2years) or medium (2-5 years) term. In part, this is due to

the strong mitigating activity already in place to manage our

risks, and the further alleviation provided when the relating

opportunities were taken into consideration.

Our aim is to develop this disclosure year on year as we build

onthe granularity of our data and processes in line with the

TCFD and continue to make sure that we are aware of, and

prepared for, the impacts of climate change.

You can see a list of the key risks and opportunities

onthenextpage and can read the full report at

www.whitbread.com/governance/reports-policies.

Whitbread Annual Report and Accounts 2021/22 48

TASK FORCE ON CLIMATE-RELATED

FINANCIAL DISCLOSURES

RISK DESCRIPTION

Physical risks

Operations: Increase in energy costs. For example, from heating and cooling due to changing and extreme temperatures.

Operations: Risk of increased cost of water/reduced availability due to climate induced water scarcity.

Supply chain: Challenges with sourcing goods and services potentially leading to increase in costs or reduced ability to operate at

high standards. This is particularly true for agricultural items sourced from high-risk areas orif crops/ingredients are particularly

susceptible to temperature variations and extremes. Climate change haspotential to reduce crop yields.

Potential for climate change to negatively affect livestock leading to scarcity or increased prices (due to increased prevalence of

disease due to climate change, and requirements to stop using land for livestock feed leading to increased prices). Similarly higher

welfare standards may lead to increased prices.

Buildings: Risk of increased building/equipment costs due to higher specification requirements. For example, increasedcost/

complexity/timeframes involved in the planning process such as BREEAM requirement forExcellent, zero emissions at point of

use legislation for new space being introduced (for example: no gas, noF-gas), and biodiversity requirements.

Buildings: Physical damage to owned buildings due to increased frequency and intensity of extreme weather (e.g. storms, flooding)

leading to damage to buildings, increased maintenance costs, delays in repairs and in the worst-case scenario leading to inability to

operate business, e.g. closure after a flood, or frozen pipes bursting leading to water supply disruption.

Supply chain: Logistics problems for goods/manufacturing materials in supply chain which are unavailable or delayed as a result of

climate impacts leading to increase in costs or reduced ability to operate at high standards.

Transition risks

Policy: New and emerging climate legislation which increases costs around energy, waste reduction and packaging, including

greater requirement for recycling.

Policy: Risk that hotels are required to invest more in low-carbon technologies. For example, new boilers, targets for efficient buildings,

new cooking systems, remove F-gas when doing a refurbishment, resilience measures etc.

Market: Less consumer business travel due to increased use of videoconferencing and desire by businesses to reduce carbon

emissions associated with travel.

Market: Severe weather impacting guest visits/stays leading to cancellations.

Reputation: Risk brand is not aligned with increased awareness of climate impacts. For example, our Beefeater brand’s core product

is associated with steak, with its high carbon emissions.

Reputation: Risk our brands fail to align with changing trends. For example, vegetarian/vegan food preferences, preference for locally

sourced food, sustainable management.

Connected risk

Market: Recessionary impacts arising from the impact of climate change.

OPPORTUNITY DESCRIPTION

Increase in non-business customers who are choosing to holiday locally, either because of climate concerns or because

ofincreasedcosts associated with overseas travel.

Ability to capitalise on trend towards veganism/vegetarianism by further expanding menu options to cater to this growing

segmentof the market.

Attract more customers who are focused on climate change – align brand proposition to climate friendly offering to

maintainandgrow market share, e.g. ‘net negative carbon rooms’, ‘net negative carbon beds’, eco-friendly hotels etc.

Travelmanagement companies and corporates are increasingly asking about climate change programmes including

tosupporttheir own Scope 3 targets.

Cost reduction by investing in low-carbon technologies and energyefficiency/implementing energy saving measures.

Attract and retain staff by being seen as a sustainability leader.

Opportunity to utilise enhanced position within the market due to quality and sustainability position to mitigate against

higheroperating costs.

Opportunity to use scale to drive suppliers to sustainability at scale.

Addition of Electric Vehicle charging points in car parks to attractmore customers and increase on-site renewable

energygeneration capacity, both of which have potential to generate additional revenue.

Opportunity to source local food and other input materials, which may have a positive marketing benefit and be viewed

favourably by customers.

Our Compliance Statement

Whitbread PLC has complied with therequirements of LR 9.8.6R by including climate-related financial disclosures consistent

with the TCFDrecommendations and recommended disclosures.

Whitbread’s full climate-related financial disclosure is set out in a separate document entitled ‘Task Force on Climate-Related Financial

Disclosures – Whitbread PLC’ which can be found on our website. It has been published as a separate document in order to provide

its own context, impact and reporting specific to the key risks and opportunities that have been identified within it.

A description of the key recommended disclosures, how we have responded to and approached them, and where this can be

found in the report is on page 115.

You can read the full report at on www.whitbread.com/governance/reports-policies.

Whitbread Annual Report and Accounts 2021/22

Strategic report Governance Financial statements Other information

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 Key Performance Indicators (KPI)

pack, the Board considers data relating to customer feedback

and team retention, as well as data on shareholders.

› The Chief Financial Officer’s report gives details on recent

interactions with shareholders, lenders/bondholders and

Pension Trustees discussions, and qualitative feedback on

specific concerns.

› The Chief People Officer's report provides details of all

relevant employee-related matters, including feedback from

the 'Our Voice' forums.

› 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

51 to 54.

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 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 2021/22 50

SECTION 172 STATEMENT

Employees

Our greatest assets are our people. 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

How the Board engaged

› The Board delegates overall reward and remuneration structures to

the Remuneration Committee. The Committee considers the wider

workforce pay alongside executive remuneration. Annual pay rises

for executives are reviewed in the context of the treatment of the

wider workforce.

› The Board receives monthly data in the monthly KPI pack regarding

team retention, and the monthly data is considered carefully.

› The Chief Executive in her report specifically mentions team

retention and reward strategies, and makes proposals for approval.

› Over the year, the Board has approved specific retention packages

for key team members, e.g. kitchen teams and housekeeping teams,

and has approved increases in hourly pay over and above the

National Living Wage for hourly paid team members.

› '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.

› 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 40.

› Diversity and Inclusion is considered as part of all Board

appointments. This is guided by the Board Diversity Policy, which

was introduced in 2021. In addition, Whitbread was recognised with

aGold Award for Excellence in the Stonewall Workplace Equality

Index 2022 and has won the Top Employers Institute Award for

12consecutive years.

› The Board considers succession plans for key team members across

the business.

› 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

› Diversity and Inclusion achievements, see page 40 to 41

› Pay and reward levels above National Living Wage, see page 34

› Board appointments

› Improved health and safety scores. Of the 2,586 COVID-Secure

audits completed there was a failure of just 0.15%.

› Significantly enhanced engagement on the subject of mental

health and staff wellbeing, particularly through the pandemic

51Whitbread Annual Report and Accounts 2021/22

Strategic report Governance Financial statements Other information

STAKEHOLDER ENGAGEMENT

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, as we have recovered from COVID-19,

particularly by reference to the competitor set

› A proactive programme of engagement on key topics

› Leadership and governance

› A leading ESG programme

How the Board engaged

› The Board receives monthly data on changes to the share register

and on the programmes which we have of engagement with

shareholders and other investors

› 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 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 and the Investor Relations team have held

numerous meetings with shareholders, banks, bondholders and the

Pension Trustees throughout the year

› A Triennial Valuation has been completed this year for the pension

fund, and payment schedules into the fund discussed and approved

by the Board

› The Board receives a presentation at least once each 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

Customers

Customers are at the centre of our business and Board decisions

are driven by providing our guests with an exceptional hospitality

experience so they keep coming back.

What matters to customers

› A great choice of hotels to stay in and restaurants to eat in across the

country, wherever our customers choose to be, at competitive prices

› Brilliant service

› Consistently 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, beverage and other products

How the Board engaged

› 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, including as part of the strategy day presentations, deep

dives are provided into pricing and commercial strategies in the UK

and Germany

› The Board approves the refurbishment, and repairs and maintenance

programmes, and has insisted on a programme of investment

through a cycle in which the business has been challenged, to make

sure that the portfolio is in the best condition possible for customers

› The Board considers room innovations periodically, e.g. Premier Plus

rooms, twin rooms

› The Board considers marketing campaigns and digital strategies

› Innovations in menu choices have been presented to the Board and

the Board ensures that healthy and nutritious choices are provided

for all customers

› The Remuneration Committee includes customer measures in the

remuneration structures for key team members

Outcomes of engagement

› Improved customer satisfaction scores

› Market outperformance demonstrates the value of the

brand proposition and its popularity

Whitbread Annual Report and Accounts 2021/22 52

Stakeholder Engagement continued

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

› Support through the pandemic

› 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

How the Board engaged

› 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 of supply, the impact on the business and on other

stakeholders, and cost inflation, and strategies to tackle each

› The Board has received deep dives into certain suppliers,

for example technology partners

› 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

500,000 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

› Training and development for certain suppliers regarding

modern slavery and ethical sourcing

› Payment terms having been maintained and, in some cases,

enhanced through COVID-19

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

› We touch a significant number of communities across the whole

country, and we aim to make a meaningful difference to the

communities where we operate

› The raising of substantial funds for our chosen charities,

national and local

› 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 single-use plastics and reduce food waste

› Tackling modern slavery

› Leadership and governance

How the Board engaged

› The Board has received presentations regarding our sustainability

programme, Force for Good, and has challenged the targets which

were proposed

› The Board receives monthly updates on key developments in the

Force for Good programme

› The Board has received information on the amount of fundraising,

with our chosen charity partner, Great Ormond Street Hospital

Children's Charity

Outcomes of engagement

› Nearly £20m has now been raised for GOSH Charity

› Carbon emissions have reduced by 50.1% since our

base year of 2017

53Whitbread Annual Report and Accounts 2021/22

Strategic report Governance Financial statements Other information

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

How the Board engaged

› 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

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 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

How the Board engaged

› 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.

› The Board receives presentations in relation to pension issues,

including regarding the funding position, triennial valuation and

investment performance.

› During the year, the 31 March 2020 funding valuation was completed

and, as part of the valuation discussion, it was agreed to make

changes to the security package that supports the pension scheme.

This involved the removal of an EBITDA-related covenant and an

increase to the property security that the Trustee holds.

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 2021/22 54

Stakeholder Engagement continued

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 74 and 75

Employees › Gender Pay Gap Report

› Health and Safety Policy – Statement of Intent

› Speaking Out Policy

› Nomination Committee Report on page 85

› Force for Good, pages 36 to 49, and sections

highlighted with Force for Good logos

› Section 172 statement on page 50

› Anti-corruption and anti-bribery on page 74

Corporate Social Responsibility Sustainability reporting

› 2020/21 Environmental, Social & Governance Report

› TCFD reporting

› SASB reporting

› CDP reporting

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 2020

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

› 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

Human rights › Human Rights Policy

› Disability Awareness

› Equal Opportunities

› Human Trafficking Positioning Statement

› Modern Slavery Statement 2019/2020

› Whitbread PLC Board Diversity Policy 2022

› Force for Good, pages 36 to 49, and sections

highlighted with Force for Good logos

Privacy › Customer Privacy Policy

› Data Protection Policy

› Employee Privacy Policy

› Corporate governance, page 74

Social matters › Gender Pay Gap Report

› Responsible Sourcing Policy

› Diversity and Inclusion statement

› Force for Good, pages 36 to 49, and sections

highlighted with Force for Good logos

› Diversity and Inclusion targets and commitments,

pages 40 and 41

Description of principal risks and impact of business activity › Principal risks and uncertainties, pages 56 to 60

Description of the business model › Our business model, pages 22 and 23

Non-financial performance indicators › Our strategy at a glance, pages 24 and 25

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 pages 40 and 41.

55Whitbread Annual Report and Accounts 2021/22

Strategic report Governance Financial statements Other information

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

NON-FINANCIAL INFORMATION

STATEMENT

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

creates a risk-based work plan aligned to the principal risk

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 and

measures whilst assessing our 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 its appetite for risk,

which is then embedded within our ways of working, meaning

that risk appetite is considered both in the management of

existing risks and 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, but at this present time are

not clearly or fully understood in terms of their nature or value.

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 monitored within the

functional areas and also reviewed regularly by the Executive

Committee and managed through the risk management

framework as appropriate.

With the world now largely adjusted to the disruption caused

by the pandemic, the extent to which existing global and

economic climate risks have been exacerbated by the fractured

international response to the pandemic is becoming clear. As

our business returns to normal operating capacity, there is

opportunity for previously unforeseen risks to emerge, meaning

that it is too early to move away from the heightened risk state

adopted during the pandemic.

One such emerging risk is continued geopolitical conflicts, in

particular the ongoing Russian invasion of Ukraine. These

conflicts have the potential to both create new previously

unforeseen risks, and affect existing risk in areas which could

have a significant impact on Whitbread, for example the

downturn of global economies, widening of sanctions, movement

of key resources, consumer sentiment and willingness to travel.

Identifying and quantifying the impact ofrisks associated with

such conflicts is difficult, given their continually evolving nature.

PRINCIPAL

RISKS AND

UNCERTAINTIES

Understanding and responding to risk

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 an annual review of the risks

relevant to the achievement of their strategic goals, while

managing 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.

Whitbread Annual Report and Accounts 2021/22 56

However, as a business we have been, and will continue to,

carefully monitor all associated developments.

As an organisation, we are facing increased regulatory and

compliance requirements across areas such as corporate

governance and controls; external disclosure; and sustainability

which may have a substantial impact on anything property

related or time bound pressures to meet targets. As new

government bodies or pressure groups are formed, the pace

orquantum of change is uncertain.

International sourcing and supply chains globally are under

stress, as they adapt to demand levels and resourcing issues,

with further disruption to UK markets caused by trade

regulations. As pressure on supply chains persists, we are

reviewing our continuity plans especially around critical

suppliers, whilst ensuring consideration of new and

changingrisk against our ethical and sustainability targets,

andcontrol frameworks.

Talent retention and labour supply are a key risk for Whitbread.

Whilst we are effectively managing the immediate need to staff

the business, the labour market is rapidly changing. Younger

generations are driving change in the workforce with new

requirements and expectations from careers and their wider

network. This presents an exciting challenge and opportunity

for Whitbread, where we champion the importance of a diverse

and inclusive culture. As expectations change, there is the

potential to affect risks associated with attracting and retaining

both top talent and customers. As a business, being able to

identify these shifts early is imperative to our success.

COVID-19

COVID-19 has continued to cause significant disruption to

operations and trading activities throughout the financial year

as both the UK and our overseas operations moved in and out

of restrictions. Whilst the virus is now more endemic in nature,

the unpredictability of new variants and the associated public

reaction to each new variant mean the industry continues to

be impacted.

We have harnessed the lessons learned in the past two years as

we continue to navigate and evaluate the ongoing impact of

COVID-19. Through remaining alert and responsive to the

pandemic situation, both in the UK and overseas, we are

working to identify and mitigate associated risks, such as the

structural shifts detailed in the principal risks table overleaf, at

the earliest opportunity. It is this ability that allows us to remain

a resilient business best placed to achieve our strategic goals.

Current COVID-19 associated risks and mitigations are included

within the principal risks table on pages 58 to 60.

RISK MANAGEMENT REPORTING AND ESCALATION

GOVERNANCE, STRATEGY, OVERSIGHT AND COMMUNICATIONS

AUDIT COMMITTEE

OVERSIGHT AND CHALLENGE OF THE

EFFECTIVENESS OF RISK MANAGEMENT

AND MITIGATING CONTROLS

EXECUTIVE COMMITTEE

REVIEW, CHALLENGE AND APPROVAL

OF GROUP RISKS

INTERNAL AUDIT

COORDINATION AND ANALYSIS

Read more on pages 68 and 69

Risk management framework

57Whitbread Annual Report and Accounts 2021/22

Strategic report Governance Financial statements Other information

Strategic

priorities Risk

Movement

vsprior year

Risk

appetite Key mitigations

Pandemic

It is still uncertain how future variants and

outbreaks, vaccine efficacy and resulting

restrictions will continue to impact the

hospitality sector, resulting in a longer-term

decline in returns and cash flow, along with

increasing tax burden following the end of

Government support packages. The extended

crisis mode puts additional pressure on

organisational resilience, increasing health and

safety risks to customers and employees whilst

applying significant stress and fatigue to the

leadershipteam.

N/A

› Safeguarding the wellbeing of our guests and team members is

our priority, with regular monitoring to ensure compliance with

updates to Government guidelines and flexibility of hybrid

working where possible.

› We continue to perform extensive scenario modelling to assess

the impact of the pandemic on our financial facilities, borrowing

costs and balance sheet. This, coupled with our agile forward

thinking, allows us to make informed decisions which maintain

headroom whilst optimising commercial opportunities.

› Rigorous capital and cost controls are in place across the

business to ensure we can react to the level of demand in

themarket.

Uncertain economic recovery

Uncertainty remains for UK and Germany

economic recovery, with the threat of a

recession, whilst also recognising the impact

from wider macroeconomic trends and current

geopolitical conflicts. This is resulting in

changeable demand, public and consumer

confidence; structural and significant inflation

impacting our cost base across wages, utilities,

food costs and construction materials with

further potential increases in services; leading

to an 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.

Increased due

to economic

uncertainty

and disruption

caused by

COVID-19 and

the current

geopolitical

climate

N/A

› We have implemented a measured UK expansion plan until the

economic environment is more certain. This is supplemented with

rigorous business planning processes considering many scenarios

and appropriate responses.

› We have updated our international sourcing strategy to include

more focus on our local supplier base and warehousing in

Germany to minimise supply chain disruption.

› We continue to make good progress with our efficiency

programme and maintain rigorous discipline over our capital and

cost spend, partly offsetting inflationary and demand led

pressures.

› Our established control framework allows for close monitoring of

discretionary spend, capital, and M&A spend.

› 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.

› Our People strategy is reviewed regularly to address labour issues

and ensure disruption to operations is minimised.

Cyber and data security

Cyber and data security remains a key risk as

technology and third-party cloud-based

services continue to be subject to the threat of

cyber-attacks. A data breach or attack resulting

in operational disruption could reduce the

effectiveness of our systems. This in turn could

result in loss of income, loss of financial,

customer or employee data, fines and/or

reputational damage.

Increased

dueto the

heightened

external

threats

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.

› Several transformation programmes in place reviewing and

updating key systems to ensure these are providing the best

possible support for our operations.

› 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.

Strategic priorities

Innovate and grow in our core UK businesses Lower

Focus on our strengths to grow internationally Higher

Enhance our capability to support long-term growth Level

Whitbread Annual Report and Accounts 2021/22 58

PRINCIPAL RISKS

Strategic

priorities Risk

Movement

vsprior year

Risk

appetite Key mitigations

Structural shifts

It is still unclear whether the changes in working

practices, utilising online meeting technology

and the resulting reduction in business and

international travel is a permanent or long-term

structural shift. In addition, the threat from

disruptors could result in a reduction in

customer demand and Premier Inn brand

strength. The combined impact of these factors

presents a risk to market share, returns, cash

flow, and property asset valuations, particularly

of sites located in metropolitan areas.

N/A

› We perform extensive top-line 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.

› To help offset potential structural shifts, we have a robust

commercial and customer plan targeting new customers and

distribution partners and 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.

Ourcustomer and trading committees track customer feedback,

satisfaction and brank index allowing a focused approach

toimprovement.

› We are also taking a measured approach to further expansion,

beyond our existing pipeline, until the environment is more certain,

with our focus shifting to lower-risk market share tradinginitiatives.

Germany growth

The risk that international expansion in

Germany is impacted by the uncertain German

economic climate or failure to achieve a flexible

operating model, impacting our ability to build

the Premier Inn brand, deliver market growth

assumptions and level of return in a timeframe

that satisfies stakeholder expectations whilst

recognising the significant amount of capital

now invested. There is some counterbalance

identified within the risk created by increased

opportunity to acquire sites due to

competitorweakness.

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 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 whilst complying

with local country requirements.

› A monthly executive meeting reviews the German business in detail,

including financial performance, customer feedback, marketing,

operations, people, capital and property plans.

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 the high volume of

change. This particularly refers to the

replacement of the legacy CRM system in the

next two years, our IT network 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,

complexities

and high

volume of

changes for

this year

High

› To help ensure the successful delivery of change projects, wehave

enhanced our internal project delivery expertise andcapability and

put in place a standard assurance management framework.

› Regular reporting to the Executive Committee and Board is

provided as partof the framework, ensuring an appropriate level of

governance is maintained and dependencies are aligned.

› We have made significant progress towards delivering our key

strategic programmes successfully, including both the replacement

of our legacy CRM system and replacement of our IT network. In

addition, we have managed agile and efficient implementation of all

the operational changes required during the pandemic.

Leadership, succession,

andtalentretention

The macro labour market's structural changes

could potentially impact the hospitality sector

more adversely as currently it is not considered

an attractive employer. This is compounded by

immigration regulations for specific roles such

as chefs and housekeeping, along with the

transferability of functional expertise, especially

in the Technology, Finance 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.

Increased due

to tightening

labour market

and potential

difficulties in

attracting

talent into

hospitality

incurrent

climate

Medium

› The success of our businesses would not be possible without

thepassion and commitment of our teams. Team engagement

isfundamental. We monitor this closely through our annual

engagement survey and invest in ongoing development,

wellbeing and engagement and programmes such as

LeadingtheWhitbread Way.

› 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.

› The Nomination Committee reviews long-term succession plans

forthe Executive Committee and their direct reports, in both the

UKand Germany, recognising the importance of both emergency

and longer-term succession plans for the successful continuity of

the business.

› Pay reviews across operations ensure that our employee offering

remains current, with the latest pay review resulting in wage

increases for our hourly paid employees.

› We are working to recruit new resource directly, scaling up employer

brand proof points, leveraging social media where appropriate, and

ensuring we access all Government schemes tobridge displaced or

disadvantaged opportunities within ouroperations.

› We champion inclusivity across the organisation and are looking

to improve diversity. We have eight commitments designed to

drive greater diversity through our recruitment and talent

management, and to promote an even more inclusive

environment through continuing education and sponsorship

ofrelevant networks and forums.

59Whitbread Annual Report and Accounts 2021/22

Strategic report Governance Financial statements Other information

Strategic

priorities Risk

Movement

vsprior year

Risk

appetite Key mitigations

Third-party arrangements and supply

chain rigour

Whitbread has several key supplier relationships

that help ensure the efficient delivery of our

multi-site and Support Centre operations,

including cloud systems, 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. The risk of

supplier failure is increased in specific markets

due to the consolidated nature reducing options

and contingency in place.

Increased due

to external

economic and

geopolitical

factors

including

Brexit and

COVID-19

Medium

› We continually review our suppliers and business continuity

arrangements with focus on continuity plans in place for

criticalsuppliers.

› 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.

› Monitoring is performed through our supplier management

arrangements, including regular reviews against predetermined

key performance indicators, ensuring our supplier base

remainsoptimal.

› Our international sourcing strategy focuses on local suppliers to

minimise potential delays and administrative burden resultant

from trade regulations, whilst our warehouse in Germany gives us

the option to route products used for construction and operation

of hotels directly into the German market rather than via the UK.

Health and safety

The risk of death or serious injury as a result

ofCompany negligence or a significant failure

resulting from food, fire, terrorism or another

significant safety failure. This could be due

toafailure in safety standards, supply chain

provenance, responsible sourcing or 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 specialist, undertakes

unannounced health and safety audits on sites, covering food,

fire,and general health and safety requirements.

› We have robust fire safety policies, procedures and training for

our team members. We 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.

› Independent audits over key suppliers in our chain are performed

to ensure supplier practices conform with all relevant health and

safety requirements.

› We invest in ongoing site level training to help identify hostile

reconnaissance activities or potential terrorism, 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.

Environmental, Social and

Governance

Uncertainty as to how these collective risks,

including climate change, willevolve and the

expectations of our widestakeholder group

todeliver on our commitments and embed

within the business model wholly, could

impactour reputation andperformance.

New risk 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.

Whitbread Annual Report and Accounts 2021/22 60

Principal Risks continued

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- and four-year timeline, with the Board

acknowledging that, despite the improved performance of the

business following the easing of restrictions in the year, in the

current environment, the certainty of those plans, the potential

fluctuations in the global economy, the impact on competitor

and customer behaviour in a post COVID-19 world is far from

certain. Multiple scenarios were modelled through the process

and were reviewed by the Board.

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 58 and 60 of the Annual Report. This

included a review of the potential impact of climate change and

climate change regulation across the viability statement period.

For the purposes of the viability assessment, the directors

considered a severe but plausible scenario in which the UK

continues to be impacted by COVID-19 restrictions during

2022/23. In this scenario, the Group has sufficient liquidity to

operate within its existing facilities.

Should the impacts of the pandemic on trading conditions

result in a severe but plausible case scenario, this viability

statement would be dependent on the Group’s ability to access

additional liquidity. Detailed consideration was given to the

financing actions that could be taken, noting the positive

outcome of those actions taken during the current year and the

potential to raise finance through the Group’s freehold

properties. 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 Market Review and Our 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 61 was approved by

theBoard and signed on its behalf by Chris Vaughan,

General Counsel on 27 April 2022.

61Whitbread Annual Report and Accounts 2021/22

Strategic report Governance Financial statements Other information

VIABILITY STATEMENT

CORPORATE

GOVERNANCE

AT A GLANCE

This year we are fully compliant

withthe requirements of the 2018

UK Corporate Governance Code

(the ‘Code’), except for Provision 38.

Further details onthis can be found

on page 64.

Highlights 2021/22

› Ensured the Company’s governance processes continued

tooperate successfully through the management of the

COVID-19 pandemic and the recovery of the business as

therestrictions throughout the UK and Germany eased.

› The management of staff shortages, supply chain issues

andcost inflation.

› Organising the induction of our two new non-executive

directors, Kal Atwal and Fumbi Chima, to the business.

Readmore on pages 73 and 74

› Enabled shareholders to interact effectively attheCompany’s

hybrid AGM, held during theCOVID-19pandemic.

› Appointed Hemant Patel as Chief Financial Officer and as an

executive director. Read more on page 86

› Cementing our commitment to a diverse Board with the

approval of our Board Diversity Policy. Read more onpage 84

› Conducted a comprehensive externally facilitated Board

evaluation. Read more on pages 72 and 73

› Carried out a consultation with shareholders on a revised

remuneration policy. Read more on page 100.

Priorities 2022/23

› Continued effective corporate governance while recovering

from the impact of the COVID-19 pandemic.

› Oversight of the plan to replace the Company’s reservation

and customer management systems.

› Support and oversight of the growth of the business inboth

the UK and Germany.

› Conduct a thorough review of Whitbread’s Speaking

Outprocess.

› Review and act on the recommendations from the externally

facilitated Board evaluation. Read more onpages72 to 73

› Achieving full compliance with the 2018 UK Corporate

GovernanceCode by the end of the financial year.

Board attendance

The Board generally holds regular scheduled meetings during

the year and on an ad hoc basis as and when required. During

the year, 11 Board meetings were held. The attendance at

meetings by the directors is set out below.

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

Nicholas Cadbury

100

Fumbi Chima

100

Adam Crozier

100

Frank Fiskers

100

Richard Gillingwater

100

Chris Kennedy

100

Louise Smalley

83.33

1 The one meeting Louise was unable to attend during her time as a Board member

was due to a conflict with a previously arranged meeting.

Whitbread Annual Report and Accounts 2021/22 62

Board focus areas

The charts below demonstrate the proportion of the Board's

time spent in each area.

2021

20202021

2020

2021/22 2020/21

Performance and operations 39% 29%

Financial performance 18% 23%

Corporate governance 13% 6%

Strategy and acquisitions 13% 13%

People 12% 15%

Risk 5% 13%

Gender diversity

The chart below shows the

gender split of the Board.

Ethnic diversity

The chart below shows the

ethnic diversity of the Board.

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 gender diversity

Men

7 70%

Women

3 30%

Board ethnic diversity

White

7 70%

Asian

2 20%

Black

1 10%

Kal Atwal

1.1

Horst Baier

2.5

Consumer/

retail

Digital

Corporate

transformation

International

Travel and

hospitality

Financial

People

Commercial

property

Corporate social

responsibility

Board tenure

The length of time each of the directors has served on

theBoard, at the date of this report is shown below.

Alison

Brittain

6.7

Fumbi Chima

1.1

Richard

Gillingwater

3.1

Adam

Crozier

4.3

Chris

Kennedy

6.2

Frank Fiskers

3.3

Hemant Patel

0.1

5.4

David Atkins

63Whitbread Annual Report and Accounts 2021/22

Financial statements Other informationStrategic report Governance

A STRONG

GOVERNANCE

STRUCTURE

I am pleased to present the

Board’sreport on the Company’s

compliance with the UK Corporate

Governance Code. This year has

been another challenging and

busy year for Whitbread as we

reopened our business following

the relaxation of COVID-19

related restrictions in the UK and

Germany, whilst navigating global

supply chain issues, costinflation

and tighter labour supply in the

hospitality sector. The Board

remainscommitted to, and

focusedon, a strong corporate

governance framework.

Adam Crozier

Chairman

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 creation

andmaintenance of a strong governance structure in order

tosupport the long-term success of the business and also 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stakeholders.

With the exception of one provision, which is explained in more

detail below, I am pleased to report that we have complied with

the Code throughout the 2021/22 financial year. In the pages

that follow, we have set out how we have complied with the

principles set out in the Code.

The one provision that we cannot report full compliance with

this year is the provision requiring that pension contribution

rates for executive directors should be aligned with those

available to the workforce. As explained in last year’s report,

and again in the directors’ remuneration report this year, weare

taking steps to achieve compliance. The current remuneration

policy, approved in December 2019, committed toa phased

reduction of the pension contribution of current executive

directors by 10%pts from 25% to 15% over a period ofthree

years. The provision for new executive directors wasreduced

to10%, which aligns with the workforce, and the position has

been addressed as part of the recent remuneration policy

review. The new remuneration policy, which will be put to

shareholders at the AGM in June, will achieve the required full

alignment. Further information on our executive pensions can

be found in the remuneration report on page 106.

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.

We believe that our culture is special. Whitbread is a people

business, and a significant amount of our attention, including

that of the Board, is dedicated to making sure we have all the

people in place to delver great service to our customers.

Whitbread Annual Report and Accounts 2021/22 64

Chairman’s Introduction to Corporate Governance

The Board usually assesses and monitors the Company’s culture

by making regular visits to Whitbread’s hotels and restaurants

and taking the opportunity to meet and speak to team

members. Unfortunately, opportunities for this have been

limited this year, due to the pandemic, but we were able to

organise one of the Board meetings at our hotel at Heathrow

Airport and in the last few weeks a number of my colleagues

onthe Board were able to visit some of our hotels in Germany.

The Board very much looks forward to spending more time in

the business in the year ahead. One of our scheduled Board

meetings is due to take place in Germany, and further visits

have been organised for our non-executive directors to sites

inthe UK and Germany.

The Board receives regular reports at each meeting from the

executive team, including the Chief Executive and the Chief

People Officer, both of whom are members of the Executive

Committee. The Chief People Officer provides input on

employee issues, employee satisfaction surveys, which include

questions on culture and reports from the Employee Forum.

Culture is also discussed as part of the strategy discussions

andat the Nomination Committee, for example through

recruitment decisions to senior positions, including for the

newChief Financial Officer. The Board has re-committed to

thepurpose as being fit for the current environment. Regular

reports are produced for the Board by functions across the

Group to enable the Board to satisfy itself that the purpose

isbeing met.

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

ofskills and competencies to assess the skills, experience and

knowledge required at the Board table.

In August 2021, Louise Smalley retired from Whitbread and

stepped down from the Board after completing nine years as an

executive director. Hemant Patel was appointed as Whitbread’s

Chief Financial Officer effective from 21 March 2022 and has

replaced Nicholas Cadbury on the Board and the Executive

Committee. Hemant has been with us since 2018. Before joining

Whitbread, Hemant was Finance Director of Greene King Pub

Company andheld numerous senior finance and commercial

roles at Asdaand Mars. He is a Chartered Management

Accountant andis also anon-executive director and Chair of

the Audit & Risk Committee of the Department for Digital,

Culture, Media andSport.

On 1 March 2021 we were pleased to welcome Fumbi Chima

andKal Atwal as new independent non-executive directors,

fulfilling the need recognised in last year’s Board evaluation

fortechnology and digital experience. Fumbi is skilled in

digitaltransformation strategy in high-growth environments,

with a great understanding of overall strategic planning and

technology. Kal has a substantial amount of digital and

marketing experience; she played a central part in driving

strategic growth and scaling the business in previous

roles.Fumbi and Kal bring an invaluable mix of skills and

willprovide a breadth of knowledge to the Board. Both Kal

andFumbi received a tailored induction programme when

joining the Company.

Diversity and inclusion

We are proud of our approach to diversity and inclusion at

Board level, demonstrated through our new Board Diversity

Policy, and three members of the Board identify as Black, Asian

or Mixed Ethnicity. We are aware of the gender mix on the

Board, following Louise Smalley’s departure, with three out of

ten members being female at the current time. We have plans

to increase this in the upcoming year, ensuring we align to the

recommendations in the FTSE Women Leaders Review

(formerly Hampton-Alexander).

Board evaluation

It was highlighted in last year's Board evaluation that directors

wanted to focus on succession planning and diversifying Board

experience. As mentioned above, there was excellent progress

in this area this year with the appointment of two new non-

executive directors to the Board in March 2021 and an internal

promotion to Chief Financial Officer role in March 2022. After

anexceptional year, the Board has come back to considering

succession planning as a priority.

The Board and its main committees participated in an external

evaluation during the current year. The results of the review,

carried out by Ffion Hague, were positive overall and the

external evaluators remarked that the Board is considered to

bean organised, professional and high functioning board. The

evaluators carried out detailed meetings with various members

of the Board and selected external stakeholders and advisors.

As part of the review, they also attended meetings of the Board

and its committees to form an independent opinion of the

Board's performance. A draft of the report was discussed with

me and with the Board at our meeting in April 2022.

Further information on the Board evaluation and areas for focus

in the year ahead can be found on pages 72 and 73.

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 considered many other

stakeholders as well. For example, we have considered on

anumber of occasions the relationships with third-party

technology suppliers, as well as suppliers of energy, food and

beverage, and other 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 51 to 54.

Adam Crozier

Chairman

27 April 2022

65Whitbread Annual Report and Accounts 2021/22

Financial statements Other informationStrategic report Governance

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their 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 10 and 11

Strategic report 1 to 61

Board engagement with key stakeholders 51 to 54

Shareholder engagement 52

Audit Committee report 80 to 83

Conflicts of interest 74

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

65 and 85

Board composition 68 to 69

Diversity, tenure and experience 63

Board, Committee and director

performanceevaluation

72 to 73

Nomination Committee report 84 to 86

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 80 to 83

Strategic report 1 to 61

Fair, balanced and understandable

AnnualReport

Going concern basis of accounting 81 and 117

Viability statement 61

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 87 to 111

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 68 and 69

Key roles and responsibilities 67

Information and training 73 to 74

Whitbread Annual Report and Accounts 2021/22 66

THE UK CORPORATE

GOVERNANCECODE2018

Corporate Governance

AUDIT

COMMITTEE

EXECUTIVE

COMMITTEE

NOMINATION

COMMITTEE

REMUNERATION

COMMITTEE

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.

THE

BOARD

on pages

80 to 83

Read more on page 70

on pages

84 to 86

on pages

87 to 111

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 is also the Company Secretary. The

duties performed in the Company Secretary element of his 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

67Whitbread Annual Report and Accounts 2021/22

Financial statements Other informationStrategic report Governance

BOARD RESPONSIBILITIES

Key

Audit Committee

Nomination Committee

Remuneration Committee

Committee chair

Committee member

Adam Crozier

CHAIRMAN

Date of appointment to the Board: April 2017

Date of appointment as Chairman: March 2018

Age: 58

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)

Alison Brittain

CHIEF EXECUTIVE

Date of appointment to the Board: September 2015

Age: 57

Experience:

Prior to joining Whitbread, Alison was Group Director

of Lloyds Banking Group’s Retail Division, having

previously been executive director for Retail

Distribution and Board Director at Santander UK PLC.

She has held senior roles at Barclays Bank, was a

Member of the Prime Minister’s Advisory Group and a

non-executive director of Marks & Spencer Plc.

Alison was named ‘Business Woman of the Year 2017’

in the Veuve Clicquot awards and awarded a CBE in

the 2019 New Year’s honours list.

External appointments:

› Prince’s Trust Council (Deputy Chair)

› Experian PLC (non-executive director)

› British Airways PLC* (non-executive director)

* A wholly owned subsidiary of International Airlines

Group (IAG) SA

Richard Gillingwater

SENIOR INDEPENDENT DIRECTOR

Date of appointment to the Board: June 2018

Age: 65

Experience:

Richard is Chairman of Janus Henderson Group plc,

served as a non-executive director of Helical PLC and

was former Pro-Chancellor of the Open University.

Richard also served as Chairman on 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:

› Janus Henderson plc (Chairman)

› Spirax-Sarco Engineering plc

(independentnon-executive director and

seniorindependentdirector)

› Wellcome Trust (Chair of the Investment Committee)

Hemant Patel

CHIEF FINANCIAL OFFICER

Date of appointment to the Board: March 2022

Age: 52

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)

Whitbread Annual Report and Accounts 2021/22 68

Corporate Governance continued

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 63.

BOARD OF DIRECTORS

Fumbi Chima

INDEPENDENT NON-EXECUTIVE DIRECTOR

Date of appointment to the Board: March 2021

Age: 47

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)

Frank Fiskers

INDEPENDENT NON-EXECUTIVE DIRECTOR

Date of appointment to the Board: February 2019

Age: 60

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)

Chris Kennedy

INDEPENDENT NON-EXECUTIVE DIRECTOR

Date of appointment to the Board: March 2016

Age: 58

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)

Horst Baier

INDEPENDENT NON-EXECUTIVE DIRECTOR

Date of appointment to the Board: November 2019

Age: 65

Experience:

He 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)

› Hotel San Francisco S.A. (Consultant)

› Riu Family (Consultant)

Kal Atwal

INDEPENDENT NON-EXECUTIVE DIRECTOR

Date of appointment to the Board: March 2021

Age: 50

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)

› SimplyCook Ltd (Board Adviser)

David Atkins

INDEPENDENT NON-EXECUTIVE DIRECTOR

Date of appointment to the Board: January 2017

Age: 56

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)

69Whitbread Annual Report and Accounts 2021/22

Financial statements Other informationStrategic report Governance

The Executive Committee meets on a fortnightly basis

andischaired by Alison Brittain

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.

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, both for 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 Alison Brittain and Hemant Patel

canbefound on page68.

Alison Brittain

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

Whitbread Annual Report and Accounts 2021/22 70

Corporate Governance continued

EXECUTIVE COMMITTEE

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 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 as part of the General Counsel’s

report before each meeting.

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 after each Board meeting.

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.

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

› Approval of year-end documentation

› Risk management and insurance

› Succession planning

› Premier Inn performance

› Group valuation and defence considerations

› Replacement of the Group’s reservation

andcustomer management system

› Pensions update

› Premier Inn & Restaurants opening plan

› Property portfolio valuation and update

› Commercial and operational update

› ESG update

› Group strategy

› Commercial and operational update

› 2021/22 interim results

› Investor relations/shareholder update

› Premier Inn & Restaurants opening

› Capital structure and financing

› German acquisition

› Update on the replacement of the Group’s

reservation and customer management system

› Pensions triennial review

› Operational update

› Governance update

› Budget review

› People strategy/talent succession

› Update on the replacementofthe Group’s

reservation andcustomer management system

› Revolving credit facility update

BOARD AGENDA 2021/22

71Whitbread Annual Report and Accounts 2021/22

Financial statements Other informationStrategic report Governance

BOARD ACTIVITIES DURING THE YEAR

Board performance evaluation

An evaluation of the Board, its committees, individual

directorsand the Chairman is carried out each year.

Aninternally facilitated Board evaluation has been carried

outfor thelasttwo years, so this year we have undertaken

anexternally facilitated evaluation.

2021/22 externally facilitated review

An evaluation of the effectiveness of the Board, its committees,

individual directors, and the Chairman, is carriedout each year.

This year, an external evaluation hasbeen carried out, because

it was three years since the last externally facilitated process.

The evaluation has been conducted by Ffion Hague, on behalf

of Independent Board Evaluation. It is confirmed that neither

Ffion Hague, nor Independent Board Evaluation, have any other

connection tothe Company.

2021/22 evaluation

Overall, the feedback given to the evaluation team was very

positive. Despite two years of significant disruption to the

business as a result of the COVID-19 pandemic, the Board

feels that it has worked very well and considers itself to

bean organised, professional and high functioning Board.

This view was consistent with the feedback from outside

theBoard and there were relatively few areas of potential

improvement identified.

Methodology

A comprehensive brief was given to the assessment team

bythe Chairman, Chief Executive and the General Counsel.

Detailed meetings were conducted with each director, all

members of the Executive Committee, and certain key

external stakeholders, such as the auditor and remuneration

adviser. The lead evaluator attended meetings of the Board,

the Audit Committee, the Remuneration Committee and the

Nomination Committee. A report was then compiled, which

included an overall summary of findings, recommendations

for improvement, and included guidance in relation to best

practice UK Corporate Governance Code compliance.

Draft conclusions were discussed with the Chairman,

andsubsequently at the Board meeting on 20 April 2022.

Feedback has also been provided direct to each committee

chair and the report on the Chairman’s performance has

been discussed with the Senior Independent Director. In

addition, the Chairman has received a report with feedback

on the performance of individual directors.

Overall Summary and Recommendations

The following aspects of Board performance were rated

particularly strongly by Board members:

› Strategy: the strategy is well laid out, and the strategy

debates are thorough and comprehensive, and each

Boardmember was able to contribute their views;

› Culture: Board culture is very positive. Relationships

aregood, open and transparent, but with appropriate

constructive challenge;

› Board composition and new Board members: the Board

has the appropriate levels of skills and competencies,

andnew Board members are selected in a thoughtful

anddemocratic way, and once appointed, a thorough

induction is undertaken;

› Governance: the Board approaches governance in a serious

and diligent way, and Board processes are good;

› Board support and resources: the support provided

isgood and the Board is kept updated with the latest

developments in corporate governance.

In terms of the areas needing attention, the following were

highlighted by Board members:

Board and committee review cycle

Year 1

(Financial year 2019/20)

Internal review

Year 2

(Financial year 2020/21)

Internal review

Year 3

(Financial year 2021/22)

Externally facilitated review

2020/21 internal evaluation

The internal evaluation last year highlighted the following areas:

Areas identified for

improvement 2020/21 Progress made in 2021/22

Board agendas – consider

reducing the number of

itemsto allow for detailed

discussions on all topics

There has been some progress

on this but, in a busy year,

there is still more work to do

and it will continue to be a

focus this year.

Succession planning and Board

experience – review succession

plans for Chief Executive,

executive directors and wider

leadership team, and consider

non-executive directors with

specific food and beverage

andtechnology experience in

the future

There has been positive

progress with two new

non-executive directors

joining the Board in March

2021 and an internal

promotion to fill the position

of Chief Financial Officer.

A check-in on the current

strategy and how it might

needto be evolved to address

apost-COVID world

This was covered as part of

the strategy day in November.

Link between technology and

strategy – improve the Board’s

knowledge on technology and

the associated risks, and more

alignment of technology with

the Company’s strategy

There has been some

progresswith the Board

attending various training

sessions to improve their

knowledge on technology

andassociated risks.

Remuneration – greater

monitoring of performance

against targets through the

year and consider further ways

to engage with the workforce

on remuneration matters

The COVID-19 pandemic has

caused this to be a challenge

this year and made some

of the targets redundant.

The Board will continue to

monitor this going forward.

Training and development

post-COVID

Details of training can be

found on page 73 and 74.

Whitbread Annual Report and Accounts 2021/22 72

BOARD EVALUATION

Corporate Governance continued

› Succession planning: given the length of tenure of senior

management, succession and talent management is a

priority for the year;

› For obvious reasons, the Board has lacked quality time

inthe business, and physical time together, where further

discussions can take place in a more informal setting;

› Papers and presentations: there is scope for more succinct

papers and presentations, and identification of key points

and Board “asks”;

› Performance evaluation: more feedback would be

appreciated on the performance of individual directors.

The report contained a benchmark review of the Board

against peer groups which identified a need to improve

thegender balance of the non-executive director group as

soon as practicable. The evaluation team also highlighted

theneed to review the employee engagement mechanism of

the Board and to agree specific actions to link non-executive

Board members more closely with the business and senior

managers over the coming year.

The following recommendations for action were accepted by

theBoard during its discussion on the evaluation:

› Culture: plan more meetings out in the business and schedule

more private sessions of the Chairman and non-executive

directors alone at, or around, scheduled Board meetings;

› Governance: it was agreed to consider setting some clear

Board objectives to reflect priorities; to consider a further

senior female non-executive director appointment; and to

consider repeating the induction programme after three

years on the Board;

› 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;

› Employee engagement: agreed to review how the Board

interacts with the wider workforce.

Audit Committee

The feedback suggests that the Committee is very well

chaired, provides a strong, constructive and knowledgeable

challenge, and contains the right level of expertise. It was

recognised that a priority over the coming year is to provide

support for the new Chief Financial Officer and it was agreed

to consider the quality of the papers.

Remuneration Committee

The Committee is considered to be effectively and efficiently

chaired, and well supported by the internal team and by the

external advisers. Committee members are acutely aware of

shareholder views, and of the adverse vote at the AGM on

the remuneration report, and are keen to continue to seek

the right balance between reward and incentives over the

coming year.

Nomination Committee

It has been a busy period for the Nomination Committee,

with the appointment of two non-executive directors and a

new Chief Financial Officer in recent months. The succession

process for the new Chief Financial Officer was thought to

have been very well handled. There is more work to do in

terms of succession planning and the Committee is fully

aware of its responsibilities with respect to diversity and

inclusion and is determined to address them.

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 generating claims over and above those

covered by insurance. These are reviewed periodically.

Board and committees

It is believed that 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. Louise Smalley retired from the Board on 31 August 2021

after joining Whitbread in 1995. Fumbi Chima and Kal Atwal

were appointed to the Board on 1 March 2021 as independent

non-executive directors. Hemant Patel was appointed to the

Board and Executive Committee with effect from 21 March 2022

as Chief Financial Officer. Nicholas Cadbury stepped down from

the Board on 20 March 2022.

Commitment

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 non-executive directorship

in a FTSE 100 company.

During the year, Alison Brittain advised the Board that shehad

been invited to join the advisory board at British Airways. The

Board noted that the position was not on theboard of a listed

company. It also noted that the time commitment required was

expected to be low, and that the position was not one for which

any remuneration would be received. Alison also advised the

Board of her intention to step down from the board of the

Prince’s Trust during the course of 2022. The Board carefully

considered the time commitment involved, together with

Alison’s other commitments, and then confirmed that it was

acceptable forAlison to accept the position at British Airways.

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:

› GAAP developments;

› Audit Committee obligations;

› TCFD and climate disclosure; and

› Diversity and Inclusion.

The Board also attended externally facilitated training

coveringtopics including:

› Ransomware and cyber resiliency;

› Risk management;

› Developing a Paris-aligned investment strategy;

› Education session on global supply chain challenges; and

› Audit and corporate governance.

73Whitb read Annual Report and Accounts 2021/22

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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.

Fumbi Chima and Kal Atwal joined the Board as non-executive

directors in March 2021. 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.

Once the COVID-19 related Government imposed restrictions

were eased, Fumbi and Kal visited Whitbread sites in London

and inBirmingham with Simon Ewins, Managing Director, UK

Hotels& Restaurants. Hemant Patel joined the Board as Chief

Financial Officer on 21 March 2022. As part of his induction,

hehas 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.

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 2021.

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. Further information on shareholder

engagement can be found on pages 51 to 54.

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.

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 113.

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 81.

Going concern

The directors’ going concern statement can be found in the

directors’ report on page 117.

Whitbread Annual Report and Accounts 2021/22 74

Corporate Governance continued

Viability statement

The viability statement can be found on page 61.

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 22 to 29.

Board committees

The Board is supported by three committees; the Audit

Committee, the Nomination Committee and the Remuneration

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 87 to 111. Reports

from the Audit and Nomination Committees can be found on

pages 80 to 86.

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 2021/22 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 56 to 61.

Risk analysis

› 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.

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. for our reservations

system replacement, strategic network replacement and

people programmes.

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CULTURE AT

WHITBREAD

At Whitbread, our culture has been shaped

over our 280-year history. It has evolved

through external and internal influences

andhas stood the test of time. Our values

ofgenuine, confident and committed are

embedded in everything we do: the decisions

we make, the targets we set and how we

balance our actions to achieve our strategy.

Being in the hospitality industry, our 35,700 team members are

the face of Whitbread. They bring our hotels and restaurants

tolife, supported every day by their colleagues in the Support

Centre. Whitbread recognises that, while culture can be set at

the top, it is our front line team members who truly create and

keep our special culture alive. This belief has helped us to be

named as a Top Employer 12 consecutive years.

We believe that our culture is special, and it is woven into

ourvalues, purpose and mission, and in the way we make

decisions. We demonstrate our culture in everything we do

andevery decision we make. We are a hospitality company,

focused on delivering great service and experiences for all of

our customers, and our customer heartbeat model, supported

by our values, is closely aligned to our purpose.

Our culture is very much about hospitality, based around

cooperation and collaboration, rooted in driving excellent

performance, serving and delighting our guests. By constantly

innovating and connecting genuinely with our customers,

weaspire to grow our brands and stay ahead – ultimately,

ourgoal is to be the world’s best budget hotel company.

It’sourWinning Teams that make everyday experiences

specialforour customers, so they keep coming back –

andwekeep progressing.

As we progress, we aim tobeaForce for Good. Being diverse

and inclusive is an important part of this. We want every team

member to bring their very best selves to work, and our

communities – ‘GLOW’, our LGBTQ+ network; ‘Race, Religion

andCultural Heritage network’; and our disability inclusion

network, ‘enAble’ – have been championing our purposeof no

barriers to entry and no limits toambition. Each of these groups

is sponsored by a memberof the Executive Committee.

The pandemic meant that organisations had to adapt to the

changing environment aroundthem while being true to their

values. Italso meant that maintaining our special culture has

been more difficult, with large numbers of team members on

furlough and/orworking from home. We believe that we

achieved the rightbalance at Whitbread. It also brought about

long-termchangesin the way companies operate. Recently we

have thought carefully about the need toretain our culture while

adapting to new conditions andhaveintroduced a new hybrid

working model for ourSupport Centre teams with this in mind.

Whitbread Annual Report and Accounts 2021/22 76

Corporate Governance continued

The UK Corporate Governance Code 2018 emphasises

theimportance of culture in ensuring the success of an

organisation. One of the principles of the Code is that the

board should establish the company’s purpose, values and

strategy, andsatisfy itself that these and its culture are

aligned. All directors must act with integrity, lead by

exampleand promote the desired culture.

INITIATIVE ACTION TAKEN

Engaging with our sites

As soon as business reopened and restrictions eased, a Board

meeting was arranged on site for the Board to be visible in the

business and experience our special culture. Individual Board

members have stayed in our hotels and visited our restaurants

on a planned and unplanned basis in order to share the guest

experience and understand the culture across the business.

Board Diversity Policy

The Board believes that diversity in all forms is critical to the

effectiveness of the Board and Whitbread’s continued success,

which is why we have made a commitment to put diversity at

the core of our business agenda with an aim to become the

most inclusive hospitality business.

This Board Diversity Policy is applicable to the PLC Board only,

but sits alongside the Whitbread Code of Conduct, and Diversity

and Inclusion Policy, which set out Whitbread’s broader

commitment to diversity and inclusion.

Attendance at ‘Leading in an Inclusive World’

training

In May, all members of the Board attended a two-hour upskilling

session focusing on diversity and inclusion, including their role in

our Diversity and Inclusion commitments.

This session was delivered by our partners INvolve, topics

included bias, privilege and allyship, and at the end all Board

members committed to a personal action.

Team retention

The Board carefully considered the levels of team retention and

pay. To make sure that Whitbread is an attractive place to come

and work, and to stay, our team members were offered a number

of retention packages and enhanced hourly pay to retain the

special nature of our service oriented hospitality culture.

Listening updates

The Board has received presentations on our pulse surveys

throughout the year, and feedback from Our Voice representatives,

including through the monthly report by the Chief People Officer.

Our Talent strategy, and succession and retention issues have all

been carefully considered by the Board.

Chief Financial Officer

An internal hire

We believe in 'no barriers to entry, no limits to ambition' and are

proud that our new CFO has been internally promoted. This

demonstrates how we can support all our people to develop their

careers at Whitbread, at all levels of our business.

German Sharesave scheme

The Whitbread Sharesave scheme has been available for all

UK-based employees for many years. The Board wanted to

ensure that German colleagues also had the opportunity to share

in the growth of the business alongside their UK counterparts and

also drive employee commitment and ambition. Sharesave was

successfully launched in Germany in November 2021.

The Code further provides that the board should assess and

monitor culture. Where it is not satisfied that policy, practices

orbehaviour throughout the business are aligned with the

company’s purpose, values and strategy, it should seek

assurance that management has taken corrective action.

TheBoard has monitored the Company’s culture in a number

ofways, some of which are set out below:

77Whitbread Annual Report and Accounts 2021/22

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How was your induction to Whitbread?

Due to the circumstances of the COVID-19 pandemic,

Ihadahybrid induction experience with Whitbread,

whichexpanded over my first year on the Board.

I would describe the induction as very thorough. It was quite

intense, but also tailored to my own interests, for example

the digital agenda. Initially, the majority of my induction

consisted of meeting my fellow Board members, members

of the Executive Committee and external advisors. It was

impossible to visit our hotels and restaurants at the time due

to lockdown restrictions. However the virtual nature of these

meetings allowed me to cover a lot of ground, something

Idon’t think would have been possible in ’normal‘ times.

Once restrictions eased and the business reopened, I had

the opportunity to visit the hotels and restaurants. I visited

several Premier Inn hotels, hub by Premier Inn and a Bar +

Block all in the London area. Later in the year, I visited a

variety of Premier Inns in the Birmingham area. The site

visits provided an overview of the development of the

hotelsand restaurants and what is required in certain

areas.Ialso really valued being involved in structuring

theinduction – as a result, separate training sessions

werearranged and I spent more time on understanding

thecommercial, marketing, pricing, digital and technology

areas of the business.

How have you found your first year

as a non-executive director at Whitbread?

It’s been quite a rollercoaster. Since joining Whitbread in

March 2021, I’ve seen the business closed due to COVID-19

restrictions and then re-opened. There was a lot of

operational stress on the business, from regional lockdown

differences, to staff shortages, to supply chain issues and

latterly cost inflation. Seeing the business in action at a time

of operational hardship has greatly aided my understanding

of the hospitality sector.

Throughout the year, I have been impressed by the level

ofoperational detail that the business puts into providing

itsfirst-class consumer proposition. The hospitality sector

isa dynamic and fast-changing business, and it is a very

customer-focused business – I’ve been impressed with

howmuch time the Board spends talking about customers.

The other group which receives a lot of attention is our

people – as a hospitality business, our people are critical

toour success, and the Board spends a lot of time talking

through people issues.

Overall, my first year at Whitbread has exceeded my

expectations. I’m glad to be a part of a business that

focusesso heavily on the customer and its people.

Q&A WITH

NON-EXECUTIVE

DIRECTOR,

KALATWAL

Whitbread Annual Report and Accounts 2021/22 78

Corporate Governance continued

Whitbread Annual Report and Accounts 2021/22

What do you think are the key challenges

inthe current governance climate?

It is always a challenge to keep up to speed with the ever

changing world of corporate governance. I think the Board

strikes the right balance between the need to discuss

governance matters, while focusing on performance,

strategy, operations, and people, but we always ensure

thatwe take the time to keep up to date with corporate

governance developments.

There have also been significant changes relating to ESG

reporting requirements in recent years, and in this annual

report you will find a summary of our first TCFD report on

page 48 to 49.

How important is Diversity and Inclusion

tothebusiness?

Whitbread has a good reputation for its Diversity and

Inclusion (D&I) programmes, particularly from a gender

perspective. The importance of D&I is well embedded in

thebusiness, and this is demonstrated through already

having achieved the target of having 40% female

representation in the leadership population by 2023 and

being on track to deliver the commitment of 8% ethnic

diversity in the leadership population by 2023.

Nevertheless, there is always more to do and improve upon.

A particular focus for me, is to understand how we develop

the talent pipeline from within, beyond senior leadership

roles. I am passionate about understanding the progression

of the teams in our hotels and restaurants and how we can

develop their career paths.

In Alison Brittain you have a Chief Executive who genuinely

cares, supported by an executive team that is equally as

committed on the subject. This sets the tone for the rest of

the business. There is a genuine appetite and desire to drive

Whitbread’s D&I commitments throughout the business. I’ll

continue to provide challenge around the Board table, as a

diverse board aids in effective decision making, but I am

happy with the steps Whitbread is taking to become more

diverse and inclusive.

How would you describe the

Whitbreadculture?

The culture throughout Whitbread is customer-led and

people-focused, with an emphasis on being transparent and

collaborative. While being hardworking and straightforward,

it’s also a fun working environment. I would describe it

ascollaborative in nature, with very strong levels of

transparency throughout the business. It’s a nice place

towork, and the people I’ve met have been very friendly.

Around the Board table, it’s the same: it is collaborative,

there is good constructive challenge, and there is no fear

ofchallenge. And it’s fun. I’ve really enjoyed the meetings.

We all recognise we are on the same team but acknowledge

the different approaches everyone has to offer.

What was one of the highlights for you during

your year atWhitbread?

A standout of the year for me was developing a good

understanding of the business, visiting many different hotels

and restaurants throughout the UK. It provided an insight

into how the business operates on the ground and I was

grateful to meet and chat with the teams. It gave me a real

understanding of the difficult challenges they’ve faced

throughout the year and how they remain motivated and

enthusiastic. I learnt about the support Whitbread provides

in having a career in hospitality and how a team member

progresses in the industry. Moreover, I learnt about how we

support their personal development. This was evidenced

when a team member told me that Whitbread had helped

her to achieve her goal of learning to drive.

I also loved seeing the different types of hotels in the

portfolio: from smaller hotels on the outskirts of towns

andcities, which had a family feel and where teams spoke

ofhaving a regular customer base, to larger inner-city

hotelswhich cater to bigger groups and business guests.

Aparticular personal highlight was the fish and chips

Ihadat one of the Table Table restaurants I visited!

On the business side, I’ve enjoyed getting to grips with

thesignificant technology and digital agenda of the Group.

There is much to do here, but I have been impressed by

thelevels of innovation throughout the business.

What are your key focuses for the year ahead?

I’m looking forward to visiting Germany. We have planned

trips in April and September to visit the Premier Inn

hotelsinseveral different areas. I’m excited about better

understanding the German side of the business and

meetingthe team members who operate these hotels.

More generally, I want to get out to more sites now that

wewill be entering into a year without disruptions. We will

be focusing on recovering from the COVID-19 pandemic and

aiming to continue the outperformance versus the market

during this phase.

Lastly, a key focus is to assist in strengthening and

challenging the technology, digital and data agendas

andthe ongoing technology transformation, while also

supporting the growth drivers in the UK and overseas.

79Whitbread Annual Report and Accounts 2021/22

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Chris Kennedy

Chair, Audit Committee

Membership of the Audit Committee

andmeetingattendance

Name of director

Meetings attended

and eligible

toattend

Chris Kennedy (Chair) 4/4

David Atkins 4/4

Horst Baier 4/4

Fumbi Chima 4/4

Frank Fiskers 4/4

The Committee met four times in 2021/22.

Meetings were attended by all 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.

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 annual compliance with the Code,

thisbeing the third year, an external evaluation was undertaken

by Ffion Hague, of the skills and experience of the Committee.

The report stated that the Committee is very well chaired,

provides a strong, constructive and knowledgeable challenge,

and contains the right level of expertise. It was recognised that

a priority was to provide support for the new Chief Financial

Officer and it was agreed that the quality of the papers would

be given consideration. Through the external appointments that

David Atkins, Frank Fiskers, Fumbi Chima and Horst Baier have

held, they bring a depth of financial and commercial experience

that add to the strengths of the Committee.

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;

› 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

Director of Financial Reporting & Control, theHead of Internal

Audit and 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.

Significant matters in the financial statements

The key areas of judgement and estimates considered by the

Committee, in relation to the 2021/22 accounts and disclosed

inNote 2 to the consolidated financial statements on pages 149

and 150, 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.

Whitbread Annual Report and Accounts 2021/22 80

Audit Committee Report

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 2020/21

to 2021/22 was assessed. The Committee discussed a change

inmethodology used to estimate the discount rate used in

calculating the value of the scheme liabilities, concluding

thatthe adoption of a single-AA rated methodology

wasappropriate.

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 year-end which

resulted in the recognition of a net impairment reversal of

£42.0m (impairment charge £10.5m and impairment reversal

£52.5m) across UK and Ireland and no impairment or reversals

being recognised in Germany. The reversal was driven by the

recovery of trading performance across the UK estate due to

the easing of COVID-19 restrictions in FY22 and reductions in

the discount rate.

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 impairments identified and that the related disclosures

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, 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; and

› 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 beyond.

The assessment of the Group to continue as a going concern is

supported by the following:

› Cash and cash equivalents of £1.1bn at the balance sheet date.

› Whitbread met all financial covenants during the period of

assessment under both the base case and severe but

plausible scenarios.

› £1.0bn of sterling bonds maturing outside of the going

concern period, between October 2025 and May 2031,

withno covenants

› All US private placement loan notes having been repaid, with

the final 2022 tranche being repaid in full during the period,

removing the associated covenants.

› Formal agreement having been reached with Pension

Trustees to remove the financial covenant test from the

deedof covenant.

The Committee has reviewed the Group’s severe but plausible

scenario and is satisfied that this is appropriate in supporting

the Group as a going concern.

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 climate change legislation on

theGroup’s operations. The Committee has concluded that

these assumptions are appropriate.

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:

› Deferred tax on freehold and leasehold estate – Due to the

complex nature of the tax environment associated with the

Group’s properties, management presented a review to the

Committee with a focus on the controls over the processes for

determining the valuation of deferred tax assets and liabilities.

This included a review of the enhanced controls over key

processes and assumptions which had been implemented

during the year as well as plans to embed further controls

within the wider tax processes during the coming year.

› Repairs and maintenance expenditure – The Committee

received a briefing from management on improvements

madeto controls over repairs and maintenance expenditure.

› Control environment in Germany – As a result of the focus on

growth and relative immaturity of the Group’s operations in

Germany, the Committee reviewed the effectiveness of the

controls in this area. The review allowed the Committee to

gain a deeper understanding of the controls and process

enhancements undertaken in 2021/22.

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

58 to 60.

81Whitbread Annual Report and Accounts 2021/22

Financial statements Other informationStrategic report Governance

Internal audit

The Internal Audit function provides independent assurance

through reviewing the risk management processes and internal

controls established by management.

The Audit Committee monitors and reviews the scope,

extentand effectiveness of Whitbread’s internal audit

function.Regular presentations and updates are given

totheCommittee by the Head of Internal Audit and

complemented by private discussions as and when necessary.

The Committee has approved the Group internal audit terms

ofreference, whichsets out the role, accountability, authority,

independence, and objectivity of the function. The Committee

considers matters raised through audit reports and the

adequacy of management’s response to them, including the

time taken to resolve any such matters. The main focus areas

for internal audit during the year included processes supporting

Whitbread’s health and safety operations, payroll activities and

integration programme in Germany. In the UK, operational and

commercial reviews were performed, including repairs and

maintenance, payroll, and compliance with the requirements

ofthe Coronavirus Job Retention Scheme. The IT Internal

Auditteam focused on information security and compliance,

with reviews performed over the Security Operations Centre

and GDPR practices, as well as providing significant systems

andchange programme assurance, including the replacement

ofWhitbread's CRM system over the next few years.

The scope of activity of internal audit is monitored and

reviewed at each Audit Committee meeting. An annual

planwasagreed by the Committee in March 2022 which

coversthe activities to June 2023. The internal audit plan is

determined based on the Audit Universe which sets out all

auditable areas of the business and assigns each area a risk

level and recommended audit frequency. The internal audit

planis aligned to the Group’s principal risks which are formally

reviewed and agreed by the Executive Committee and Board

ona biannual basis against a standard set of risk assessment

criteria. The plan also 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.

Areas highlighted for audit on the current plan include a

greaterfocus on operational risks in Germany, including

repairsand maintenance, procurement, and refunds. In the UK,

audits are centred on optimising processes where associated

risk has increased in the year, including labour planning, target

operating model, and supply chain logistics. The IT Internal

Audit team provides assurance over Whitbread’s information

systems, with the plan focused on the robustness of core IT

operational areas including change management, asset

management, and incident and problem management at

atimewhen significant change is expected to go live.

Theteamwill continue to provide assurance to de-risk

Whitbread’songoing major change projects, including the

replacement of the CRM system, the replacement of the

network across all our sites and our People programme.

Internal audit ways of working have continued to adapt to

changing requirements for remote and hybrid working. The

overall approach remains the same and the underlying audit

methodology and processes are unchanged, with audits fully

compliant with best practice and internal audit standards.

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 2021 annual general meeting. The current

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 2021. Overall,

it was noted that despite the challenges of remote working,

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 this financial year, the

Committee will be assessing the work of the year-end audit,

once finalised, and an effectiveness review for this financial

yearwill be undertaken 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 2025.

The Committee reviewed a letter received from the FRC on

itsreview of the Group’s 2020/21 Annual Report and Accounts.

The FRC’s review was based solely on the contents of the

Annual Report and Accounts. The FRC had no questions or

queries that they wished to raise with the Group.

Auditor independence

To safeguard the objectivity and independence of the external

auditor, the Committee’s terms of reference set out the policy

is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 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.

Whitbread Annual Report and Accounts 2021/22 82

Audit Committee Report continued

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.

Main activities during the year

In 2021/22, 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 2021

› Review of year-end Financial Statements template,

financial reporting outlook, and tax

› External auditor – approval of remuneration, terms of

engagement and other fees, controls update and

FRCaudit qualityreview

› Internal audit – approval of plan

› Risk and controls – review of risk management process,

approval of policy, update on financial control framework

and litigation review

› Review of the year’s Speaking Out reports

› Review of Committee’s rolling agenda

› Audit Committee evaluation report

› Audit Committee terms of reference

April 2021

› 2020/21 Annual Report and Accounts

› 2020/21 Deloitte external audit report

› Non-audit services and fees

› Internal audit – review of 2020/21 report and terms

ofreference

› Risk and controls – review of statements on risk

management and tax controls

› Compliance report

› Review of management papers in relation to going concern

and viability, job retention scheme, assessment of whether

the annual report is fair balanced and understandable

› Meeting with auditors without executive team present

andnon-executive directors only meeting

July 2021

› Risk and controls – cyber security benchmarking update

and German hedging

› Compliance – Audit Committee effectiveness review, GDPR

review, treasury policy approval, external audit year-end

feedback andassessment

› Internal audit – progress update, Group's reservation and

customer management system assurance plan, andRepairs

and Maintenance update

October 2021

› Review of FY22 Interim Results – including management

papers in relation to judgements and estimates,

impairment and going concern

› External audit – half-year report, letter of representation,

UK Corporate Governance Code update, and approval of

terms ofengagement

› Risk and controls – litigation review, compliance report,

and controls update (Q2 Financial Control Framework,

Fraud; IT General Controls)

› Internal audit – interim update, including retail audit, and

external quality assessment with PwC in attendance

› Non-audit fees

Activities post financial year

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 agendas and terms of reference

› Assurance update and Group's reservation and customer

management system update

April 2022

› 2021/2022 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

Total non-audit fees amounted to £0.1m consisting of the

interim review. 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

27 April 2022

83Whitbread Annual Report and Accounts 2021/22

Financial statements Other informationStrategic report Governance

Adam Crozier

Chair, Nomination Committee

Membership of the Nomination Committee

andmeetingattendance

Name of director

Meetings attended

and eligible

toattend

Adam Crozier (Chair) 4/4

David Atkins 4/4

Kal Atwal 4/4

Horst Baier 4/4

Fumbi Chima 4/4

Frank Fiskers 4/4

Richard Gillingwater 4/4

Chris Kennedy 4/4

This year, we are pleased to

welcome Hemant Patel to the

Board as Chief Financial Officer.

In addition to this, we approved

a new Board Diversity Policy in

January 2022, which cements our

commitment to a diverse Board.

Role of the Committee

The role of the Nomination Committee is to review the Board

composition and to plan for its refreshment as applicable.

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), and make recommendations to the Board;

› to consider succession planning for the Board 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.

Board Diversity Policy

Our new Board Diversity Policy was published in 2021.

Insummary, it recognises the significance of Board diversity,

including gender and ethnicity, and sets out our commitments.

These include:

› At least 33% female representation on the Board; and

› Representation from ethnic minorities on the Board.

The policy also sets out plans for the monitoring and reporting

of our work to meet these commitments and recognises that

there may be points in time when we temporarily fall short of

the targets set.

The full policy can be found on our website at

www.whitbread.co.uk/governance/reports-policies/

Whitbread Annual Report and Accounts 2021/22 84 84

Nomination Committee Report

Corporate Governance continued

Female representation

We have strong female representation at Whitbread. 65% of our

total workforce is female, along with 41% of our leaders. We are

proud to be one of only eight FTSE 100 companies to be led

bya female Chief Executive. Whitbread was recognised in the

FTSE Women Leaders Review 2022, in the top ten for our

female leadership representation.

In addition, we monitor and publish our Gender Pay Gap report

every year. There are still areas we can improve – you can read

our latest Gender Pay Gap report, which includes our action

plan, on our website www.whitbread.co.uk/governance/

reports-policies.

Ethnic representation

Across the organisation, 13% of our teams identify as Black,

Asian, or Mixed Ethnic, 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 5% of our leaders

are Black, Asian or Mixed Ethnic. In addition, we are proud to

have been recognised as one of 42 companies that exceeded

the ‘1 by 21’ target in the Parker Review Report 2022.

In the last 12 months, we have also internally published our first

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 page 41.

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 skills

and competencies the Committee believes will be required in

the future. 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.

Last year, we committed to our focus on expanding the Board’s

experience into consumer marketing and technology with the

appointment of Fumbi Chima and Kal Atwal in March 2021. They

have provided the Board with immense value and a vital mix of

skills, especially in the technology sector, digital transformation,

marketing and general management.

This year, our attention moved to appointing our new Chief

Financial Officer following the resignation of Nicholas Cadbury.

Further information on the Committee’s process of appointing

our new executive director, Hemant Patel, can be found on the

next page.

As part of our annual talent cycle, we review the long-term

succession plan for our Executive Committee and its direct

reports as standard. 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.

Main activities during the year

In 2021/22, the Nomination Committee's main activities

included the following:

› Reviewing Whitbread's internal talent succession and the

talent market for executive director roles.

› Refreshing market mapping for talent

› Board and Executive Committee succession planning

› The appointment of Hemant Patel as Chief Financial

Officer, including agreeing his induction into his new role

› Deep dive talent review into Whitbread's critical capabilities,

› Review of retention of talent by function and level for

boththe UK and Germany

Our approach to the annual re-election of directors

As required by the Code, all directors will be subject to

re-election at the next 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

27 April 2022

Whitbread Annual Report and Accounts 2021/22

Financial statements Other informationStrategic report Governance

Executive director succession

Taking account of the Committee's active year, we have outlined

below the process for recruiting, appointing, and inducting our

new Chief Financial Officer, Hemant Patel.

STAGE 1

STAGE 2 STAGE 3

› Resignation of Group Finance

Director, Nicholas Cadbury.

› The Committee worked together

to design and agree the role

specification for the Chief

Financial Officer. This included

considering the skills and

experience required and

ensuring candidates fit with our

culture at Whitbread.

› Along with the role

specification, a timetable was

created to ensure a smooth

transition for the business as

awhole as well as the Board

and executive team. These were

passed over to our appointed

executive search agency,

Spencer Stuart.

› Following a review of the

specification and an update

tothe market mapping for

therole, Spencer Stuart

presented alist of external

andinternal candidates.

› The Committee identified

ashortlist of candidates.

› A separate committee was

created, consisting of non-

executive directors and

executive directors to

interviewthe candidates

inatwo-stage process.

› The candidates were assessed

against the role specification

and pre-determined criteria

ofknowledge and skills.

STAGE 4STAGE 5

› The results of the interview

process were reviewed by

theCommittee.

› The successful candidate, Hemant

Patel, was then recommended for

appointment to the Board as

Chief Financial Officer.

› The Board approved the

appointment.

› The final stage of the process

wasfor the Committee to

ensure a robust induction and

development plan was put in

place to ensure and boost

Hemant's success in his new

role. Details of this induction

canbe found to the left.

As a result of Hemant being

internally promoted to the role,

the induction process was

tailored to build upon his

knowledge and understanding

of the business, Whitbread's

strategic priorities and the role

ofthe Board. Listed below is

some of the activities included

in his induction:

› Introduction to the Board

andnon-executive directors.

› Meeting the external auditor,

Deloitte, PwC as remuneration

consultants and investment

advisors

› Shadowing Nicholas Cadbury,

former Group Finance Director

› Sessions to meet and

understand the work of

theteams within the

Financedepartment.

INDUCTION

Whitbread Annual Report and Accounts 2021/22 86

Nomination Committee Report continued

Corporate Governance continued

Frank Fiskers

Chair, Remuneration Committee

Whitbread has delivered an excellent performance in the context

of this challenging backdrop. We set targets at the start of the

year to significantly outperform our competitors, and this has

been achieved. We have also returned to profitability in the latter

part of the year, which is ahead of where we thought we might

be. This really is a testament to the fantastic job that people right

across the organisation have done, led by our high-performing

management team.

In the light of such an excellent performance by the team, it is

not surprising that the targets we set at the beginning of the

year have been significantly exceeded. As a result, payouts

under the Annual Incentive Scheme for the 2021/22 financial

year on a formulaic basis are at the top end of the range.

TheRemuneration Committee has given careful thought as

towhether payouts at this level are appropriate or whether

thisformulaic outcome should be adjusted. In making this

assessment, the Committee considered the experience over

theyear for a range of stakeholders (see page 90 for further

details). Whilst the experience for stakeholders has been

good,for the first three months of the year, the Company

tookadvantage of the Government’s Job Retention Scheme.

Asaresult, we concluded that, despite the overall excellent

performance, it was appropriate to reduce the opportunity,

andtherefore the payouts, by 25% under the Annual Incentive

Scheme. More details are provided on page 88 under 2021/22

annual incentives.

Updated remuneration policy

The current remuneration policy was approved by shareholders

at a general meeting in December 2019 and, as such, we will

beseeking shareholder approval for a new updated policy at

theAGM in June this year. At the end of 2021, I conducted an

extensive consultation exercise with major shareholders, to seek

views on the current structure of our remuneration schemes.

After a detailed review, carefully taking into account the views

ofshareholders in the consultation process, the Remuneration

Committee continues to believe that the overall structure of our

remuneration schemes is appropriate for Whitbread at this time,

and is the best way of aligning the interests of management with

shareholders and other stakeholders. As a result, the proposed

policy is largely unchanged from the one approved in 2019. We

do, however, intend to reduce the executive directors’ pension

contribution to 10% of salary with effect from 31 December 2022

so as to align to the wider workforce. We also plan to introduce

greater flexibility in the selection of financial metrics included in

the Annual Incentive Scheme, to ensure that we can set the most

appropriate and relevant targets each year.

After listening to feedback from shareholders on our proposals,

we have made two changes to the Annual Incentive Scheme:

firstly, we will ensure that at least 60% of future years' incentives

will be based on financial metrics (original proposal was 50%);

and secondly, we intend that profit will be the predominant

financial metric. I would like to thank shareholders for engaging

with us as we developed the revised policy and I would ask for

your support for the resolution approving the policy at the

AGMin June.

We entered the 2021/22 financial year with

optimism for a brighter future, with the UK

Government’s roadmap for the reopening of

society in place and hope that we would be

able to operate close to normality for much

of the year. The situation was similar in

Germany. There have clearly been some

hurdles to overcome, most notably the

emergence of the new Omicron variant just

before Christmas. On the whole, operating

conditions, whilst remaining challenging,

were much improved on the year before.

Financial statements Other informationStrategic report Governance

Whitbread Annual Report and Accounts 2021/22 87

Remuneration Committee

Report

Remuneration Report

2020/21 annual incentives

As I explained in my report last year, although it had been clear

from early in the 2020/21 year that the profit element could not

be achieved, performance against the other elements was strong.

Whilst we were confident that the 2020/21 incentive outcome

fairly reflected the year’s strong performance, we agreed to make

no payment at that time, but rather to carry over the incentive

earned subject to an underpin. This approach allowed us to

conserve cash, while providing a direct incentive for the recovery

of the business from the pandemic and a retention mechanic at

atime when the executives had very little retention coming from

long-term incentive plans. It was, therefore, aligned with the

interests of shareholders.

The underpin on this deferred element required satisfactory

performance to be delivered on at least 50% of each executive's

strategic objectives set for the 2021/22 financial year.

As explained above, Whitbread has performed exceptionally

wellin challenging external circumstances this year and this is

reflected in the outcomes of the executives’ strategic objectives.

The outcomes for Alison Brittain and Louise Smalley are 84.0%

and 84.6% respectively and are clearly itemised on pages 104

and 105. These outcomes are well above the 50% threshold and

the Committee has confirmed that the criteria set for the release

of the 2020/21 carried-over incentive have been met in full.

As the underpin has been met, the incentive would ordinarily be

payable based on the structure and conditions we set in 2021

andexplained to shareholders at that time. However, whilst the

Committee believes management has performed exceptionally

well during the last two years and all performance requirements

have been fully delivered, Alison Brittain, Louise Smalley and the

Committee have jointly come to the decision that Alison and

Louise will not receive these incentive payments. Instead, an

equivalent amount is to be used to form a welfare fund for

Whitbread employees.

Although no payment will be made, the Committee remains

ofthe view that the approach taken last year served a useful

purpose in creating an appropriate structure at a time of

significant uncertainty in the business and the wider economy,

and balanced this against investors' guidance at the time.

Nicholas Cadbury is not entitled to receive any carried-over

payment, having left the Company before the award would

havebeen made.

2021/22 annual incentives

The incentive for 2021/22 was based on a combination of profit,

efficiency savings and strategic objectives. As I explained in

myletter last year, the Committee took a different approach

tosetting the profit target given the significant restrictions in

thehospitality sector and the uncertain outlook at the time the

targets were set. In particular, we decided to focus the executives

on delivering strong profit conversion and strong sales growth

relative to the market.

When calculating the outcome of the profit conversion element,

the Committee reviewed the need for potential adjustments.

Thetargets were set based on an assumed level of Government

support and, during the course of the year, additional Government

support, i.e. support which was not included in the original targets,

was utilised. Therefore, to ensure we were making a like-for-like

assessment of performance vs targets set at the start of the year,

the target was increased by £80m, which was the amount of

additional Government support received. This ensures that

executives’ incentive outcomes do not benefit from any

unanticipated support received.

Full details of the outcome against all performance measures

isincluded on page 91.

The Committee recognises the exceptional performance shown

by the executive directors in leading Whitbread through a very

challenging year while positioning the Company to capture

future growth. The Committee is comfortable that the formulaic

outcome, after discounting the additional Government support,

of 95.2% for the Chief Executive, fully reflects management's

strong performance against targets for the year.

Whilst the wider stakeholder experience, which is shown in the

table on page 90, has been good, the Committee is cognisant of

the views expressed to us by shareholders and investor bodies.

Accordingly, we have decided to make a further discretionary

reduction. In order to reflect the Company’s use of the CJRS for

just under three months (25% of the year) during this financial

year, we have reduced the overall incentive by 25%. This results in

a total award for the CEO of 71.4%, of which half will be deferred

and paid in shares as usual.

Whitbread Annual Report and Accounts 2021/22 88

Remuneration Committee Reportcontinued

Remuneration Report continued

Annual general meeting

At the 2021 AGM, whilst the majority of shareholders supported

theresolution to approve the 2020/21 remuneration report,

asignificant minority did not. We have consulted with major

shareholders during the year and we concluded that the main

reasons for the lack of support from some shareholders related

tothe annual incentive being awarded in respect of 2020/21,

albeitit was carried over until 2021/22 subject to the

achievementof certain objectives.

The Committee remains of the view this was the right decision

tohave taken at the time due to outstanding performance

whichhas continued into year two of the recovery plan, much

benefiting shareholders. It was the optimum way of incentivising

the recovery of the business from the pandemic, and provided

anelement of retention at a time when long-term incentives

werenot available. However, we believe that the joint decision

byAlison Brittain, Louise Smalley and the Committee, for Alison

and Louise not to receive an incentive payment has addressed

the issue in full.

Together with my colleagues on the Remuneration Committee,

Ivery much hope that shareholders will support both the new

remuneration policy and this remuneration report at the 2022 AGM.

Group Finance Director/Chief Financial Officer

As announced previously, our Group Finance Director, Nicholas

Cadbury, stepped down from the Board when he left the Company

on 20 March 2022. As announced at the point of his departure,

thetreatment of his remuneration was fully in accordance with

theapproved policy (see page 108 for further information).

Hemant Patel was appointed as Chief Financial Officer with effect

from 21 March 2022. His remuneration details are included on

page 91 and all elements are in line with the approved policy.

The wider organisation

This report is necessarily focused on executive remuneration,

butthe Committee is very cognisant of the need to consider

remuneration structures across the workforce when taking

decisions on executive pay. It was pleasing that we were able to

give all UK-based hourly paid team members a mid-year pay

increase which was in addition to last April’s increase. It meant

that all of our pay rates were ahead of the National Minimum

Wage and National Living Wage, with all hourly pay rates

increasing by at least 7.8% over the year. The additional increase

was to thank our teams for helping stand the business back up

following the closure of most of its estate during lockdown and

as a result of the strong summer demand seen across the hotel

market, in addition to helping to attract new talent. Our hourly-

paid team members also received two bonuses in the year: a

special recognition payment in May and a summer retention

award. This year’s salary review for executives will be in line

withthe review across the organisation.

The year ahead

I explained in last year’s report that, recognising that there

remained significant uncertainty because of the unpredictable

external environment, the Committee had decided to take a

different approach by setting a sales-adjusted profit target

forthe 2021/22 annual incentive. At the time, the Committee

expected to revert to the usual approach for the 2022/23 annual

incentive and, whilst some uncertainty remains, a fixed profit

target has been set.

Alison Brittain’s strategic growth objectives for the 2021/22 annual

incentive included a number of ESG-specific objectives, further

details of which are shown on pages 104 and 105. The Committee

recognises the growing importance of ESG issues and it was clear

from the shareholder consultation that there is a desire from a

broad collection of shareholders to include ESG measures as part

of executive remuneration. It has been decided to include a 10%

allocation to ESG, split between Force for Good and customer

metrics, and further details are included on page 110.

In summary, the performance measures for the 2022/23 annual

incentive are: profit (50%), efficiency savings (20%); strategic

growth objectives (20%); and ESG (10%).

Recognising that there does remain some external uncertainty,

we have elected to retain the same underpins for the Restricted

Share Plan 2022 award as used for the 2021 award, being: a

balanced overall assessment of performance and delivery against

strategic priorities; and a cumulative cost efficiency saving. It is

the Committee’s intention to return to the type of underpins

which we originally used when the Restricted Share Plan was

developed, and this is likely to be from 2023 onwards.

I look forward to meeting some of you at our AGM in June and

will be happy to answer any questions you might have on our

revised remuneration policy or on the application of the

current policy.

Frank Fiskers

Chair, Remuneration Committee

27 April 2022

Whitbread Annual Report and Accounts 2021/22

Financial statements Other informationStrategic report Governance

REMUNERATION AT A GLANCE

Business performance

Financial measures

+25%

Sales growth vs the market

The chart looks at the value over ten years of £100 invested in Whitbread PLC on 1 March 2012 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.

£40m

Efficiency savings

Employees

› Team members received special

recognition payments in May 2021

toreward them for their effort and

contribution during 2020/21

› A retention bonus for our hourly paid

team members who stayed with us

over the busy summer period

› A mid-year additional pay increase for

our operational team members, with

minimum pay rates increased by 5%

› Enhanced sick pay for COVID-related

absence

› Over 8,000 jobs created

› Investment in diversity & inclusion

training and strong progress against

leadership diversity targets

› 1,086 team members started

apprenticeships during 2021/22

and95%of learners continued

theirapprenticeships while we

werestill not fully reopened

Investors

› Dividend of 34.7p per share

› Significant market outperformance

inthe UK, with Premier Inn total

accommodation sales 14.8% ahead of

the midscale and economy market

› Expansion continuing at pace in

Germany with 35 open hotels and 41

in the pipeline, with accommodation

sales 189.7% ahead of 2019/20

Executives

› 2020/21 incentive performance

requirements fully delivered, but

willnotbe received

› 2021/22 incentive reduced by 25% to

reflect the use of the CJRS for the first

three months of our financial year

Customers

› Significant investment in our CleanProtect

promise, our rigorous daily cleaning

regime to help protect guests

› Added additional room rate classes to

give more flexibility during the increased

uncertainty, following the increased guest

refunds at the start of the pandemic

› c.1,650 Premier Plus rooms rolled out

› Introduced a twin room solution to give

customers greater choice

› Significantly enhanced our food offer

and improved our core drinks offer

Suppliers

› Supported supplier cash flow with

temporary extension of payment terms

on large value orders and fast-tracking

of supplier invoicing queries

› Introduced a committed buy process,

giving additional contractual security

on long-haul and campaign products

› Used our UK logistics network to

support suppliers with deliveries

duringdriver and transport shortages

› Appointed a third party to

supportsuppliers with post-

Brexitcustoms processes

› Maintained responsible sourcing

programme despite COVID challenges

Communities

› Raised £1.7m for Great Ormond Street

Hospital Children’s Charity (GOSH

Charity), resulting in a total of £20m

since the start of our partnership,

which has supported the development

of the Sight and Sound Centre which

isnow fully open

› Decision taken that all new build

construction will be industry-leading

BREEAM Excellent standard

Joint venture partners

› Additional financial support agreed

for Pure due to COVID impact on

thebusiness

Landlords

› All rent paid in full, in contrast

tocompetitors

Environment

› Net Zero target brought forward by

ten years to 2040 and accelerated

interim target agreed to 2030

› Scope 3 targets set and commitment

given to be SBTi accredited

› Food waste: over 500,000 meals

donated to FareShare

› Force for Good rolled out in Germany

Details of how the Board considers the

interests of the Group’s employees and

other stakeholders is contained on

pages 50 to 54.

Stakeholder experience in 2021/22

Total shareholder return

01 Mar

2012

28 Feb

2013

27 Feb

2014

26 Feb

2015

03 Mar

2016

02 Mar

2017

01 Mar

2018

28 Feb

2019

27 Feb

2020

25 Feb

2021

03 Mar

2022

300

250

200

150

100

Whitbread

FTSE 100

Source: Datastream from Refinitiv

Whitbread Annual Report and Accounts 2021/22 90

Remuneration Report continued

Incentive outcomes for 2021/22

The table below sets out the outcome under the 2021/22 annual incentive. As outlined on page 88, a reduction has been applied to the

formulaic outcome to reflect the Company’s use of the CJRS for three months during 2021/22. The total incentive earned is as follows:

Measure Threshold Target Max

Weighting

(% of

maximum)

Outcome achieved

Alison

Brittain

Louise

Smalley

Profit

performance

Sales growth vs market measure Actual: +25% 25% 25% 25%

-1% 0% +2.25%

Profit conversion measure Actual: (£16m) 25% 25% 25%

(£64m) (£44m) (£24m)

Efficiency savings Actual: £40m 20% 20% 20%

£20m £25m £30m

Strategic growth objectives Details of performance are

setout on pages 104 and 105

30% 25.2% 25.39%

Formulaic outcome (% of maximum) 95.20% 95.39%

Outcome after discretionary reduction in bonus opportunity (% of maximum) 71.40% 71.54%

Adjusted total outcome (% of salary) 121.38% 60.81%

Actual annual bonus (£’000) 1,086 244

1 Louise Smalley retired from the Company and stepped down from the Board on 31 August 2021. The bonus outcome has been pro-rated to reflect the part of the year during

which Louise served on the Board.

As usual, 50% of the total annual incentive achieved will be deferred and paid in shares which will vest after three years.

2021/22 LTIP outcome

There were no LTIP awards due to vest during 2021/22. The first awards made under the Restricted Share Plan (“RSP”) will vest

in2023, subject to the achievement of the two performance underpins.

Implementation of the remuneration policy for 2022/23

Base salary

Alison Brittain will receive a salary increase in May 2022 in line with the general increases in pay for salaried employees across the

organisation. Hemant Patel, having recently been appointed, will not be entitled to a salary increase in May.

Salary at

1 May 2022

(£000’s)

Salary at

1 May 2021

(£000’s) % increase

Alison Brittain 921 895 3%

Hemant Patel 515 N/A N /A

Pension

Alison Brittain’s pension contribution will reduce to 10% effective from 31 December 2022, at which point it will be aligned with the

rate available to the majority of the wider workforce. On appointment, Hemant Patel’s rate was set at 10%.

Pension

contribution

rate from 31

December

2022 (% of

base salary)

Pension

contribution

rate from May

2022 (% of

base salary)

Pension

contribution

rate from May

2021 (% of

base salary)

Alison Brittain 10% 15% 18%

Hemant Patel 10% 10% N/A

Annual Incentive Scheme

The maximum bonus for 2022/23 for the current executive directors will be 170% of base salary, with awards payable based on

thefollowing measures:

Restricted Share Plan

Awards are based on 125% of salary for Alison Brittain and 110% of salary for Hemant Patel, and are expected to vest in 2025,

afterwhich they will be subject to a two-year holding period. The awards are subject to the following underpins:

Balanced overall assessment of performance and delivery

against strategic priorities

Cumulative cost efficiency saving of £60m over the three-year

performance period

Profit performance: 50% ESG: 10%Efficiency: 20% Strategic growth: 20%

Strategic alignment: 30%Financial alignment: 70%

91Whitbread Annual Report and Accounts 2021/22

Financial statements Other informationStrategic report Governance

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 (AIS)

› 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(RSP)

› 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

This report outlines the Company’s directors’ remuneration policy

(the 'Policy'), which shareholders will be asked to approve at

theannual general meeting to be held on 15 June 2022. Subject

to shareholder approval, the Policy will be effective from the date

ofthe 2022 AGM and is intended to apply for three years.

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 2021/22 92

Remuneration Report continued

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 (AIS)

› 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(RSP)

› 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.

Whitbread Annual Report and Accounts 2021/22

Financial statements Other informationStrategic report Governance

Future policy table

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.

Whitbread Annual Report and Accounts 2021/22 94

Directors' Remuneration Policycontinued

Remuneration Report continued

Future policy table

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.

Whitbread Annual Report and Accounts 2021/22

Financial statements Other informationStrategic report Governance

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 2022/23, 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 2022/23 package

Alison Brittain

Below threshold

87% £1,071,000

On target

Maximum

Maximum, with 50%

share price growth

£4,364,000

40%18%21%

30% £3,788,00025%

38% £3,005,00031%

13%

4% 21% 21%

4% 13% 13%

18%

Hemant Patel

Below threshold

91% £587,000

On target

Maximum

Maximum, with 50%

share price growth

Salary and benefits

£2,312,00037%19%23%

28% £2,029,00026%

36% £1,591,00034%

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

2022/23. For the CEO this means the

salary has been pro-rated to reflect the

increase from 1 May 2022. The CFO’s

salary was set on appointment and will

not increase from 1 May 2022.

› Benefits are included at the value in

the2021/22 single figure table. As the

incumbent CFO was not on the Board

during 2021/22, we have taken the

outgoing CFO’s benefits for 2021/22

asarepresentative figure.

› The CEO’s pension is calculated based

onthe change in contribution rates as

outlined on page 100. The CFO’s pension

is 10% of salary.

› Fixed pay elements plus target annual

bonus and RSP.

› Incentives are based on salaries at

1 May2022.

› 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 2022/23 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 2021/22 96

Directors' Remuneration Policycontinued

Remuneration Report continued

Performance measures

With the exception of base salary, benefits, pension and

participation in the Sharesave scheme, all other elements of

theremuneration packages of the executive directors are linked

to performance.

The RSP is subject to performance underpins, which,ifnot met,

may cause an award to be reduced. The RSP was introduced to

enable the growth strategy in boththe UK and Germany, to

support shareholder alignment through direct exposure to share

price and to retain executive directors throughout an important

time for the business to deliver the growth. The underpins each

year are set taking into account the business plan and the

Group’s strategy so as to protect againsta payment for failure.

The performance measures and targets for the Annual

IncentiveScheme are selected annually to align with the

business strategy. Targets for measures are normally set

atthebeginning of the financial year.

There are a number of types of measure used to determine

thelevel of awards under the scheme. There are financial and

other business measures and some strategic growth objectives.

The growth objectives will be quantitative measures linked

toindividual responsibilities in the context of our strategic

objectives and will be reviewed in advance by the Committee.

Targets are set taking into account the business plan.

Malus and clawback

Malus and clawback provisions apply to the RSP for the

duration of the vesting period and for two years following

vesting respectively, which can result in a reduction of the

award (including to zero). Malus and clawback provisions apply

to the deferred annual bonus and cash portion of the bonus

respectively for the duration of three years from the date of the

award (or, if earlier, in the case of a deferred share award, the

date of vesting).

Malus and clawback can be triggered where, in the opinion of the

Committee, there are exceptional circumstances including: (i) a

material misstatement of results; (ii) misconduct on the part of the

participant; (iii) where the participant is deemed to have caused a

material loss for the Company and/or the Group as a result of (a)

reckless, negligent or wilful actions or (b) inappropriate values or

behaviour; (iv) where there has been an event that has caused, or

is likely to cause, material reputational damage to the Group; (v)

an error in assessing the performance conditions or underpin that

results in the award vesting/bonus being awarded to a greater

degree than would have been the case had that error not

occurred; or (vi) insolvency or corporate failure.

For awards already granted, malus and clawback provisions as

in place at the time of that grant will continue to apply.

Shareholding requirements

The Chief Executive is required to build and hold a shareholding

at least equal to the value of 300% of salary, and the Chief

Financial Officer is expected to reach a holding equal to the

value of 200% of salary. Until they reach this level, executive

directors are expected to retain 100% of vested awards (after

the deduction of income tax, national insurance contributions

and dealing fees). In addition, a newly appointed executive

director is expected to build a shareholding in the Company

during the vesting of any share awards. The failure to adhere to

these requirements may lead tothe executive director being

excluded from participation infuture share plan awards.

Shares held outright (including by a connected person)

counttowards the shareholding requirement. In addition,

anyvested but unexercised options, deferred bonus shares or

vested Long Term Incentive Plan (LTIP) or RSP share awards

subject to a holding period count towards the shareholding

requirement on a notional net of tax basis. Any awards still

subject to performance conditions, including awards subject

toa performance underpin under the RSP, cannot count

towards a shareholding requirement.

Additionally, executive directors will continue to have shareholding

requirements post-cessation. It is a term of grant of all deferred

bonus and RSP awards granted since December 2019 that the

award cannot be exercised if an individual is not, at that point in

time, meeting their post-cessation shareholding requirement.

The post-cessation shareholding requirements have been set at:

› 100% of the normal shareholding requirement for the first

year post-cessation of employment;

› 50% for the second year post-cessation of employment; and

› 25% for the third year post-cessation of employment.

In cases where the individual has not had sufficient time to

buildup shares to meet the above levels, the requirement is

setat the individual’s actual level of shareholding at cessation

ofemployment. The Committee retains the flexibility to waive

the post-cessation shareholding requirements in certain

exceptional circumstances.

The Committee recognises that it will be unable to enforce

thepost-cessation shareholding requirement by restricting

thesale of shares vesting under share awards where the

awardshad already been granted to the executive directors

prior to December 2019, as no such conditions were part of

these awards when granted and the Committee believes it is

inappropriate to retrospectively amend these. The Committee

has therefore decided to establish transitional arrangements

forthe executive directors as at December 2019 whereby

post-cessation shareholding requirements will build as future

awards vest. Anynewly appointed executive directors will be

subject, in full,to the post-cessation shareholding requirement.

Changes to the Policy in 2022/23

The principal change to the proposed policy vs that approved

by shareholders at the 2019 general meeting is the reduction of

executive directors' pension allowance to 10% in line with the

level available to the wider workforce. Other changes are minor

drafting amendments.

Service contracts and external appointments

The key terms of the executive directors’ service contracts

areas follows:

› notice period — six months by the director and 12 months

bythe Company;

› termination payment — see policy on payment for loss of

office below;

› 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.

97Whitbread Annual Report and Accounts 2021/22

Financial statements Other informationStrategic report Governance

The dates of the executive directors’ service contracts are

asfollows:

Alison Brittain 21 May 2015

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

Chris Kennedy 1 March 2016

The Chairman and non-executive directors were each appointed

for an initial three-year term and are subject to annual re-

election at the AGM.

Policy on payment for loss of office

Base salary and contractual benefits

All of the executive directors have a rolling service contract

witha 12-month notice period from the Company. The Company

may make a payment in lieu of notice to include up to 12 monthly

payments of base salary and the cash equivalent of pension

contributions. The Company may also either allow for contractual

benefits to continue during this time or, at its sole discretion, pay

the value of those benefits on a monthly basis. Neither notice nor

payment in lieu of notice would be given if anexecutive director

is summarily dismissed for reason of grossmisconduct.

An executive director is under a contractual duty to mitigate his

or her position by actively seeking an alternative remunerated

position and the Company will make a corresponding reduction

in any payment in lieu of notice. Where a payment in lieu of

notice is not applicable, the payment of salary and contractual

benefits would cease on the individual’s leaving date.

The Committee reserves the right to make any other payments

in connection with a director’s cessation of office or employment

where the payments are made in good faith in discharge of an

existing legal obligation (or by way of damages for breach of

such an obligation) or by way of settlement of any claim arising

in connection with the cessation of a director’s office or

employment. Any such payments may include but are not limited

to paying any fees for outplacement assistance and/ or the

director’s legal and/or professional advice fees in connection

with his or her cessation of office or employment.

Annual Incentive Scheme

If an executive director leaves the Company for a ‘permitted

reason’ under the rules of the scheme (redundancy, death, the

sale of his or her employing company or business out of the

Group, injury, ill-health or disability, or if the Committee decides

to apply ‘good leaver’ status in accordance with the discretion

outlined later in the 'Remuneration Committee discretion' section

of this Policy), the default position would be that unvested

deferred share awards would vest on the date of leaving and

atime pro-rated cash award would be made for the incentive

year in which cessation of employment occurs. No new deferred

share awards would be granted in respect of any Annual

Incentive Scheme award made after the executive director leaves

the Company, and the executive director would receive a time

pro-rated cash payment in lieu of the deferred share awards.

Notwithstanding the above, the Committee has the discretion

tomake a deferred share award for the incentive year in which

cessation of employment occurs, with any such award due

tovest at the same time as the awards made to continuing

employees for that year and for unvested deferred bonus awards

to vest as if the executive director had not left the Company.

If an executive director leaves the Company for any other reason,

25% of an outstanding deferred share award would vest if the

leaving date was between one and two years from the date of

grant and 50% of an outstanding deferred share award would

vest if the leaving date was between two and three years from

the date of grant. Any other unvested deferred share awards

would lapse on the date of leaving. The executive director would

receive no cash incentive payment for the financial year in which

they leave, and no deferred share awards would be awarded.

In the event that an executive director was to leave the

Company by reason of gross misconduct, or in circumstances

inwhich the reputation of the Company is materially damaged,

the malus provisions may be applied, in which case, no deferred

shares would vest.

In the event of a change of control of the Company, deferred

bonus awards will normally vest at that point unless the

Committee determines otherwise, e.g. a replacement award

isgranted by the acquiring company. For in year schemes,

nonew deferred share awards would be granted, and the

executive director would normally receive a pro-rated cash

payment inlieu of the deferred share awards, assuming that

theperformance metrics had been fully satisfied.

Restricted Share Plan

If an executive director leaves the Company for a ‘permitted

reason’ under the rules of the plan (redundancy, death, the sale

of his or her employing company or business out of the Group,

injury, ill-health or disability, or if the Committee decides to

apply ‘good leaver’ status in accordance with the discretion

outlined in the 'Remuneration Committee discretion' section

ofthis Policy), the default position would be that any unvested

RSP awards would be pro-rated for time served (over the

relevant underpin vesting period) unless the Committee

determines otherwise. The extent to which unvested RSP

awards vest would be determined by the Committee taking

intoaccount the performance underpins, the underlying

financial performance of the Company and any other factors

theCommittee considers appropriate, and the awards would

normally vest at the original vesting date, unless the

Committeedetermines otherwise. If the participant died,

awardswill normally be allowed to vest (subject to the

factorsset out above) on the date of death.

If an executive director leaves the Company for any other reason,

any unvested RSP awards would lapse at the date ofleaving.

Vested, but unexercised, RSP awards (including those subject toa

holding period) would normally be exercisable up to the later of

six months from the date of leaving or six months from the end of

the holding period. However, if the executive directoris summarily

dismissed for gross misconduct, the award would lapse.

Whitbread Annual Report and Accounts 2021/22 98

Directors' Remuneration Policycontinued

Remuneration Report continued

In the event that an executive director was summarily dismissed

for gross misconduct or was to leave the Company in circumstances

in which the reputation of the Company is materially damaged,

the Committee would consider the application of the clawback

and/or malus provisions to which the awards were subject. In

the event of a change of control of the Company, unvested RSP

awards will typically vest to the extent determined by the

Committee, taking into account (i) the Committee’s assessment

of the relevant performance underpins; (ii) the underlying

financial performance of the Company; and (iii) such other

factors as it considers relevant. RSP awards will (unless the

Committee determines otherwise) be reduced on a time-

apportioned basis, normally by reference to the proportion of the

underpin measurement period (or if the Committee determines,

the vesting period) that has elapsed. In determining whether an

award should not be time pro-rated, the Committee will take

into account: (i) the performance of the Company during the

vesting period; (ii) the Company’s share price performance

during the vesting period; (iii) the amount of consideration from

any buyer; and (iv) such other factors as itconsiders relevant.

Approach to remuneration on recruitment

Our approach to recruitment is that remuneration should be

setin line with the policy table set out above. Whilst we would

not seek to vary this approach, there may be circumstances in

which it is necessary to do so.

On the appointment of a new executive director, base salary

levels will be set taking into account a range of factors including

experience and expertise, internal salaries, market levels and

cost. If an individual is appointed on a base salary below the

market positioning contingent on individual performance, the

Committee may realign base salary over the one to three years

following appointment, which may result in a higher than

normal rate of annualised increase, with any such increase

aligned to internal policies. If the Committee intends to do so,

itwill be noted in the first directors’ remuneration report

following an individual’s appointment.

Other elements of annual remuneration will be set in line with the

Policy set out in the policy table. As such, variable remuneration

will be capped at 200% of salary under the Annual Incentive

Scheme. If a new executive director is recruited, they can be

granted an award under the RSP, themaximum opportunity of

which will be 125% of salary. The following exceptions will apply:

› as deemed necessary and appropriate to secure an

appointment, the Committee is able to make additional

payments linked to relocation; and

› the Committee may also make an additional award of cash or

shares in connection with the appointment of a new director

inorder to compensate for the forfeiture, or the loss of value

inrespect of all or part, of an award from a previous employer.

Such awards would take account of the value, the performance

conditionality of the awards which they replace, the proportion

of the performance period remaining and the type of award.

The Committee would take into account the strategy at

Whitbread and may also require the appointee to purchase

shares in Whitbread to a pre-agreed level prior to vesting.

Where an individual is recruited internally to the position of

executive director, Whitbread will seek to honour any pre-

existing contractual commitments, taking into account the

remuneration of the existing executive directors.

Service contracts will be entered into on terms similar to those

for the existing executive directors, summarised in the service

contracts and external appointments section. However, if

necessary, the Committee would authorise the payment

ofarelocation allowance and repatriation, as well as other

associated international mobility terms or agree terms

appropriate to the local market for an executive director

basedoverseas.

With respect to the appointment of a new Chairman or non-

executive director, the approach will be consistent with that

currently adopted. Variable pay will not be considered and

assuch no maximum applies. With respect to non-executive

directors, fees will be consistent with the Policy at the time of

appointment. If necessary, to secure the appointment of a new

Chairman not based in the UK, payments relating to relocation

and/or housing could be considered.

A timely announcement with respect to any director

appointment will be made to the regulatory news services

andposted on Whitbread’s website.

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.

For example, the principle change to the proposed policy versus

that approved by shareholders at the 2019 General Meeting is

the reduction of executive directors' pension allowance to 10%

to align with the level available to the wider workforce. Further,

Alison Brittain's salary increase for the upcoming year was set

inline with the general increases in pay for salaried employees

across the organisation.

This section of the Policy 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 1,900 employees are entitled to participate in

the Group’s private healthcare scheme, with 630 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 UK employees, including the

executive directors, on equal terms. The Company has

shareholder approval to extend its share schemes overseas

andthe Committee has now established a Sharesave scheme

for employees in Germany.

99Whitbread Annual Report and Accounts 2021/22

Financial statements Other informationStrategic report Governance

Annual Incentive Scheme

Approximately 3,900 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 45 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 90 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 45 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.

From 31 December 2022, the incumbent executive directors

will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. Employees who do not choose to participate

may be automatically enrolled, with contributions in line with

the automatic enrolment regulations.

Consideration of shareholder views and summary of decision

making process

The Committee has consulted with Whitbread’s major investors,

along with Glass Lewis, ISS and the Investment Association.

These consultations have been very helpful to us as we have

updated our policy for the future, and I would like to thank all

those who responded to the consultations for their time and

input. Following feedback that financial metrics should have an

increased weighting within the Annual Incentive Scheme, we

have increased the weighting to a minimum of 60% of the total

award and stated that the predominant amount is intended to

be profit. This is the only change we have made to the proposed

policy following the consultation process, as feedback has been

positive and supportive of the Committee’s approach.

Legacy matters

The Committee reserves the right to make any remuneration

payments and/or payments for loss of office (including

exercising any discretions available to it in connection with

suchpayments) notwithstanding that they are not in line with

the Policy set out above where the terms of the payment were

agreed: (i) before the Company’s first shareholder-approved

directors’ remuneration policy came into effect; (ii) before

thisPolicy came into effect if the terms were in line with the

Company’s shareholder-approved directors’ remuneration

policy in force at the time those terms were agreed; or (iii) at

atime when the relevant individual was not a director of the

Company and, in the opinion of the Committee, the payment

was not in consideration for the individual becoming a director

of the Company. For these purposes, ‘payments’ includes the

Committee satisfying awards of variable remuneration and,

inrelation to an award over shares, the terms of the payment

are 'agreed' at the time the award is granted.

Remuneration Committee discretion

The Committee retains the discretion to apply ‘good leaver’

terms to leavers in respect of both the Annual Incentive Scheme

and the RSP. In exercising its discretion, the Committee must

consider the individual circumstances in the particular case

andmust not exercise its discretion in a way which would

bediscriminatory on grounds of sex, race, age or any other

protected characteristic within the meaning of section 4 of

theEquality Act 2010.

The Committee must also, so far as it is able to do so, exercise

its discretion in a way which is consistent as between individuals

who are in the same position.

Under the rules of the Annual Incentive Scheme, if ‘good leaver’

terms apply, any deferred share awards normally vest in full on

the date of leaving and may be exercised within six months.

Under the rules of the RSP, the award would normally vest

subject to the satisfaction of performance underpins measured

at the end of the period originally set (unless the Committee

determines otherwise). The number of shares vesting would

normally be on a pro-rata basis, taking account of the proportion

of the relevant period that the individual had been employed

within the Group (unless the Committee determines otherwise).

The extent to which RSP awards vest would also be subject to

the Committee’s discretion (mentioned above) to determine the

level of vesting based on the underlying financial performance

of the Company and such other factors it considers appropriate.

Vested but unexercised awards (including those subject to a

holding period (under the RSP) are exercisable for six months

from the later of the end of any relevant holding period and the

date of termination.

The Committee sets the performance targets for the Annual

Incentive Scheme and the underpins for the RSP. The

Committee may change a performance target or underpin from

time to time to take account of legal changes or to obtain or

retain favourable tax, regulatory or exchange control treatment

or in the event that it considers it fair and reasonable to do so.

Any change to an existing underpin under the RSP must not

have the effect, in the opinion of the Committee, of making the

underpin materially easier or materially more difficult to achieve

than it was when the award was initially granted.

The Committee has the discretion to override formulaic

outcomes under the Annual Incentive Scheme and RSP, where

itconsiders it would be appropriate to do so to better reflect

overall Company performance.

Whitbread Annual Report and Accounts 2021/22 100

Directors' Remuneration Policycontinued

Remuneration Report continued

Remuneration Committee – membership

Name of director

Meetings attended and

eligible to attend

Frank Fiskers (Chairman) 4/4

David Atkins 4/4

Kal Atwal 4/4

Adam Crozier 4/4

Richard Gillingwater 4/4

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 provision 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

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 £154,500. 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.

Remuneration Committee agenda – 2021/22

› Approval of Annual Incentive Scheme and targets for 2021/22.

› Deferral of awards to executive directors under the Annual

Incentive Scheme for 2020/21.

› Executive directors’ and senior executives' salary review.

› Approval of the 2021 awards made under the RSP.

› Approval of the 2021 remuneration report.

› Update to Sharesave rules.

› Review of wider remuneration strategy across the organisation.

› Shareholder consultation in relation to revised

remunerationpolicy.

› Review of senior executive pension arrangements.

› Committee effectiveness evaluation.

› Review of the terms of reference.

101Whitbread Annual Report and Accounts 2021/22

Financial statements Other informationStrategic report Governance

ANNUAL REPORT ON REMUNERATION

101

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 2020 and ten months’ pay based on the

director’s salary from 1 May 2021.

Benefits

The benefits received by each executive director include family

private healthcare and a cash allowance in lieu of a company car.

Annual Incentive Scheme

2020/21 annual incentives

As explained in last year’s report, the targets for the 2020/21

incentive scheme had been established prior to the first

COVID-19 lockdown coming into force and it was clear very

early in the year that the profit element, as originally set, could

not be achieved. However, the Committee decided the target

would not be adjusted.

Following the end of the year, we carefully considered the levels

of achievement for the other elements of the incentive. Whilst it

was clear that these stretching objectives had been achieved,

wedecided to make no payment at that time, but rather to carry

over this earned part of the incentive, subject to an underpin

based on the achievement of further stretching targets, to be

assessed in2021/22. Whilst we were confident the 2020/21

incentive outcome fully reflected the strong performance in that

year, thisapproach allowed us to conserve cash, provide a direct

incentive for recovery of the business from the pandemic and

aretention mechanic at a time when the executives had very

little retention coming from long term incentive plans. It was,

therefore, aligned with the interests of shareholders.

The underpin on this deferred element required satisfactory

performance to be delivered on at least 50% of each executive's

strategic objectives set for the 2021/22 financial year.

As explained on page 88, Whitbread has performed

exceptionally well in challenging external circumstances this

year. Performance has been significantly ahead of the budget/

economy hotel market and also ahead of internal and external

expectations. We have continued to grow the business in

Germany, building a portfolio of 35 hotels in this attractive

growth market. The Committee has also considered the

treatment of allstakeholders over the course of the year:

customer and guestscores have improved; our efficiency

programme has accelerated; our hourly paid team members

have received twopay rises and two bonus payments; we

havesupported suppliers throughout and paid on time; and we

have announced an intention to recommend a final dividend.

This is due to the strong performance of all of our employees,

including the executives, and is reflected in the outcomes

oftheir strategic objectives. The outcomes for the executive

directors are 84.0% and 84.6% for Alison and Louise

respectively, and are clearly itemised on pages 104 and 105.

These outcomes are well above the 50% threshold for the

underpin to be met.

As the underpin has been met, the incentive would ordinarily

bepayable based on the structure and conditions we set in

2021and explained to shareholders at that time. However,

whilstthe Committee believes management has performed

exceptionally well during the last two years and all performance

requirements have been fully delivered, Alison Brittain, Louise

Smalley and the Committee have jointly come to the decision

that Alison and Louise will not receive these incentive payments.

Instead, an equivalent amount is to be used to form awelfare

fund for Whitbread employees. The incentive payment for

Nicholas Cadbury lapsed.

Although no payment will be made, the Committee remains

ofthe view that the approach taken last year served a useful

purpose in creating an appropriate structure at a time of

significant uncertainty in the business and the wider economy,

and balanced this against investors' guidance at the time.

2021/22 annual incentives

The incentive for 2021/22 was assessed against a combination

of profit, efficiency savings and strategic objectives. The

Committee took a different approach to setting profit targets

given the significant restrictions in the hospitality sector and

anuncertain outlook.

The profit target was assessed in two parts, against targets set

atthe start of the year. The first part assessed profit conversion,

with the profit target adjusted for actual sales. This allowed

theCommittee to measure whether Whitbread was generating

the right return on its sales, when the absolute level of sales

wasdetermined in large part by the timeframe during which

restrictions on trade were in place. The second part assessed

sales growth relative to the market, which enabled the Committee

to test if the Company was performing more strongly than

competitors and delivering additional profit as a result.

When calculating the outcome of the profit conversion element,

the Committee reviewed the need for potential adjustments.

Thetargets were set based on an assumed level of Government

support. During the course of the year additional Government

support, not included in the original targets, was utilised. This

was primarily due to a grant received in Germany and an

extension of the Government’s CJRS in the UK. To ensure a

like-for-like assessment of performance vs targets set at the

startof the year, this additional Government support of £80m

was removed from the underlying profit outcome. This ensures

that executives’ incentive outcomes do not benefit from the

additional support received.

Single total figure of remuneration – executive directors (audited information)

Base salary

Benefits Pension Fixed pay

Annual

Incentive

Scheme

Long-term

incentive Variable pay Total

Director

21/22

£’000

20/21

£’000

21/22

£’000

20/21

£’000

21/22

£’000

20/21

£’000

21/22

£’000

20/21

£’000

21/22

£’000

20/21

£’000

21/22

£’000

20/21

£’000

21/22

£’000

20/21

£’000

21/22

£’000

20/21

£’000

Alison Brittain 892 816 20 22 166 194 1,078 1,032 1,086 – – – 1,086 – 2,164 1,032

Nicholas Cadbury 606 556 20 22 112 131 739 709 – – – – – – 739 709

Louise Smalley

200 367 9 19 38 86 247 472 244 – – – 244 – 491 472

1 The 2020/21 base salary figures reflect that the executive directors agreed to a 30% three-month reduction in response to the pandemic. The figures, had no reduction been

made would have been £882k, £606k and £400k for Alison, Nicholas and Louise respectively.

2 Louise Smalley retired from the Company and stepped down from the Board on 31 August 2021. The figures shown for the 2021/22 financial year are for the part of the year

during which Louise served on the Board.

Whitbread Annual Report and Accounts 2021/22 102

Annual Report on Remunerationcontinued

Remuneration Report continued

Full details of the outcome against all performance measures is

included on page 91.

The Committee recognises the exceptional performance shown

by the executive directors in leading Whitbread through a very

challenging year while positioning the Company to capture

future growth. The Committee is comfortable that the formulaic

outcome fully reflects management's strong performance

against targets for the year.

However, the Committee is focused on ensuring that the final

outcome best reflects the wider stakeholder experience and the

views expressed to us by shareholders and investor bodies. As

such, it has decided to make a further discretionary reduction.

In order to reflect the Company’s use of the CJRS for the first

three months of our financial year, the Committee is reducing

the overall outcome by 25%. This means executives are only

receiving an incentive payment for the final nine months of the

year when the CJRS was not accessed.

For the 2020/21 incentive, the Committee made a pre-emptive

decision to cancel the profit measure, but to continue with the

other elements. We know that a significant minority of shareholders

did not support this action and that is why, for the 2021/22

incentives, we have gone further and reduced the entire annual

incentive payment to zero for the period during which the CJRS

was accessed.

Awards based on profit measure (50% of total award)

As stated last year, the profit target was measured on a basis

that adjusted for the level of actual sales. This enabled the

executives to be rewarded for delivery of what was in their

control: profit conversion; and sales relative to the market.

The measure was constructed in two parts. To assess profit

conversion, the first element measured the Whitbread profit

against the expected profit given the actual Whitbread sales.

Toassess sales relative to market, the second element measured

Whitbread sales growth vs Market sales growth, using FY20 as

a pre-COVID-19 reference point.

The outcomes under the sales growth and profit conversion

measures are set out below:

Sales growth

vs market

measure

Profit

conversion

measure

Sales growth

vs Market

(FY20 base

point)

Profit

(£m)

Threshold (25% maximum) -1% (£64m)

Target (50% maximum) 0% (£44m)

Stretch (100% maximum) +2.25% (£24m)

Actual +25% (£16m)

Outcome (% of maximum) 100% 100%

Sales growth

› Target performance was set at growing sales in line with

market, and stretch performance was set at growing sales

by2.25% points ahead of market.

› Our actual sales growth was 25% points ahead of market,

delivering an additional £279m of profit.

Profit conversion

› Targets for the profit conversion measure were set based

onthe total Whitbread sales, using a formula determined

atthe start of the year. Based on our actual sales, the

targeted loss was (£124m).

› However, since the targets were agreed, unplanned UK

andGermany government support was made available

toWhitbread, totalling £80m.

› This government support was accepted in order to protect

jobs and allow Whitbread to continue to invest for growth.

› However, to ensure that incentive outcomes are not boosted

by receiving this support, this additional government support

was added to the targeted profit outcome to increase the

target from (£124m) to (£44m).

› The actual outcome of (£16m) was in excess of the stretch

goal of (£24m).

The percentage of salary received by each director as a result

ofthe profit measure is as follows:

Director Total % of salary

Alison Brittain 85.00

Louise Smalley 85.00

Awards based on efficiency target (20% of total award)

The target was £25m with a threshold of £20m and stretch of

£30m. Stretch was exceeded, with efficiency savings of £40m

delivered in the year across procurement, operations and

property.

Director Total % of salary

Alison Brittain 34.00

Louise Smalley 34.00

103Whitb read Annual Report and Accounts 2021/22

Financial statements Other informationStrategic report Governance

Awards based on strategic objectives (30% of total award)

Each of the executive directors had a number of business objectives and 25% 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.

Alison Brittain, Chief Executive

Measures Actual outcome

Achievement

peroutcome

Manage the impacts of the COVID pandemic

Effectively manage the property portfolio Completed and maintained option on the targeted amount of

sale and leaseback opportunities ready to execute with Board

approval should it be required.

Completed forward funding of £73m for Marylebone

development.



Complete the US private placements buyback

toplanwith acceptable terms

Completed on time and in line with provisionlevel.



Deliver contract base efficiencies/labour

modelandproduce a smaller and simpler

fieldoperations structure

Completed and savings achieved ahead of target.



Launch new brand marketing campaign and

programme to ‘reboot’ sites to drive commercial

performance on reopening

Completed, with good return on investment and strong

commercial performance with significant market

outperformance. The outperformance vs Economy and Midscale

market was +14.8% for the year.



Manage operational impacts at sites in all territories Operational performance managed throughout period incl. health

and safety, site closures, site consolidation, and site reopening as

necessary across the four nations in the UK and Germany and the

UAEbusinesses.



Premier Inn growth and optimisation

UK room openings 30 hotels opened (c.3,800 rooms), ahead of target (20+ new

hotels, 2,500 new rooms).



Premier Plus rooms to be opened and new room

productstrialled

c.1,650 Premier Plus rooms opened and c.150 new room

products, ahead of target (300+ new Premier Inn Plus rooms

and trial 100+ new room products incl. twin rooms).



Maintain and develop plan for optimising the

property network

Completed above target – a portfolio of sites identified and

prepared for sale when market conditions are right.



Site disposals as part of network optimisation Completed disposal of nine sites valued ahead of target level

at £57m (target £40m).



New pipeline rooms and refurbishment Both just below target – c.700 rooms added to pipeline (target

750 rooms) and £29.3m of refurbs completed (target £30m).



Germany growth

Evaluate priority going concern portfolio acquisition

options

Significant number of portfolios assessed – ahead of schedule.



Execute at least one acquisition No acquisitions executed.



Delivery of German commercial strategy incl. review

of direct vs indirect booking strategy

New commercial strategy delivered and executed with above

market performance delivered at city level.



Hotel openings 14 hotels and c.2,200 rooms opened ahead of target (14 hotels

and c.1,800 rooms).



Refurbishment, rebranding and integration of Centro,

Hotels, three Accom and complete Foremost hotels

Completed.



Add pipeline sites Six pipeline sites added – ahead of target of five sites.



Group projects

Replacement room booking system project to

beontrack on time, quality and budget for

delivery2022/23

Project has been subject to re-planning of both time and budget.



Produce savings from UK property costs Achieved – delivered c.£8.65m cost and c.£16m net present

value (NPV) ahead of target delivery of c.£2m of property cost

savings from occupancy costs and re-gears of c.£5m NPV.



Annual Report on Remunerationcontinued

Whitbread Annual Report and Accounts 2021/22 104

Remuneration Report continued

Measures Actual outcome

Achievement

peroutcome

Complete full technical review of all commercial and

data systems. Deliver commercial IT agenda and

Payments remediation work

Technical reviews completed on track. Payment remediation

completed, including changing gateway and acquirer.

Commercial IT plan delivered on time.



ESG

Review and accelerate science-based Net Zero

targetfor carbon emissions

Board-approved plans for Net Zero carbon by 2040.



Develop Green Bond Framework and report against

use of £550m bond proceeds

Framework developed with report included on page 47. Of

£550m bond, we have established that c.£438m has already

been spent on qualifying projects.



Develop an ESG communications programme for

keyshareholders and other stakeholders

Delivered ESG report, two ESG conferences, and four analyst

teach-ins.



Inclusive leadership training completed for senior

leadership group and Group D&I commitments

agreed and communicated

Completed, with 2023 target for female representation in the

leadership group (40%) achieved and significant progress

made towards the 2023 ethnic diversity leadership target.



Achieved 84% of maximum = 42.84% of salary

Louise Smalley, Human Resources Director

Measures Actual outcome

Achievement

peroutcome

Optimising our ability to be productive and perform to our best

Launch of hybrid working within UK and Germany

Support Centres with aligned principles, actively

using Our Voice consultation forums in the UK to

drive listening, visible action and engagement

through the transition

Completed – consultation undertaken and transparent

communication to explain rationale to impacted employees.

Return to office in Sept 21 for majority in UK launched with

high-quality tools and guidance to support managers. German

phased return delayed due to Government guidance and review

of space requirements given capacity constraints, but all policy

processes and practices ready to be utilised.



Develop training and comms programme to reboot

sites on reopening to accelerate recovery

Completed – new hire retention ahead of 2019/20.



Maintain overhead cost efficiency discipline and

further manage cost by delivering efficiency savings

through contract base efficiencies and labour model

as sites reopen

Completed – governance processes performing well. Overhead

cost efficiencies from organisation redesign maintained.



Develop UK KPIs that will determine the underlying

site team stability post restrictions to actively

mitigate risk to the new operating models

Completed, with a full suite of KPIs for opening and targeted

understanding of movement by role and region understood to

enable targeted investments.



Enable our recovery with a targeted supply

management plan as the economy and labour

market opens

Not completed, with supply issues accelerating ahead of

ourresource readiness having significantly reduced

resourcingcapacity.



Simplification saving and service through technology

HR core IT platform review for UK and Germany Completed – investment approved and moved to RFP.



Stakeholder engagement with key audiences defined

and engaged

Completed, with some further alignment needed.



Define plan for de-risking future IT changes and quick

wins in terms of comms platforms for site engagement

Completed – data strategy being executed with comms

platform in pilot.



We are for everyone and we value difference/Attractingand hiring great diverse talent

Internal ethnicity pay gap report produced with

insights and action plans

Completed – first report communicated Company-wide with

context, action plan and 2023 commitments being tracked on

a new D&I scorecard.



Inclusive leadership training completed for senior

leadership group supported by their personal D&I

commitments agreed and communicated

Completed.



Gender network established with a structure

thattakes account of intersectionality across

thefournetworks

Partially completed – network and steerco launched together

with intersectionality bridge in progress but not complete.



Inclusive policy sprint plan defined and executed

tomaximise opportunities to sponsor inclusion

Completed – priority guidance and policy reviews completed

for all three launched networks, with disability inclusion

prioritising workplace assessments in H2.



Achieved 84.62% of maximum = 43.16% of salary

105

Whitbread Annual Report and Accounts 2021/22

Financial statements Other informationStrategic report Governance

Total awards

The maximum potential award was 170% of salary and the total incentive earned is as follows:

Director

% of salary

based on profit

% of salary based on

efficiency target

% of salary based on

strategic objectives Total % of salary

Total % of salary after

25% reduction Total £’000

Alison Brittain 85.00 34.00 42.84 161.84 121.38 1,086

Louise Smalley 85.00 34.00 43.16 162.16 121.62 244

The percentages shown above show the percentage of salary earned before any deductions. However, as explained on page 88, the

awards were reduced by 25% and this reduction is reflected in the cash total shown above as well as in the single figure table on

page 102. In Louise Smalley's case, the cash amount was further reduced to reflect the time served during the year. Half of these

awards will be paid in cash in May 2022, with the remaining half being settled in deferred shares, which are expected to vest in 2025.

Long-term incentives

No awards were due to vest to the executive directors under either the Long-term Incentive Plan or the Restricted Share Plan

during the year.

Pension

The executive directors receive a monthly amount in cash in lieu of pension contributions. This reduced from 21.5% to 18% in

May2021 and it will further reduce to 15% in May 2022.

Under the proposed remuneration policy on pages 92 to 100, this rate will reduce to 10% effective from 31 December 2022, at

which point it will be aligned with the rate available to the majority of the wider workforce. On appointment, Hemant Patel’s

ratewas set at 10%.

No executive director participates in a Group defined benefit or final salary pension scheme.

Single total figure of remuneration – Chairman and non-executive directors (audited information)

Base fee

Senior Independent

Director fee

Fee as Chairman of a

Board Committee

Fee as a member of a

Board Committee Total

Director

21/22

£’000

20/21

£’000

21/22

£’000

20/21

£’000

21/22

£’000

20/21

£’000

21/22

£’000

20/21

£’000

21/22

£’000

20/21

£’000

Adam Crozier 408 380 – – – – – – 408 380

David Atkins 62 58 – – – – 10 10 72 68

Kal Atwal 62 – – – – – 5 – 67 –

Horst Baier 62 58 – – – – 5 5 67 63

Fumbi Chima 62 – – – – – 5 – 67 –

Frank Fiskers 62 58 – – 20 20 5 5 87 83

Richard

Gillingwater 62 58 15 15 – – 5 5 82 78

Chris Kennedy 62 58 – – 20 20 – – 82 78

1 The 2020/21 base fee figures reflect that the Chairman and non-executive directors agreed to a 20% three-month reduction in response to the pandemic. The figures, had no

reduction been made would have been £400k for the Chairman and £61k for each of the non-executive directors.

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.

When the new remuneration policy was approved in December 2019, we took the opportunity to bring our shareholding

requirements for the executive directors in line with market practice. We increased the requirement for the Chief Executive from

200% of salary to 300% of salary and the requirement for the other executive directors from 125% of salary to 200% of salary.

Inaddition, new post-cessation shareholding requirements were introduced. These are subject to transitional arrangements for

theexecutive directors in role at the time they were introduced. We have also made changes to the method of calculation, with

unexercised share awards no longer subject to performance testing being taken into account (adjusted for any deductions to be

made at the point of exercise). All of the executive directors are in compliance with the requirement.

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.

Whitbread Annual Report and Accounts 2021/22 106

Annual Report on Remunerationcontinued

Remuneration Report continued

The table below shows the holdings of directors as at 3 March 2022:

Counting towards requirement Performance vs requirement

Director

Ordinary

shares Share awards

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 – 455 420 100 111 103 –

Executive directors

Alison Brittain 132,861 44,170 5,134 4,706 300 585 537 77,660

Nicholas Cadbury 39,099 19,172 1,678 1,484 200 282 249 46,419

Louise Smalley

64,794 16,662 2,576 2,217 200 694 563 18,295

Non-executive directors

David Atkins 3,137 – 99 94 100 159 151 –

Kal Atwal 2,063 – 60 62 100 97 100 –

Horst Baier 2,400 – 84 72 100 135 116 –

Fumbi Chima 315 – 10 9 100 16 15 –

Frank Fiskers 2,115 – 63 64 100 102 102 –

Richard

Gillingwater 2,000 – 70 60 100 112 96 –

Chris Kennedy 2,250 – 73 68 100 117 109 –

1 The market price used was the average for the last quarter of the financial year (3,011.67p). 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. All share awards are structured as nil-cost options

on vesting.

2 Louise Smalley retired from Whitbread and stepped down from the Board on 31 August 2021. 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.

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 12,922 N/A 23-Nov-21 3,012.0

Nicholas Cadbury AIS 8,593 N/A 07-May-21 3,245.0

Louise Smalley AIS 10,300 N /A 07-May-21 3,245.0

SAYE 356 N/A 09-Aug-21 3,183.0

Key

AIS: Deferred shares awarded in prior years under the Annual Incentive Scheme.

SAYE: Options granted under the savings-related share option scheme.

Awards granted

No awards were granted during the year under the Annual Incentive Scheme. Awards were granted under the Restricted Share Plan

as follows, with the market price being 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:

Director Scheme Date of award Number of shares

Market price

(p)

Total value

(£'000)

Alison Brittain RSP 27.04.21 31,363 3,495.6 1,096

Nicholas Cadbury RSP 27.04.21 18,746 3,495.6 655

Key

RSP: Awards made under the Restricted Share Plan.

107Whitbread Annual Report and Accounts 2021/22

Financial statements Other informationStrategic report Governance

Performance metrics

The awards made under the Restricted Share Plan will vest in

2024, 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 2023/24

financial year. The award granted to Nicholas lapsed when he

left the Company.

Payments to past directors

(auditedinformation)

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.

Remuneration terms for

LouiseSmalley'sdeparture

As disclosed in last year’s report and in line with the approved

remuneration policy, the Committee elected to apply ‘good

leaver’ terms to Louise Smalley on her retirement from the

Company. In accordance with the policy: unvested deferred

share awards earned in respect of annual incentive schemes

prior to 2020/21 will vest in full on their original vesting dates;

the 2020 RSP award will vest on its original vesting date,

subject to the assessment of the underpins at that time, and will

be pro-rated based on service during the performance period;

and Louise was eligible to participate in the 2021/22 Annual

Incentive Scheme, with the award pro-rated for service in the

year. The terms did not include any pay in lieu of notice or

eligibility to participate in the 2021 RSP. The post-employment

shareholding requirements will apply.

Remuneration terms for

NicholasCadbury’sdeparture

Nicholas Cadbury stepped down from the Board and left the

Company on 20 March 2022.

The following information was provided on the Company’s

website in accordance with section 430 (2B) of the Companies

Act 2006. All arrangements are in line with the Company’s stated

remuneration policy approved by the shareholders atthegeneral

meeting held on 6 December 2019.

Nicholas received his salary, benefits and pension allowance as

usual until the date of leaving the Company. There was no pay

in lieu of notice. No cash payments or share awards have or will

be made in respect of either the 2020/21 or the 2021/22 annual

incentive schemes.

Share awards deferred in respect of annual incentives earned

from the 2019 and 2020 schemes will partially vest, and the

balance of unvested shares will lapse on the date of leaving,

inline with the remuneration policy. The awards made under

theRSP in 2020 and 2021 will lapse.

Chief Executive’s remuneration

Whitbread is in the hospitality business and has a large workforce

of around 36,000 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.

As noted in previous years, the Chief Executive has a high level

of variable pay, which impacts the CEO pay ratio. For 2021/22

this has led to the median pay ratio increasing from 53:1 in

2020/21 to 105:1. This is due to the outcome under the annual

incentive award being 71.4% this year whereas there was no

payout under the annual incentive last year. In future years,

when RSP awards begin to vest, the amounts vesting in the

yearwill also be included in the Chief Executive's single figure

and hence will be included 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 outlets

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.

Whitbread Annual Report and Accounts 2021/22 108

Annual Report on Remunerationcontinued

Remuneration Report continued

The table below shows how the total pay of the Chief Executive compares with our UK employees at the 25th, median and 75th percentile:

Year Method 25th percentile pay ratio Median pay ratio 75th percentile pay ratio

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 28 February 2022 (the 'snapshot date') and use the single figure methodology (salary, benefits,

annual incentive, LTIP, pension) and for the Chief Executive this is taken from the total single figure remuneration for 2021/22 on

page 102 of £2.165m.

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 vesting percentage for each year.

Year Chief Executive

Single total figure of

remuneration £’000

% of maximum annual

incentive achieved % of LTIP award vesting

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

Combined CEO remuneration for 2015/16 3,057 38.8 97.2

2014/15 Andy Harrison 4,554 86.8 100.0

2013/14 Andy Harrison 6,374 82.6 100.0

2012/13 Andy Harrison 3,432 74.9 89.8

1 Includes £3.7m from the vesting of a one-off award under the Performance Share Plan in relation to the sale of Costa. This award vested at 97.53% of maximum.

2 The % of maximum annual incentive achieved for the 2020/21 financial year was deferred until 2022 and payable in the event that Alison achieved further strategic objectives

during the 2021/22 financial year. As explained on page 88, whilst the Committee believes management have performed exceptionally well during the last two years and the

performance requirements have been fully delivered, it has been decided that the incentive will not be received and, instead, an equivalent amount is to be used to form a

welfare fund for Whitbread employees.

3 The percentage of maximum annual incentive achieved for 2021/22 disclosed in the table above reflects the annual incentive outcome after the 25% reduction has been applied,

as explained on page 88.

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 138.4% in

the year, compared with an increase of 10.5% for the Group’s

employees as a whole.

Relative importance of spend on pay

The table below compares the change in total expenditure

onemployee pay during the year to the change in dividend

payments and share buybacks.

2020/21 2021/22 % Change

Employee costs £581.5m £678.9m 16.7%

Dividends £– £– No change

Implementation of remuneration

policyin2022/23

Base salary

Alison Brittain will receive a 3% salary increase in May 2022,

inline with the general increases in pay for salaried employees

across the organisation. Hemant Patel, having recently been

appointed, will not be entitled to a salary increase in May.

Thebase salaries of the executive directors with effect from

1 May 2022 will be as follows:

Director

Base salary at

1 May 2022

£’000

Base salary at

1 May 2021

£’000

Alison Brittain 921 895

Hemant Patel 515 N /A

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 in lieu of pension.

109Whitbread Annual Report and Accounts 2021/22

Financial statements Other informationStrategic report Governance

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.

Given the increased focus from investors on ESG measures and

the recent shareholder consultation revealed a strong appetite

for ESG measures to be included, there will be a 10% allocation

to ESG. The ESG measure will be made up of the reinstatement

of WINcard Customer metrics and the introduction of Force for

Good metrics.

The measures and weightings for the 2022/23 annual incentive

are therefore as follows:

Measure Weighting

Profit performance 50%

Efficiency 20%

Strategic growth 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 2022/23 report. As signalled on page 89

ofthe 2020/21 report, the measurement of the profit target

willrevert to the usual approach.

Strategic growth objectives

Each executive director also has business objectives linked to

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. Achievement of the approved

objective outcomes has been aligned to a payment level that

would be recognised as stretch performance. The objectives

are quantifiable and linked to the business plan and future

financial performance. A summary is included below.

Alison Brittain

UK growth and optimisation to include the opening of

newhotels and an increased pipeline together with the

refurbishment of existing hotels and the continuation of

newproduct trials.

Growth of the German business to include assessment of

potential acquisitions in addition to the opening of hotels

fromthe committed pipeline.

Infrastructure and financial with the replacement reservation

system on track for pilot and property costs savings.

ESG objectives including carbon reduction accreditation.

Hemant Patel

UK growth and profitability including the optimisation of the

estate and improved RevPAR.

Growth and profitability of the German business, identifying

good returns for the next phase of German growth and a review

of the operational cost model in order to maximise long-term

margin opportunities.

Capital structure and capital allocation projects including

RCFrefinancing and reduction of pension longevity risk

througha buyin together with the identification of network

optimisation opportunities.

Group projects including financial management of the

replacement reservation system and a major networks upgrade.

ESG

The 10% allocation to ESG measures will be split between:

› Force for Good (Reduction in carbon emissions and diversity

in our senior leadership population);

› WINcard Customer (Premier Inn Satisfaction and Restaurants

satisfaction)

› The targets for the ESG measures 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 2022/23 report.

Cash awards will be made in May 2023, with deferred equity

issued in April or May 2023 and due to vest in 2026, with no

further performance conditions applying.

Whitbread Annual Report and Accounts 2021/22 110

Annual Report on Remunerationcontinued

Remuneration Report continued

Restricted Share Plan

It is anticipated that the executive directors will receive awards

under the RSP in April or May 2022. These will be based on 125%

of salary for Alison Brittain 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 2025, after

which they will be subject to a two-year holding period.

The first of the underpins will be 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 will be a cumulative cost efficiency saving

of £60m over the three-year performance period.

In setting this underpin, the Committee is conscious that the

environment remains highly unpredictable. Under the plan rules

and approved policy, the Committee may amend an underpin

ifit is no longer suitable, so long as the new condition is not

materially easier or more difficult to achieve than when the

award was initially granted. It would be our intention to monitor

changes in the external environment and their effect on this

underpin, and to consider adjustment if the Committee judges

that the underpin is no longer operating as intended.

Chairman’s fee

The Chairman received a 3% increase in his fee with effect

from1 March 2022, taking his annual fee to £420,250.

Non-executive director fees

The base annual fee for non-executive directors increased on

1 March 2022 by 3% to £64,300. The fees for the chairmanship

ofthe Audit Committee and the Remuneration Committee

wereincreased to £20,600. The fee for the Senior Independent

Director increased to £15,450 and the fees for membership of

theAudit and Remuneration Committees increased to £5,150.

Statement of shareholder voting

The advisory resolution to approve the 2020/21 annual report

onremuneration was put to shareholders for approval at the

2021AGM and the resolution was passed. At a General Meeting

inDecember 2019, the current remuneration policy was put to

avote by shareholders and was also passed.

The voting results were as follows:

Resolution For Against Total Withheld

Annual

reporton

remuneration

72,249,099

(64.25%)

40,192,388

(35.75%)

112,441,487 23,841,439

Directors'

remuneration

policy

64,495,817

(70.5%)

27,038,317

(29.5%)

91,534,134 178,635

111

Whitbread Annual Report and Accounts 2021/22

Financial statements Other informationStrategic report Governance

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.

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 107.

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 3 March 2022.

Results and dividends

Group adjusted loss before tax (£16 million)

Group profit before tax £58 million

Recommended final dividend per share 34.7p

Details on the Group’s dividend policy can be found on

page31 in the Chief Financial Officer’s review.

Subject to approval at the AGM, the final dividend will be

payable on 1 July 2022 to the shareholders on the register

atthe close of business on 27 May 2022.

The Board

Board of Directors

The directors at the date of this report are listed on pages68

and 69. Kal Atwal and Fumbi Chima were appointed tothe

Board as non-executive directors from 1stMarch 2021 and

Louise Smalley resigned from the Boardon 31st August 2021.

Hemant Patel was appointed to the Board on 21 March 2022.

Details of directors’ training are given in the corporate

governance report on pages 73 to 74.

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 98, along with the effective

dates of the letters of appointment of the Chairman and the

non-executive directors.

Whitbread Annual Report and Accounts 2021/22 112

Directors’ Report

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;

and

› 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 2022 AGM. The Company did

notpurchase and of its own shares during the year. At

3 March2022 12.5 million shares were held as treasury shares

(25 February 2021: 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

% of issued

share capital

Aberdeen Asset Management 9,155,869 4.99%

BlackRock, inc 9,105,321 6.76%

Longview Partners 9,046,346 4.48%

MFS Investment Management 8,855,756 4.82%

Vulcan Value Partners LLC 6,698,606 4.98%

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.

No changes to the above have been disclosed to the Company

in accordance with Rule 5 of the Disclosure and Transparency

Rules between the end of the financial year and 27 April 2022.

113Whitbread Annual Report and Accounts 2021/22

Financial statements Other informationStrategic report Governance

2021/22 2020/21

Source of emissions Scope UK

Rest of

theworld Total UK

Rest of

theworld Total

Total %

change

Gas (T CO

e) Scope 1 46,770 2,155 48,925 35,954 590 36,544 33.9%

LPG (T CO

e) Scope 1 2,221 – 2,221 2,594 – 2,594 -14.4%

Fuel oil (T CO

e) Scope 1 – – – – – – 0.0%

F-gas (T CO

e) Scope 1 7,098 – 7,098 3,921 – 3,921 81.0%

Fleet mileage (T CO

e) Scope 1 5,338 133 5,471 3,110 85 3,195 71.2%

Electricity and district heating

(locationbased) (T CO

e) Scope 2 67,143 6,525 73,669 51,509 3,483 54,992 34%

Electricity and district heating

(marketbased) (T CO

e) Scope 2 2,777 3,238 6,014 2,711 2,114 4,825 24.7%

Gross emissions (locationbased) 128,570 8,814 137,384 97,088 4,157 101,245 35.7%

Gross emissions (marketbased) 64,203 5,526 69,730 48,290 2,789 51,079 36.5%

Floor area (m2) 2,616,379 124,362 2,740,741 2,516,989 68,821 2,585,810 6.0%

Tonnes carbon per m

floor area

(locationbased) – – 0.0501 – – 0.0392 28.0%

Tonnes carbon per m

floor area

(marketbased) – – 0.0254 – – 0.0198 28.5%

Gas (kWh) 255,349,480 11,766,080 267,115,560 195,542,009 3,205,701 198,747,710 34.4.%

LPG (kWh) 9,645,034 0 9,645,034 11,263,465 – 11,263,465 -14.4%

Fuel oil (kWh) – – – – – –

Fleet mileage (kWh) 21,732,565 461,275 22,193,840 12,237,601 333,754 12,571,355 76.5%

Electricity, district heating

andEV charging (kWh) 316,220,832 28,462,624 344683,455 220,932,960 13,272,101 234,205,061 47.2%

Self-generated electricity

viasolar PV (kWh) 4,365,016 – 4,365,016 4,406,461 – 4,406,461 -0.9%

Total (kWh) 607,312,926 40,689,979 648,002,905 444,382,496 16,811,556 461,194,052 40.5%

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

e for our Scope 1 (direct) and Scope 2 (indirect)

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

e from business owned vehicles which

includes company cars and food logistics vehicles as we own

the lease arrangements. CO

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 2020/21 we continued our strong track record on the energy

efficiency of our estate, with a focus around utilising our

remote BMS control to allow us to achieve reductions without

the need to visit sites. Through this control we reduced the

runtime of assets in unoccupied sites, saving energy whilst

also extending the lifecycle of the assets. In addition, we

utilised our energy management software throughout the year

during both trading and non-trading periods to monitor and

target sites to optimise energy consumption. 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.

In 2021/22 we were again impacted by lockdowns due to

COVID-19 across our estates, with a national lockdown closing

sites from March 2021 and a staggered re-opening with the

majority of properties open by May 2021. We saw further

closures over the Christmas period in 2021. Throughout

2021/22 we continued to implement the energy efficiency

measures from the previous year as outlined above (BMS

control and the use of energy management software).

In 2021/22, where possible, we have again worked to

implement new technologies. For example, we have continued

the replacement of grills to a more energy efficient version,

this year installing 150 new grills across 103 sites, bringing the

total of new grills to 520 since we started this project in 2018.

This project has seen an overall 50% gas reduction in our

chargrills. We also worked with an external partner to add an

energy saving additive to 502 boilers across 400 of our

restaurant sites. Year-on-year savings on some sites has

already shown up to 10% reduction on gas use over winter.

Wealso utilised refurbishment projects to reduce energy

consumption, for example through upgrading lighting to LED’s.

Whitbread Annual Report and Accounts 2021/22 114

Directors’ report continued

Recommendation Where we’ve covered the recommendation in the TCFD disclosure

Governance: Disclose the organisation’s governance around climate-related risks and opportunities. TCFD

Report

page

Describe the board’s oversight of

climate-related risks and opportunities.

The Governance section describes the Board’s oversight of climate-related

issues including the frequency by which the Board and other forums meet

toconsider these issues; and how it considers and implements, and monitors

progress against goals and targets.

Describe management’s role in assessing

and managing climate-related risks and

opportunities.

The Governance and Risk Management sections describe management’s

rolein the assessment and management of climate-related issues including

assignment of climate-related responsibilities; the associated organisational

structure(s); processes by which management is informed about climate-

related issues; and how management monitors climate-related issues.

20-22

Strategy: Disclose the actual and potential impacts of climate-related risks and opportunities on the organisation’s businesses,

strategy, and financial planning where such information is material.

Page(s)

Describe the climate-related risks and

opportunities the organisation has

identified over the short, medium,

andlong term.

The Strategy section sets out what Whitbread considers to be the relevant

short, medium, and long-term time horizons, together with a description of

the specific climate-related issues potentially arising and associated potential

financial impact on the organisation. A description of the principal risks and

opportunities is also set out in the Strategy section.

The process(es) used to determine which risks and opportunities could

havea material financial impact on the organisation are set out in the Risk

Management section.

Describe the impact of climate-related

risks and opportunities on the

organisation’s businesses, strategy,

andfinancial planning.

Within the Strategy section, Whitbread describes how climate-related issues

serve as an input to its financial planning process, the time period(s) used,

and how these risks and opportunities are prioritised.

Climate-related scenarios were used to inform the strategy and financial

planning, and such scenarios have been described in the Risk

Managementsection.

6-18

Describe the resilience of the

organisation’s strategy, taking

intoconsideration different

climate-related scenarios,

includinga2°C or lower scenario.

In the Strategy section, Whitbread has described how resilient its strategies

are to climate-related risks and opportunities.

6-18

Describe the organisation’s processes

foridentifying and assessing climate-

related risks.

In the Risk Management section, Whitbread describes its risk management

processes for identifying and assessing climate-related risks, including how

itdetermines the relative significance of climate-related risks.

6-18

Risk Management: Disclose how the organisation identifies, assesses, and manages climate-related risks. Page(s)

Describe the organisation’s processes

formanaging climate-related risks.

In the Risk Management section, Whitbread describes its processes for

managing climate-related risks, including how it makes decisions to mitigate,

transfer, accept, or control those risks.

23-26

Describe how processes for identifying,

assessing, and managing climate-related

risks are integrated into the organisation’s

overall risk management.

In the Risk Management section, Whitbread sets out how its processes for

identifying, assessing and managing climate-related risks are integrated into

its overall risk management.

23-26

Metrics & Targets: Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where

such information is material.

Page(s)

Disclose the metrics used by the

organisation to assess climate-related

risks and opportunities in line with its

strategy and risk management process.

Within the Metrics & Targets section, Whitbread has disclosed the key metrics

it uses to measure and manage climate-related risks and opportunities.

27-30

Disclose Scope 1, Scope 2, and, if

appropriate, Scope 3 greenhouse gas

(GHG) emissions, and the related risks.

Within the Metrics & Targets section, Whitbread has provided its Scope 1,

Scope 2 and Scope 3 GHG emissions and the related risks.

Describe the targets used by the

organisation to manage climate-related

risks and opportunities and performance

against targets.

Within the Metrics & Targets section, Whitbread has described its key

climate-related targets, in line with anticipated regulatory requirements,

market constraints and/or other goals.

27-30

Taskforce on Climate-Related Financial Disclosures

Whitbread PLC has complied with the requirements of LR 9.8.6R

by including climate-related financial disclosures consistent with

the TCFD recommendations and recommended disclosures. This

table outlines where in the body of the full report the specific

detail can be found in response to each recommendation.

Whitbread’s full climate-related financial disclosure is set out in a

separate document entitled ‘Task Force on Climate-Related Financial

Disclosures – Whitbread PLC’ which can be found on our website

www.whitbread.co.uk. It has been published as a separate document

in order to provide its own context, impact and reporting specific to

the key risks and opportunities that have been identified within it.

115

Whitbread Annual Report and Accounts 2021/22

Financial statements Other informationStrategic report Governance

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61

Financial risk management

objectives and policies

Financial statements,

Note24, page 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 51 to 54

Conflicts of interest Corporate governance

report, page 74

Statement of capitalised interest Financial statements,

Note8, page 155

Long-term incentive schemes Remuneration report,

pages87 to 111

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 51 to 54.

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 36 to 49.

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.

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 page 65.

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.

Whitbread Annual Report and Accounts 2021/22 116

Directors’ report continued

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.

Significant agreements

The Company’s facility, bond and private placement loan notes

agreements, details of which can be found in Note 25 to the

accounts, contain provisions entitling the counterparties to

exercise termination or other rights in the event of a change

ofcontrol of the Company.

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 2022 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 61. 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 30 to 33.

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 61.

Annual general meeting

The AGM will be held at on 15 June 2022 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 27 April 2022 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

117Whitbread Annual Report and Accounts 2021/22

Financial statements Other informationStrategic report Governance

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 Financial Reporting Standard 101 Reduced

Disclosure Framework 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 27 April 2022 and is signed on its behalf by:

By order of the Board

Alison Brittain

Chief Executive

Hemant Patel

Chief Financial Officer

Whitbread Annual Report and Accounts 2021/22 118

DIRECTORS’ RESPONSIBILITY STATEMENT

Corporate Governance continued

The nature of the assurance

This is a report by Corporate Citizenship for the Management

ofWhitbread.

Corporate Citizenship has undertaken limited assurance of

certain selected environmental and sustainability performance

data against HM Government Environmental Reporting

Guidelines (March 2019), the GHG Protocol Corporate

Accounting and Reporting Standard (2015) and the GRI

Principles of Accuracy, Clarity, Comparability, Completeness,

Timeliness and Verifiability, as described below:

Pillar Target Statements to Assure

Opportunity More diversity in leadership population

with 8% ethnic minority and 40% female

representation in our top 100 by the end

of 2023

Progress against targets in FY21/22 – we have 41.67% female

representation and 4.8% ethnic minority representation in

ourleadership population as of 28th February 2022.

(Leadershipcommunity is defined by all roles at grades

C20+thatare UK based)

Through our apprenticeship programmes

we will support people to find and develop

their hospitality careers

274 of our teams have completed their apprenticeships this year

(2021/22)

Community For every new site we will donate

ourtimeto actively supporting local

community activity

200 hours donated to local communities through new site openings

784 new team members join Whitbread directly though New Sites

Opening this year/We created 784 new jobs through new site

openings this year

Raise £20m for GOSH Charity, raise £3m

each year for our charity partner

We raised £1.7 million in 21/22, creating a total amount of £20

million raised throughout our partnership with GOSH Charity. We

started our partnership in 2012.

Public Health England 20% Sugar Reduction This year we have reduced the sugar in our Beefeater and Brewer’s

Fayre puddings by 5.8% and 11% respectively against a baseline of

2015 as part of the Office for Health Improvement and Disparities

sugar reduction programme.

Responsibility Whitbread’s critical commodities

accredited against robust standards

We were thrilled to have reached our whole shell egg target

(100%cage free status on all whole shell eggs by the end of 2020)

two years early

We are working hard to meet our ingredient egg target by 2025

with 52.6% of our 2021/22 ingredient egg requirement sourced

from cage free hens* (*for UK sites only).

100% of our raw beef range in the UK is produced to a recognised

farm assurance scheme in its country of origin such as Red Tractor.

Our Business Benchmark on Farm Animal Welfare (BBFAW) 2021

was tier 3 rating

In 2020 we became the first UK budget hotel chain to become

members of Better Cotton (formally ‘The Better Cotton Initiative’)

In collaboration with our laundry suppliers and Better Cotton we

have begun to develop new ways of working to deliver sustainable

cotton for rented linen, which the hospitality industry relies on. In

2021, with one of our hotel laundry suppliers alone, we achieved

76% of the cotton in replenished hotel laundry sourced as more

sustainable cotton, through Better Cotton; an ISEAL accredited

standard system.

For our guest buys the bed sales 15% of the cotton in 2021, was

sourced as more sustainable cotton, through Better Cotton too.

This year we became RSPO (Roundtable Sustainable Palm Oil)

supply chain certified. This means we now have certified processes

and systems to maintain the chain of custody of certified Palm Oil

in our organisation.

We are the first pub or hotel group to have this certification.

100% of our suppliers risk assessed

againstForce for Good criteria

100% of our supplier are risk assessed.

We will cut food waste by 50% by 2030 32.34% reduction from our 2018 baseline year

621,988 meals donated to charity

We will become Net Zero for carbon

emissions by 2040

50.07% Scope 1 and 2 intensity reduction from our 2016/17

baseline year

We will not send any waste to landfill 99.91% of our operational waste diverted from landfill

119Whitbread Annual Report and Accounts 2021/22

Financial statements Other informationStrategic report Governance

ASSURANCE STATEM ENT

Whitbread Annual Report and Accounts 2021/22 120

Whitbread is entirely and solely responsible for the production

and publication of the data assured, Corporate Citizenship for

its assurance.

This engagement was performed in accordance with the

International Standard on Assurance Engagement (ISAE)

3000(Assurance Engagements other than Audits or Reviews

ofHistorical Financial Information) and the relevant subject-

matter specific ISAE for GHG data (ISAE 3410, Assurance

Engagements on Greenhouse Gas Statements).

GHG quantification is subject to inherent uncertainty due to

factors such as incomplete scientific knowledge about the

global warming potential of different GHGs and uncertainty

around the models and parameters used in estimating

GHGemissions.

Corporate Citizenship has complied with the requirements

forindependence, professional ethics and quality control

asstipulated by ISAE 3000 (2020) Requirement 3a and 3b.

Assurance work performed

The assurance work was commissioned in August 2021 and

wascompleted on 7 April 2022. Detailed records were kept

ofmeetings and correspondence relating to the assurance.

Ateam of four, led by a Director, undertook the assurance

andcommentary process. An assurance specialist director

actedas adviser to the group.

The assurance engagement was undertaken to a limited level,

and involved the following activities:

› A review of underlying data sources and substantiating

evidence to support this year’s reporting, to assess

robustness of monitoring and reporting systems;

› A review of the activity data for energy (process, building

andcompany vehicles), travel, water and waste;

› A review of year-on-year performance trends to identify

anysignificant changes in operational eco-efficiency and

investigate the reasons behind these trends;

› A review of GHG calculations for accuracy and consistency

with best practice guidelines;

› A review of the data collation tools and processes for

charitable donations, sustainable sourcing of key

commodities, human rights assessments and waste;

› A review of the calculation methodologies behind

Whitbread’s market-based Scope 2 emissions, including

evidence of renewable electricity purchases;

› A review of data consolidation and aggregation;

› A review of group reporting to check for errors or omissions

in data analysis, consistency with underlying data sets and

reasonableness of reporting.

Independence

We have worked with Whitbread since 2002 and have provided

assurance since 2007. During 2021/2022, except as noted below,

our work with Whitbread focused on assurance, assistance with

developing Whitbread’s Task Force on Climate-related Financial

Disclosures and the S&P Global Corporate Sustainability

Assessment (DJSI).

Conclusion

Based on the scope of work and assurance procedures

performed, nothing has come to our attention that causes us

tobelieve that the selected environmental and sustainability

performance data is not prepared, in all material respects,

inaccordance with the HM Government Environmental

Reporting Guidelines (March 2019), the GHG Protocol

CorporateAccounting and Reporting Standard (2015)

andtheGRI Principles of Accuracy, Clarity, Comparability,

Completeness, Timeliness and Verifiability.

Corporate Citizenship Limited

London

7 April 2022

Assurance statement continued

Corporate Governance continued

REPORT ON THE AUDIT OF THEFINANCIALSTATEMENTS

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 3 March 2022 and of the Group’s profit for

the53weeks 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 related Notes to the consolidated financial statements 1 to 35, including the accounting policies; and

› 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 Generally

Accepted Accounting Practice, including Financial Reporting Standard 101 “Reduced Disclosure Framework”.

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.

INDEPENDENT AUDITOR’S REPORT TO

THEMEMBERS OF WHITBREAD PLC

121Whitbread Annual Report and Accounts 2021/22

Governance Other informationStrategic report Financial statements

3. Summary of our audit approach

KEY AUDIT

MATTERS

The key audit matters that we identified in the current year were:

› Impairment and impairment reversals of property, plant and equipment and right-of-use assets; and

› Recognition of UK and Germany government grants.

Within this report, key audit matters are identified as follows:

Newly identified

Increased level of risk

Similar level of risk

Decreased level of risk

MATERIALITY The materiality that we used for the Group financial statements was £16.0 million (2021: £16.0 million)

which was determined on the basis of 0.38% (2021: 0.42%) of net assets.

SCOPING We focused our Group audit scope primarily on all significant trading entities at Premier Inn in the UK

andthe Group head office, with specified audit procedures performed for the Germany business.

These locations represent the principal business units and account for 97% of the Group’s revenues

and92% of the Group’s net assets.

SIGNIFICANT

CHANGES IN OUR

APPROACH

The following changes have been made to our approach for the following key audit matters:

› Impairment and impairment reversals of property, plant and equipment and right-of-use assets –

Therecontinues to be significant judgement and complexity in the cash flow forecasting required

forthe impairment reviews required under IAS 36 Impairment of Assets. Given the recovery of

demand in the industry during the period, we have extended the scope of our work to include the

appropriateness of any potential reversal of impairments on previously impaired sites.

› 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, through the Coronavirus Job Retention Scheme. In the current period we have extended the

scope of work to include government grants received in Germany as well as the UK.

Our 2021/22 audit report no longer includes the following as key audit matters:

› Going concern – Due to the continued market recovery during the period, we do not consider the

assessment of the use of the going concern basis of accounting to be as complex for the current

periodcompared to the prior period.

› Impairment of goodwill relating to the Germany cash generating unit – The full goodwill amount relating

to the Germany cash generating unit was impaired in the prior period and therefore is not considered

relevant for the current period.

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 consideration of the following matters:

› obtained confirmation of the financing facilities including nature of facilities, repayment terms and covenants;

› assessed the reasonableness of the assumptions used in management’s three-year business plans including the base case

scenario, severe but plausible scenario, and reverse stress test scenario;

› 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 management’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.

Independent Auditor’s Report to theMembers Of Whitbread Plc continued

Whitbread Annual Report and Accounts 2021/22 122

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 £4,227.1 million (2021: £4,234.7 million) of Property,

plant and equipment and £3,267.6 million (2021: £2,738.4 million) of Right-of-use assets at 3 March 2022.

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, an impairment of £97.9 million was

recognised as a result of the expected impact of the COVID-19 pandemic on short-term and longer term

cash flows, which are key assumptions in the impairment assessment.

In the current year, there continues to be significant judgement and complexity in the cash flow forecasting

given the ongoing impact of the COVID-19 pandemic. The recovery of cash flow forecasts across some sites

during the year means the Group is also required to consider if any reversal of impairment losses previously

recognised is required. In the current year, the Group has recognised an impairment of £10.5 million as well

as impairment reversals of £52.5 million.

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 trading outlet;

› Calculation of the appropriate discount and long-term growth rates;

› Estimates of future trading earnings and cash flow projections, including the recovery profile post COVID-19;

› Assessing the future growth profile of sites which have not yet reached maturity;

› 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.

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Governance Other informationStrategic report Financial statements

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 key controls relating to the impairment review process and

determination of cash flow forecasts;

› Challenged 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 input from 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 in conjunction with 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, external market data (such as industry

forecasts); we worked with our industry specialists to help inform our challenge, particularly focusing on

the expected recovery for FY23 as COVID-19 restrictions are eased, and longer term expectations;

› Performed testing on a sample of sites where impairment had been recognised, sites where impairment

had been indicators 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

challenged the appropriateness of Group-wide forecasts being applied;

› Assessed the sensitivity analysis performed by management and challenged how this correlated with

thedownside scenarios modelled by the Board (consistent with the going concern assessment); 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.

Independent Auditor’s Report to theMembers Of Whitbread Plc continued

Whitbread Annual Report and Accounts 2021/22 124

5.2. Recognition of UK and Germany government grants

KEY AUDIT

MATTER

DESCRIPTION

As described in Note 9 (Government grants and assistance), during the year, the Group received

government support designed to mitigate the impact of COVID-19.

In the UK, the Government has provided funding towards the salary costs of employees who have been

furloughed through the Coronavirus Job Retention Scheme (“CJRS”). In Germany, the Government has

provided reimbursement of eligible fixed costs incurred by entities impacted by COVID-19 through the

Corona Bridging Aid for Small and Medium-Sized Enterprises.

This government funding meets the definition of a government grant under IAS 20 Government Grants

anda total of £113.8 million (2021: £153.4 million) has been recorded within Other Income.

IAS 20 requires that government grants, including non-monetary grants at fair value, shall not be

recogniseduntil there is reasonable assurance that:

(a) the entity will comply with the conditions attaching to them; and

(b) the grants will be received.

The application of the rules of both the UK and Germany government funding schemes is complex.

Additionally there is a risk that income is not recorded in the correct period (when the IAS 20

recognitioncriteria is met). Management has engaged external advisors to review a sample of the UK

submitted claims to assess the accuracy of the calculations and the application of the scheme rules.

Under IAS 20, there is a choice to account for the grant as Other Income or net of costs.

Management hasconcluded that the clearest presentation is as Other Income.

Furthermore, as described in the Audit Committee report on page 81 and the Accounting Policies

(Note2),the classification and presentation of income and costs as Adjusting items in the Income Statement

(to derive ‘Adjusted profit before tax’ and other adjusted measures) is a judgement and not a requirement

of IFRS. Judgement is exercised by management in determining the classification of items as adjusting.

Management has determined that the government grants do not meet the definition of an adjusting item on

the basis that the funding is compensation for costs that form part of the normal operations of the business.

Similarly, the costs for which the government grants compensate have not been classified as adjusting and

therefore the related income has not been classified as an adjusting item.

We consider the recognition of UK and Germany government grants to be a key audit matter.

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 in place and the process that management followed

incalculating, accounting for and presenting the government grants;

› In understanding the process, reviewed the external advisor’s reports and evaluated any observations

from the reports and management’s responses to them;

› With input from our specialists, selected a sample of models used to determine the grant claims and

challenged the approach to calculating claims and the application of the scheme rules;

› With input from our specialists, recalculated a sample of claims to assess whether eligibility conditions

have been met and the calculations are accurate;

› Traced a sample of claims to underlying payroll records and traced all cash received to support;

› Reviewed correspondence between management and the relevant government authorities;

› Assessed whether the disclosures are in line with IAS 20 Government Grants requirements;

› Challenged management on the judgement exercised in classifying the government grant income

asanon-adjusting item; and

› Evaluated the status of claims spanning the year-end including assessing the likelihood of challenge

forclaims not yet formally approved, in order to determine whether these have been accounted for

correctly as at 3 March 2022.

KEY

OBSERVATIONS

Where management has applied judgement in the interpretation of the scheme rules, we are satisfied that

the judgments are reasonable. We consider the accounting for balances at the balance sheet date to be

reasonable. We are satisfied that the recognition of UK and Germany government grants is appropriate.

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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 £16.0 million (2021: £16.0 million) £13.6 million (2021: £6.4 million)

BASIS FOR

DETERMINING

MATERIALITY

We have determined materiality to be

£16.0million,which represents 0.38%

(2021:0.42%) of net assets.

The approach is consistent with the prior year.

Materiality was determined on the basis of the

Parent Company’s net assets. This was then

capped at 85% (2021: 40%) of Group materiality.

The increase in the cap was due to decreased

complexity and uncertainty associated with the

impact of the COVID-19 pandemic, compared

tothe prior year.

RATIONALE FOR

THE BENCHMARK

APPLIED

In determining our benchmark for materiality

weconsidered the impact of COVID-19 on the

financial performance and position of the Group

inthe current year, as well as the focus of the

usersof the financial statements.

After due consideration, we determined that

netassets was the most appropriate benchmark

touse, consistent with the prior year.

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

onthebasis of net assets for the current year.

Group materiality

Net assets

Net assets £4,119m

Group materiality £16m

Component

materiality range £6m to £15m

Audit Committee

reporting threshold £0.8m

Independent Auditor’s Report to theMembers Of Whitbread Plc continued

Whitbread Annual Report and Accounts 2021/22 126

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% (2021: 65%) of Group materiality 70% (2021: 65%) of Parent Company materiality

BASIS AND

RATIONALE FOR

DETERMINING

PERFORMANCE

MATERIALITY

In determining performance materiality for both the Group and the Parent Company, we considered

thefollowing factors:

– Our risk assessment, including our assessment of the Group’s overall control environment;

– Our cumulative knowledge of the Group, including the nature, quantum and volume of corrected and

uncorrected misstatements in prior periods; and

– The decreased complexity and uncertainty associated with the impact of the COVID-19 pandemic

onthefinancial statements compared to the prior year.

6.3. Error reporting threshold

We agreed with the Audit Committee that we would report to the Committee all audit differences in excess of £0.8 million

(2021: £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.

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 in the Germany business. This work was performed by the Group

auditteam, with the assistance of component auditors in Germany.

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.

Net assets

Specified audit

procedures 7%

Review at

group level 1%

Full audit scope 92%

Revenue

Review at

group level 3%

Full audit scope 97%

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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.

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 (such as 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

control 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. Where control deficiencies were identified during our

testing, we were able to identify and test mitigating controls. 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.

As described on page 81 of the Audit Committee report, during the year management presented a review to the Committee

of the controls over the processes for determining the valuation of deferred tax assets and liabilities. This included a review

of controls implemented during the year as well as plans to embed further enhancements in the wider tax processes during

the coming year. We performed walkthrough procedures to determine whether the controls implemented in the year were

effectively designed.

7.3. Our consideration of climate-related risks

As described on pages 48 and 49, the Group has assessed the risks and opportunities associated with various future climate-

related scenarios. The Group’s full TCFD 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 (disclosed in Note 2 to the financial

statements) that there is no material impact on the financial performance and position of the Group. We also read the full TCFD

report to consider whether it is materiality consistent with the financial statements and our knowledge obtained in the audit.

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 specific procedures 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, being the strategic reports on pages 2 to 61 and

the governance reports on pages 62 to 118, 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 this regard.

Independent Auditor’s Report to theMembers Of Whitbread Plc continued

Whitbread Annual Report and Accounts 2021/22 128

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;

› 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; and

› the matters discussed among the audit engagement team, component audit team and relevant internal specialists, including

tax, valuations, pensions, IT, financial instrument and industry specialists regarding how and where fraud might occur in the

financial statements and any potential indicators of fraud.

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 areas: 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, the Listing Rules,

UK corporate governance legislation, pension legislation and UK and overseas tax legislation, including that associated with

government support schemes available as a result of COVID-19.

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.

129Whitbread Annual Report and Accounts 2021/22

Governance Other informationStrategic report Financial statements

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 key audit matters related to the potential risk of fraud. The key audit matters section of our report

explains the matters in more detail and also describes the specific procedures we performed in response to those key

audit matters.

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 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 remained alert to any indications of fraud or non-compliance with laws and regulations

throughout the audit.

Report on other legal and regulatory requirements

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 117;

› 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 61;

› the directors’ statement on fair, balanced and understandable set out on page 74;

› the Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on page 81;

› the section of the annual report that describes the review of effectiveness of risk management and internal control

systems set out on page 81; and

› the section describing the work of the Audit Committee set out on page 80.

Independent Auditor’s Report to theMembers Of Whitbread Plc continued

Whitbread Annual Report and Accounts 2021/22 130

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 this regard.

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 this regard.

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 21 June 2015 to audit the

financial statements for the year ended 3 March 2016 and subsequent financial periods. The period of total uninterrupted

engagement including previous renewals and reappointments of the firm is seven years, covering the years ending 3 March

2016 to 3 March 2022.

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

27 April 2022

131

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Governance Other informationStrategic report Financial statements

Contents

133 Consolidated income statement

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 2021/22

Whitbread Annual Report and Accounts 2021/22 132

CONSOLIDATED INCOME STATEMENT

Year ended 3 March 2022

53 weeks to 3 March 2022 52 weeks to 25 February 2021

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 1 ,703. 4 – 1 ,703 .4 58 8.9 0.5 5 8 9.4

Other income 4 122 .4 8 .7 131 . 1 161.8 6. 3 16 8.1

Operating costs 5 (1 ,671. 1) 65. 3 (1 ,605 .8) (1,231. 4) (3 5 1 .7) (1 , 5 8 3 .1)

Impairment of loans to joint ventures 16 (1 .8) – (1 . 8) – (5.8) (5.8)

OPERATING PROFIT/(LOSS) BEFORE

JOINTVENTURES 152 .9 74 . 0 226.9 (4 8 0 .7) (3 5 0 .7) (8 31 .4)

Share of profit/(loss) from joint ventures 16 0. 4 – 0.4 (6 .0) (1 .7) ( 7. 7 )

OPERATING PROFIT/(LOSS) 3 1 53.3 74 . 0 2 2 7. 3 (4 8 6 .7 ) (3 52. 4) (8 3 9.1)

Finance costs 8 (17 3.6) – (17 3.6) (1 5 3. 8) (2 1 .2) (17 5.0)

Finance income 8 4.5 – 4.5 5.4 1.3 6 .7

(LOSS)/PROFIT BEFORE TAX 3 (15 .8) 74 . 0 58. 2 (6 3 5 . 1) (372.3) ( 1 , 0 0 7. 4)

Tax credit/(expense) 10 10 .7 (26 . 4) (15 .7) 9 4.1 6.8 10 0.9

(LOSS)/PROFIT FOR THE YEAR (5.1) 47. 6 42.5 (5 41 .0) (365. 5) (906 .5)

EARNINGS PER SHARE

(Note 11)

53 weeks to 3 March 2022 52 weeks to 25 February 2021

pence pence pence pence pence pence

Basic (2 .5) 2 3.6 21 . 1 (2 8 7. 6 ) (1 9 4 .3) (4 81 .9)

Diluted (2 .5) 2 3.4 20.9 (2 8 7. 6 ) (1 9 4. 3) (4 8 1 . 9)

133Whitbread Annual Report and Accounts 2021/22

Governance Other informationStrategic report Financial statements

CONSOLIDATED STATEMENT OF

COMPREHENSIVE INCOME

Year ended 3 March 2022

Notes

53 weeks

to 3 March

2022

£m

52 weeks to

25 February

2021

£m

PROFIT/(LOSS) FOR THE YEAR 42.5 (906 .5)

ITEMS THAT WILL NOT BE RECLASSIFIED TO THE INCOME STATEMENT:

Remeasurement gain/(loss) on defined benefit pension scheme 32 318.8 (16. 3)

Current tax on defined benefit pension scheme 10 (2 .3) 2 .7

Deferred tax on defined benefit pension scheme 10 (8 8 .0) (2. 4)

228. 5 (1 6. 0)

ITEMS THAT MAY BE RECLASSIFIED SUBSEQUENTLY TO THE INCOME STATEMENT:

Net gain on cash flow hedges 25 2.4 2.3

Deferred tax on cash flow hedges 10 (0. 5) (0 .6)

Net gain/(loss) on hedge of a net investment 25 9.0 (8 .5)

Deferred tax on net (gain)/loss on hedge of a net investment 10 (0.8) 0.8

Cost of hedging 25 2.5 –

12 .6 (6. 0)

Exchange differences on translation of foreign operations (16 .0) 1 9. 3

Deferred tax on exchange differences on translation of foreign operations 10 2 .7 (1. 5)

(13. 3) 1 7. 8

OTHER COMPREHENSIVE INCOME/(LOSS) FOR THE YEAR, NET OF TAX 2 2 7. 8 (4 . 2)

TOTAL COMPREHENSIVE INCOME/(LOSS) FOR THE YEAR, NET OF TAX 270.3 (910.7)

Whitbread Annual Report and Accounts 2021/22 134

CONSOLIDATED STATEMENT OF CHANGES

IN EQUITY

Year ended 3 March 2022

capital

(Note 27)

£m

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 27 February 2020 11 2.9 9 0.8 5 0. 2 5,8 61 .9 1 8.6 (2 ,385 .6) 3 , 74 8 . 8

Loss for the year – – – (906 .5) – – (906. 5)

Other comprehensive income – – – (16 .0) 1 0.1 1 .7 (4 . 2)

Total comprehensive income – – – (92 2 .5) 10.1 1 .7 (910.7)

Ordinary shares issued on exercise of employee

share options (Note 27) 0.1 2.8 – – – – 2.9

Ordinary shares issued on rights issue (Note 27) 5 1 .7 9 2 9. 3 – – – – 9 81 .0

Loss on ESOT shares issued – – – (6 .7) – 6 .7 –

Accrued share-based payments (Note 31) – – – 14 .0 – – 1 4.0

Tax on share-based payments – – – (1. 9) – – (1. 9)

AT 25 FEBRUARY 2021 16 4 .7 1 ,022 .9 5 0. 2 4,94 4.8 2 8 .7 (2 , 3 7 7. 2) 3,8 34 .1

Profit for the year – – – 42.5 – – 42.5

Other comprehensive income – – – 228.5 (4 . 4) 3 .7 2 27. 8

TOTAL COMPREHENSIVE INCOME – – – 271 .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) – – – 12 .9 – – 12 .9

Tax on share-based payments – – – (0. 2) – – (0.2)

AT 3 MARCH 2022 164 .8 1, 024 .7 5 0.2 5, 225. 3 24 .3 (2, 370. 3) 4 ,11 9.0

135Whitbread Annual Report and Accounts 2021/22

Governance Other informationStrategic report Financial statements

CONSOLIDATED BALANCE SHEET

At 3 March 2022

Notes

3 March

2022

£m

25 February

2021

£m

NON-CURRENT ASSETS

Intangible assets 13 1 59. 3 1 5 9.1

Right-of-use assets – property, plant and equipment 22 3 , 2 6 7. 6 2 ,7 3 8 . 4

Right-of-use assets – investment property

22 – 6 5.0

Property, plant and equipment 14 4 , 2 2 7. 1 4,213.1

Investment property 14 – 21 .6

Investment in joint ventures 16 41 .1 3 7. 3

Derivative financial instruments 25 15.8 6.6

Defined benefit pension surplus 32 522 .6 18 8 .0

8, 233. 5 7, 4 2 9 . 1

CURRENT ASSETS

Inventories 17 19.4 1 2 .1

Derivative financial instruments 25 – 8.2

Trade and other receivables 18 116 .4 74 . 2

Cash and cash equivalents 19 1 ,132 .4 1 , 25 6.0

1, 268. 2 1 ,3 5 0.5

Assets classified as held for sale 14 64.8 1 9.0

TOTAL ASSETS 9,566.5 8 ,7 9 8 . 6

CURRENT LIABILITIES

Borrowings 20 – 31 2.0

Lease liabilities 22 1 29. 3 11 2.1

Provisions 23 1 9.6 3 0.5

Derivative financial instruments 25 – 2.4

Current tax liabilities – 1.8

Trade and other payables 26 57 0.7 316.5

719. 6 775.3

NON-CURRENT LIABILITIES

Borrowings 20 991 .9 9 9 0.5

Lease liabilities 22 3, 572 . 5 3,1 1 9. 5

Provisions 23 1 1 .7 9.0

Deferred tax liabilities 10 1 50.6 4 4.6

Trade and other payables 26 1.2 25 .6

4,727.9 4,1 8 9. 2

TOTAL LIABILITIES 5 , 4 4 7. 5 4,964.5

NET ASSETS 4, 11 9.0 3, 8 3 4 .1

EQUITY

Share capital 27 164 . 8 1 6 4 .7

Share premium 28 1 ,024 .7 1,0 2 2.9

Capital redemption reserve 28 50. 2 5 0.2

Retained earnings 28 5,22 5.3 4,94 4.8

Currency translation reserve 28 24. 3 2 8 .7

Other reserves 28 (2 , 370. 3) (2,377 .2)

TOTAL EQUITY 4, 11 9.0 3, 8 3 4 .1

1 Right-of-use assets – investment property represents leasehold sites which the Group acquired on the acquisition of Foremost Hospitality Hiex GmbH which was subleased

to a third party (see Note 22).

ALISON BRITTAIN CHIEF EXECUTIVE HEMANT PATEL CHIEF FINANCIAL OFFICER 27 April 2022

Whitbread Annual Report and Accounts 2021/22 136

CONSOLIDATED CASH FLOW STATEMENT

Year ended 3 March 2022

Notes

53 weeks

to 3 March

2022

£m

52 weeks to

25 February

2021

£m

CASH GENERATED FROM/(USED IN) OPERATIONS 29 693.7 (2 2 7. 0)

Payments against provisions (1 8. 9) (24. 4)

Pension payments 32 (14 . 8) (14. 8)

Interest paid – lease liabilities 22 (133 . 2) (1 2 3.2)

Interest paid – other (20. 2) (2 2. 0)

Interest received 2.2 1.2

Corporation taxes (paid)/received (0. 1) 1 9. 1

NET CASH FLOWS FROM/(USED IN) OPERATING ACTIVITIES 50 8 .7 (3 91 . 1)

CASH FLOWS USED IN INVESTING ACTIVITIES

Purchase of property, plant and equipment and investment properties 3 (2 0 0. 4) (2 1 7. 4)

Proceeds from disposal of property, plant and equipment 56.4 2.6

Investment in intangible assets 13 (21 . 1) (10.8)

Acquisition of a subsidiary, net of cash acquired – 1 .4

Cash flows on aborted acquisition – 1.3

Payment of deferred and contingent consideration 26 (36. 3) (3.8)

Capital contributions to joint ventures 16 (1 .4) (1. 3)

Loans advanced to joint ventures 16 (1 .8) –

NET CASH FLOWS USED IN INVESTING ACTIVITIES (20 4 .6) (2 2 8 .0)

CASH FLOWS (USED IN)/FROM FINANCING ACTIVITIES

Proceeds from issue of shares on exercise of employee share options 27 1 .9 2.9

Proceeds from issue of shares on rights issue, net of fees – 9 81 .0

Drawdowns of long-term borrowings 50.0 5 96.8

Repayments of long-term borrowings (353.9) (1 2 5 .1)

Costs of long-term borrowings – (5.5)

Lease incentives received/(paid) 2.0 ( 7. 3 )

Payment of principal of lease liabilities (1 2 7. 1) (7 1 .7)

NET CASH FLOWS (USED IN)/FROM FINANCING ACTIVITIES (4 27. 1) 1,371. 1

NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS 21 (12 3. 0) 752 .0

Opening cash and cash equivalents 21 1, 256 .0 5 0 2.6

Foreign exchange differences 21 (0.6) 1.4

CLOSING CASH AND CASH EQUIVALENTS 19 1 ,132 .4 1, 2 5 6.0

137Whitbread Annual Report and Accounts 2021/22

Governance Other informationStrategic report Financial statements

1 GENERAL INFORMATION AND AUTHORISATION OF CONSOLIDATED

FINANCIALSTATEMENTS

The consolidated financial statements of Whitbread PLC for the year ended 3 March 2022 were authorised for issue by the

Board of Directors on 27 April 2022. 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 117.

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 53 weeks to 3 March 2022 (prior financial year:

52weeks to 25 February 2021).

Going concern

The Group’s and Company’s (the ‘Group’) 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 61. The financial position of the Group, its cash flows,

liquidity position and borrowing facilities are described in the financial review on pages 26 to 33. The principal risks of the

Group are set out on pages 56 to 60. In addition, Note 24 includes the Group’s financial risk management objectives, details of

its financial instruments and hedging activities, its exposure to liquidity risk and details of its capital structure.

The directors have considered these areas alongside the principal risks and how they may impact going concern. Details of the

Group’s available and drawn facilities are included in Note 20. At 3 March 2022, the Group had a cash balance of £1,132.4m with

available borrowing facilities of £1,850.0m for use in the going concern assessment, of which £1,000.0m had been drawn down.

The Group’s forecasts indicate that it will continue to have significant financial resources, continue to settle its debts as they

fall due and operate well within its covenants as outlined in Note 20 for at least a period of 12 months from the date of these

financial statements. Various downside scenarios over and above those already included in the base case have been considered

in respect of these forecasts. Under these downside scenarios, the Group can meet its liquidity requirements through available

funds and is able to meet the original covenants in place on its revolving credit facility, allowing the Group to terminate the

covenant test waiver period and be able to make a dividend payment. The Group has no further financial covenants in place.

In the event that it was necessary to access additional funding, the directors have a reasonable expectation that this could

be achieved.

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.

After due consideration of the matters set out above, the directors are satisfied that there is a reasonable expectation that the

Group has adequate resources to continue in operational existence for the foreseeable future, being at least 12 months from the

date of signing these financial statements. For this reason, they continue to adopt the going concern basis in the preparation of

these financial statements.

NOTES TO THE CONSOLIDATED

FINANCIALSTATEMENTS

At 3 March 2022

Whitbread Annual Report and Accounts 2021/22 138

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 25 February 2021, except for the

adoption of the new standards and policies applicable for the year ended 3 March 2022. The significant accounting policies

adopted are set out below.

The Group has applied the following standards and amendments for the first time for the annual reporting period commencing

26 February 2021.

Covid-19-Related Rent Concessions Beyond 30 June 2021 (Amendment to IFRS 16)

In the prior year, the Group early adopted Covid-19-Related Rent Concessions (Amendment to IFRS 16) that provided practical

relief to lessees in accounting for rent concessions occurring as a direct consequence of COVID-19, by introducing a practical

expedient to IFRS 16. This practical expedient was available to rent concessions for which any reduction in lease payments

affected payments originally due on or before 30 June 2021.

In March 2021, the Board issued Covid-19-Related Rent Concessions beyond 30 June 2021 (Amendment to IFRS 16) that

extends the practical expedient to apply to reduction in lease payments originally due on or before 30 June 2022.

The practical expedient permits a lessee to elect not to assess whether a COVID-19-related rent concession is a lease

modification. A lessee that makes this election shall account for any change in lease payments resulting from the COVID-

19-related rent concession the same way it would account for the change applying IFRS 16 if the change were not a

lease modification.

The practical expedient applies only to rent concessions occurring as a direct consequence of COVID-19 and only if all of the

following conditions are met:

a) the change in lease payments results in revised consideration for the lease that is substantially the same as, or less than, the

consideration for the lease immediately preceding the change;

b) any reduction in lease payments affects only payments originally due on or before 30 June 2022 (a rent concession meets

this condition if it results in reduced lease payments on or before 30 June 2022 and increased lease payments that extend

beyond 30 June 2022); and

c) there is no substantive change to other terms and conditions of the lease.

In the current financial year, the Group has applied the amendment to IFRS 16 (as issued by the Board in May 2021) in advance

of its effective date.

Impact of adoption

As a result of early adopting these requirements, rent deferrals which would otherwise have been treated as lease modifications

have been accounted for as if the change was not a lease modification. The adoption of the amendments had no impact on the

consolidated income statement.

Other IFRS Standards and Interpretations

In addition, the Group has also adopted Interest Rate Benchmark Reform – Phase 2 which has been assessed as having no

financial impact or disclosure at this time.

139Whitbread Annual Report and Accounts 2021/22

Governance Other informationStrategic report Financial statements

2 ACCOUNTING POLICIES CONTINUED

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 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)

› 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)

› Annual Improvements to IFRS Standards 2018-2020 Cycle.

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.

Whitbread Annual Report and Accounts 2021/22 140

Notes to the Consolidated Financial Statements continued

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.

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.

141Whitbread Annual Report and Accounts 2021/22

Governance Other informationStrategic report Financial statements

2 ACCOUNTING POLICIES CONTINUED

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 re-measured 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 the same asset

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 relates to the rights transferred to

the buyer.

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.

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.

Whitbread Annual Report and Accounts 2021/22 142

Notes to the Consolidated Financial Statements continued

2 ACCOUNTING POLICIES CONTINUED

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.

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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 programme in relation to the review of the hotel estate, excluding those relating

to financing;

› 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;

› 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 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.

Whitbread Annual Report and Accounts 2021/22 144

Notes to the Consolidated Financial Statements continued

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.

Consideration receivable from HM Revenue & Customs

Consideration received from HM Revenue & Customs under the Eat Out to Help Out Scheme was recognised within revenue

from sales of food and beverage in the year to 25 February 2021.

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 of the Group’s restaurants offer customer loyalty programmes whereby 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.

145Whitbread Annual Report and Accounts 2021/22

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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.

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. See Note 32 for further details.

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.

Whitbread Annual Report and Accounts 2021/22 146

Notes to the Consolidated Financial Statements continued

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 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.

147Whitbread Annual Report and Accounts 2021/22

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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 and foreign exchange rate risks.

Derivatives are recognised initially at fair value on the date the contract is entered into and subsequently re-measured 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 foreign currency risk and interest rate risks as

fair value hedges and 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.

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.

Whitbread Annual Report and Accounts 2021/22 148

Notes to the Consolidated Financial Statements continued

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 re-measured 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 have 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.

149Whitb read Annual Report and Accounts 2021/22

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2 ACCOUNTING POLICIES CONTINUED

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 – Goodwill, 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

Where there are indicators of impairment or reversal, management performs an impairment assessment. The speed at which

the Group’s sites will recover from the impact of the COVID-19 pandemic is uncertain and, as a result, all of the Group’s sites

have been tested for impairment.

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 actual cash flows for FY20 being

the period before the impact of the COVID-19 pandemic and applying management’s assumptions of the impact of the

pandemic and expected recovery period.

› 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.

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/(losses) from joint ventures.

Whitbread Annual Report and Accounts 2021/22 150

Notes to the Consolidated Financial Statements continued

3 SEGMENT INFORMATION CONTINUED

The following tables present revenue and profit information regarding business operating segments for the years ended

3 March 2022 and 25 February 2021.

REVENUE

Year to 3 March 2022 Year to 25 February 2021

UK &

Ireland

£m

Germany

£m

Central

andother

£m

Total

£m

UK &

Ireland

£m

Germany

£m

Central

andother

£m

Total

£m

Accommodation 1,157.8 29.1 – 1,186.9 388.5 10.2 – 398.7

Food, beverage and other items

510.4 6.1 – 516.5 188.9 1.3 – 190.2

REVENUE BEFORE ADJUSTING

ITEMS 1,668.2 35.2 – 1,703.4 5 7 7.4 11.5 – 588.9

Adjusting revenue (Note 6) – 0.5

REVENUE 1,703.4 589.4

1 Revenue from food, beverage and other items for the UK & Ireland segment includes £nil (2020/21: £12.0m) of consideration receivable from HM Revenue & Customs under

the Eat Out to Help Out Scheme.

PROFIT/(LOSS)

Year to 3 March 2022 Year to 25 February 2021

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 199.6 (15.4) (31.3) 152.9 (415.7) (38.8) (26.2) (4 80.7)

Share of profit/(loss) from joint

ventures – – 0.4 0.4 – – (6.0) (6.0)

ADJUSTED OPERATING

PROFIT/(LOSS) 199.6 (15.4) (30.9) 153.3 (415.7) (38.8) (32.2) (486.7)

Net finance costs (124.7) (8.5) (35.9) (169.1) (117.1) (6.1) (25.2) (148.4)

ADJUSTED PROFIT/(LOSS)

BEFORE TAX 74.9 (23.9) (66.8) (15.8) (532.8) (44.9) (5 7. 4) (635.1)

Adjusting items before tax (Note6) 74.0 (372.3)

PROFIT/(LOSS) BEFORE TAX 58.2 (1 , 0 07.4 )

Adjusted operating profit/(loss) for the UK & Ireland segment includes the impact of Business Rates Relief provided

by the UK Government of £56.3m (2020/21: £117.8m), income from Hospitality and Leisure Grant provided by the UK

Government of £8.2m (2020/21: £3.5m) and income from the job retention schemes in the UK, Ireland and Jersey of £62.0m

(2020/21: £139.0m). Adjusted operating loss for the German segment includes £1.0m (2020/21: £1.5m) from the Kurzarbeit

scheme and other Government grants of £43.3m (2020/21: £10.3m).

OTHER SEGMENT INFORMATION

Year to 3 March 2022 Year to 25 February 2021

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 148.1 52.3 – 200.4 121.0 96.4 – 217. 4

Property, plant and equipment

and investment property –

accruals basis (Note 14) 165.8 54.2 – 220.0 105.9 93.2 – 199.1

Intangible assets (Note 13) 21.1 – – 21.1 10.8 – – 10.8

Cash outflows from lease interest

and payment of principal of lease

liabilities 234.5 25.8 – 260.3 173.0 21.9 – 194.9

Depreciation – property, plant

and equipment and investment

property (Note 14) 148.3 9.6 – 1 57.9 145.2 5.1 – 150.3

Depreciation – right-of-use assets

(Note 22) 125.2 22.9 – 148.1 109.9 16.4 – 126.3

Amortisation (Note 13) 20.6 0.3 – 20.9 23.3 0.3 – 23.6

151Whitbread Annual Report and Accounts 2021/22

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3 SEGMENT INFORMATION CONTINUED

Segment assets and liabilities are not disclosed because they are not reported to, or reviewed by, the Chief Operating

Decision Maker.

Revenues from external customers are split geographically as follows:

2021/22

£m

2020/21

£m

United Kingdom 1,661.8 575.5

Germany 35.2 11.5

Other 6.4 2.4

1,703.4 589.4

Non-current assets

are split geographically as follows:

2022

£m

2021

£m

United Kingdom 6,571.3 6,343.6

Germany 1,009.1 809.3

Other 114.7 81.6

7,695.1 7, 23 4 .5

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:

2021/22

£m

2020/21

£m

Rental income 7.9 7.8

Government grants (Note 9) 113.8 153.4

Other 0.7 0.6

OTHER INCOME BEFORE ADJUSTING ITEMS 122.4 161.8

Insurance proceeds (Note 6) – 1.8

VAT settlement (Note 6) 8.7 4.5

OTHER INCOME 131.1 168.1

5 OPERATING COSTS

2021/22

£m

2020/21

£m

Cost of inventories recognised as an expense

146.6 72.2

Employee benefits expense

(Note 7) 678.9 581.5

Amortisation of intangible assets (Note 13) 20.9 23.6

Depreciation – property, plant and equipment and investment property (Note 14) 157.9 150.3

Depreciation – right-of-use assets (Note 22) 148.1 126.3

Utilities 87.8 51.2

Rates 71.2 10.9

Other site property costs 277.3 158.7

Variable lease payment expense/(credit) (Note 22) 0.3 (0.6)

Net foreign exchange differences 2.1 0.4

Other operating charges

80.0 56.9

Adjusting operating costs

(Note 6) (65.3) 351.7

1,605.8 1,583.1

1 Cost of inventories recognised as an expense includes £6.1m (2020/21: £14.6m) of inventory write downs recorded during the year.

2 Adjusting operating costs includes a credit for net impairments and write offs of £36.2m (2020/21: charge of £350.4m), a credit of £28.8m (2020/21: credit of £9.0m)

relating to other operating charges and a credit of £0.3m (2020/21: charge of £10.3m) relating to employee benefit expenses (see Note 6).

Whitbread Annual Report and Accounts 2021/22 152

Notes to the Consolidated Financial Statements continued

5 OPERATING COSTS CONTINUED

Fees paid to the Group’s auditor during the year consisted of:

2021/22

£m

2020/21

£m

Audit of the Group’s financial statements 1.0 0.9

Audit of the Group’s subsidiaries 0.6 0.6

TOTAL AUDIT FEES 1.6 1.5

Audit-related assurance 0.1 0.1

Other non-audit fees

– 1.1

TOTAL NON-AUDIT FEES 0.1 1.2

INCLUDED IN OTHER OPERATING CHARGES 1.7 2.7

1 During 2020/21 the Group auditor performed permissible non-audit services in relation to the June 2020 rights issue and the issue of Green Bonds.

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.

2021/22

£m

2020/21

£m

ADJUSTING ITEMS WERE AS FOLLOWS:

Revenue:

TSA income

– 0.5

Other income:

Insurance proceeds

– 1.8

VAT settlement

8.7 4.5

ADJUSTING OTHER INCOME 8.7 6.3

Operating costs:

TSA costs

– (0.5)

Costa disposal – separation costs and other costs

– 6.4

Impairment – goodwill

– (238.8)

Net impairment reversals/(write offs) – property, plant and equipment, right-of-use assets and other

intangibleassets

36.2 (109.2)

Impairment – investment in joint ventures

– (8.2)

Guaranteed minimum pension

– (1.1)

Aborted acquisition costs

– (12.4)

UK restructuring

0.3 (12.1)

Gains on disposals, property and other provisions

28.8 18.4

ADJUSTING OPERATING COSTS 65.3 ( 3 5 7. 5 )

Share of loss of joint ventures:

Impairment

– (1.7)

Finance (costs)/income:

Early prepayment charge (Note 20)

– (21.2)

VAT settlement

– 1.3

ADJUSTING ITEMS BEFORE TAX 74.0 (372.3)

153Whitbread Annual Report and Accounts 2021/22

Governance Other informationStrategic report Financial statements

6 ADJUSTING ITEMS CONTINUED

Tax adjustments included in reported profit after tax, but excluded in arriving at adjusted profit after tax:

2021/22

£m

2020/21

£m

Tax on adjusting items (13.3) 19.3

Impact of change in tax rates (13.1) (12.5)

ADJUSTING TAX (CHARGE)/CREDIT (26.4) 6.8

1 Following the sale of Costa to The Coca-Cola Company on 3 January 2019, the Group entered into a Transitional Services Agreement (TSA) to provide certain services

to facilitate the successful separation of Costa from the rest of the Whitbread Group. The agreements ended in FY21 and the Group earned £nil (2020/21: £0.5m) during

the year.

2 During 2020/21, the Group recognised insurance claim proceeds of £1.8m in other income covering property and loss of trade in relation to a fire at asite in FY19/20.

3 In August 2021, 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.

During the prior year, the Group submitted claims to HMRC in relation to similar matters and recognised £4.5m within other income and £1.3m within finance income.

4 During 2020/21, the Group recognised a credit of £6.4m for costs the Group no longer expects to incur relating to the separation of Costa and the impact of the disposal

on the continuing business.

5 During 2020/21, the Group recorded a goodwill impairment charge of £238.8m in relation to its operations in Germany. The goodwill was recognised on the acquisition of

Foremost Hospitality Hiex GmbH which the Group entered into in the year ended 1 March 2018 and was impaired as a result of the impact of the COVID-19 pandemic on

growth rates.

6 The Group identified impairment indicators and indicators of impairment reversals relating to assets held by the Group. An impairment review of those assets was

undertaken, resulting in a net impairment reversal of £42.0m. This is made up of an impairment loss on trading sites of £10.5m (£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. Further information is provided in Note 15.

During 2020/21, a total charge of £109.2m was recorded, made up of £97.9m of impairment losses on trading sites (£61.2m relating to property, plant and equipment and

£36.7m relating to right-of-use assets), £3.9m relating to assets classified as held for sale, £1.7m relating to the cancellation of significant IT projects and £5.7m following a

review of early stage expansion projects where the Group decided not to proceed with the project.

7 During 2020/21, as a result of the COVID-19 pandemic, the Group identified impairment indicators relating to its investment in its UK joint venture, Healthy Retail Limited.

Following an impairment review, a charge of £8.2m was recorded within adjusting items. Further information is available in Note 16.

8 A High Court ruling in November 2020 confirmed that pension schemes should extend the equalisation of guaranteed minimum pension benefits for men and women to

those who transferred benefits to other plans after 1990. The cost of reflecting this decision in the obligations of the Whitbread Group defined benefit scheme in FY21 was

estimated at £1.1m, which has been recognised as a past service cost in the income statement. The treatment of this is consistent with the GMP equalisation adjustment in

FY18/19. Any future revisions to the estimate will be recognised in other comprehensive income.

9 At 27 February 2020, the Group had purchased a call option for an acquisition as part of the Group’s strategy for international growth. During 2020/21, as a result of the

COVID-19 pandemic, the Group decided not to proceed with the acquisition. An amount of £1.3m was recovered following settlement negotiations resulting in a charge of

£12.4m, including fees, being recorded in the income statement during 2020/21.

10 During 2020/21, the Group restructured its Support Centre and site operations and recognised redundancy and project costs of £12.1m. Following the completion of the

restructuring, the remaining provision of £0.3m was released to the income statement.

11 During the year, the Group disposed of a single property as part of a sale and leaseback transaction for gross proceeds of £40.0m. The Group will continue to rent the

property for a period of five years. A profit on disposal of £27.5m was recognised on disposal of the property. In addition, during the year, 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. From FY18 to FY20 the Group established a provision

for the performance of remedial work on cladding material at a small number of the Group’s sites. During 2020/21, the Group released provisions of £3.3m for costs

which were no longer expected to be incurred and received reimbursements of costs of remedial work on cladding material from property developers totalling £13.4m.

In addition, during 2020/21, the Group made a loss on disposal of £1.1m and released other provisions of £2.8m.

12 During 2020/21, the Group recorded a cost of £1.7m representing its share of a site level impairment in the accounts of its Middle East joint venture, Premier Inn Hotels LLC.

13 On 25 February 2021, the Group exercised an early repayment option associated with the Series A loan notes and Series B loan notes issued in 2017 and originally due for

repayment on 16 August 2027. As a result, an early repayment charge of £21.2m was recognised during 2020/21.

7 EMPLOYEE BENEFITS EXPENSE

2021/22

£m

2020/21

£m

Wages and salaries 621.0 531.1

Social security costs 46.7 38.9

Pension costs 11.2 11.5

678.9 581.5

The amounts above exclude adjusting items. Wages and salaries excludes a credit of £0.3m (2020/21: charge of £12.1m) relating

to the restructuring of the Group’s operations and a credit of £nil (2020/21: credit of £2.9m) relating to costs associated with

the separation of Costa. Pension costs excludes £nil (2020/21: charge of £1.1m) relating to a past service cost on the Group’s

defined benefit pension scheme (see Note 6).

Included in wages and salaries is a share-based payments expense of £12.9m (2020/21: £12.7m), which arises from transactions

accounted for as equity-settled share-based payments.

Whitbread Annual Report and Accounts 2021/22 154

Notes to the Consolidated Financial Statements continued

7 EMPLOYEE BENEFITS EXPENSE CONTINUED

Employee costs are split between hourly paid and salaried employees as below:

2021/22

£m

2020/21

£m

Employee costs – hourly paid 440.3 391.7

Employee costs – salaried 238.6 189.8

678.9 581.5

Average number of employees directly employed

2021/22

Number

2020/21

Number

UK & Ireland 33,546 32,190

Germany 782 599

34,328 32,789

Employees of joint ventures are excluded from the numbers above.

Directors’ remuneration is disclosed below:

2021/22

£m

2020/21

£m

Directors’ remuneration 3.8 3.0

Aggregate contributions to the defined contribution pension scheme – –

Aggregate gains on the exercise of share options 1.2 7. 3

2021/22

Number

2020/21

Number

Number of directors accruing benefits under defined contribution schemes 2 2

8 FINANCE (COSTS)/INCOME

2021/22

£m

2020/21

£m

FINANCE COSTS

Interest on bank loans and overdrafts (7.4) (5.3)

Interest on other loans (30.0) (24.1)

Interest on lease liabilities (Note 22) (133.2) (123.2)

Unwinding of discount on contingent consideration (Note 26) (1.4) (2.1)

Interest capitalised (Note 14) 0.9 0.9

Impact of ineffective portion of cash flow and fair value hedges and cost of hedging (Note 25) (2.5) –

(173.6) (153.8)

FINANCE INCOME

Bank interest receivable 0.7 1.2

Other interest receivable 0.2 0.8

Impact of ineffective portion of cash flow and fair value hedges (Note 25) – 0.4

IAS 19 pension finance income (Note 32) 3.6 3.0

4.5 5.4

ADJUSTED NET FINANCE COSTS (169.1) (148.4)

Adjusting net finance (costs)/income:

Early prepayment charge (Note 20) – (21.2)

VAT settlement (Note 6) – 1.3

TOTAL NET FINANCE COSTS (169.1) (168.3)

Analysed as:

Total finance costs (173.6) (175.0)

Total finance income 4.5 6.7

TOTAL NET FINANCE COSTS (169.1) (168.3)

Net finance costs includes £169.7m (2020/21: £172.9m) finance costs and £0.9m (2020/21: £2.0m) finance income in respect

offinancial assets and liabilities that are measured at amortised cost using the effective interest rate method.

155Whitbread Annual Report and Accounts 2021/22

Governance Other informationStrategic report Financial statements

9 GOVERNMENT GRANTS AND ASSISTANCE

During the year, the Group has received Government support designed to mitigate the impact of COVID-19.

Grants received during the year consisted of:

2021/22

£m

2020/21

£m

UK Coronavirus Job Retention Scheme 61.7 138.3

Ireland Employment Wage Subsidy Scheme 0.2 0.5

Jersey Co-Funded Payroll Scheme 0.1 0.2

UK Hospitality and Leisure Grant 8.2 3.5

German Fixed Cost Grant 43.3 10.3

German Kurzarbeit Scheme – compensation for social security payments 0.3 0.6

INCLUDED IN OTHER INCOME 113.8 153.4

The Group benefited from the following schemes which led to savings in operating costs:

2021/22

£m

2020/21

£m

German Kurzarbeit Scheme – employees support 0.7 0.9

UK Business Rate Relief 56.3 1 17. 8

REDUCTION IN OPERATING COSTS 57.0 118.7

In the UK, the Government has provided funding towards the salary costs of employees who have been ‘furloughed’ through

the Coronavirus Job Retention Scheme. The scheme rules have evolved during the period and remain complex to interpret

and apply to the claims. This funding meets the definition of a Government grant under IAS 20 Government Grants and a total

of £61.7m (2020/21: £138.3m) has been recorded within other income. The Group has recognised income from job retention

schemes in Ireland and Jersey totalling £0.2m and £0.1m respectively within other income (2020/21: £0.5m and £0.2m).

The related salary costs which are compensated by the scheme are included within operating costs in the consolidated

income statement.

The UK Government also provided grants to support businesses in the retail, hospitality and leisure sector who had been

impacted by closures and other restrictions. The Group has recognised £8.2m (2020/21: £3.5m) in other income relating to

these grants and no further grants are expected to be received.

In Germany, the Government has provided financial support to cover certain fixed costs incurred by companies in sectors

which have been significantly impacted by the COVID-19 pandemic and related restrictions. The Group has recognised a total

of £43.3m (2020/21: £10.3m) in relation to the schemes within other income.

The German Government also provides enhanced benefits directly to individual employees with employers partially

compensated for continued social security payments under Kurzarbeit. Support provided directly to employees reduced the

Group’s operating costs by £0.7m (2020/21: £0.9m) and a total of £0.3m (2020/21: £0.6m) was recognised in other income

relating to compensation for social security payments.

The UK Government and devolved administrations introduced business rates holidays for retail, hospitality and leisure

businesses. Relief in England ended in July 2021 and the holiday in Northern Ireland, Wales and Scotland continued until April

2022. The relief has allowed the Group to reduce operating costs by £56.3m in the year (2020/21: £117.8m).

The Group was confirmed as an eligible issuer under the UK Government’s Covid Corporate Financing Facility (CCFF) with an

initial limit of £600.0m. The limit was reduced to £300.0m following the reduction in the Group’s credit rating to BBB-. The Group

did not draw down on the facility during the year or prior to its expiry on 22 March 2021.

The UK Government announced on 8 July 2020, that a reduced rate of VAT would apply to certain supplies in the hospitality

and hotel accommodation sector and this was extended by the Budget in 2021. As a result, for the period from 15 July 2020

to 30 September 2021, the Group’s sales of accommodation, food and beverage (excluding alcohol) was charged at 5% VAT.

A new reduced rate of 12.5% was introduced from 1 October 2021 and ended on 31 March 2022. The standard VAT rate of 20%

returned on 1 April 2022.

The Group took part in the COVID-19 VAT deferral scheme, allowing it to defer VAT payments totalling £14.9m into the current

year which would ordinarily have fallen due during FY21. These have been repaid during the period.

The Group registered with the Government’s Eat Out to Help Out Scheme during August 2020, which provided Government

funding for 50% of food and non-alcoholic beverage purchases, capped at £10 per head. The Group claimed £12.0m as part of

the scheme which has been recognised as revenue in the year to 25 February 2021.

Whitbread Annual Report and Accounts 2021/22 156

Notes to the Consolidated Financial Statements continued

10 TAXATION

CONSOLIDATED INCOME STATEMENT

2021/22

£m

2020/21

£m

Current tax:

Current tax credit – (10.7)

Adjustments in respect of previous periods (1.0) 11.9

(1.0) 1.2

Deferred tax:

Origination and reversal of temporary differences 16.5 (109.4)

Effect of rate change 13.1 12.5

Adjustments in respect of previous periods (12.9) (5.2)

16.7 (102.1)

TAX REPORTED IN THE CONSOLIDATED INCOME STATEMENT 15.7 (100.9)

The adjustments in respect of prior periods arise mainly due to a reassessment of deferred tax on property, plant and equipment.

CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME

2021/22

£m

2020/21

£m

Current tax:

Defined benefit pension scheme 2.3 (2.7)

Deferred tax:

Cash flow hedges 0.5 0.6

Tax on net gain on hedge of a net investment 0.8 (0.8)

Tax on exchange differences on translation of foreign operations (2.7) 1.5

Defined benefit pension scheme 88.0 2.4

86.6 3.7

TAX REPORTED IN OTHER COMPREHENSIVE INCOME 88.9 1.0

A reconciliation of the tax (credit)/charge applicable to adjusted (loss)/profit before tax and (loss)/profit before tax at the

statutory tax rate, to the actual tax charge at the Group’s effective tax rate, for the years ended 3 March 2022 and 25 February

2021 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.

2021/22 2020/21

Tax on

adjusted

profit

£m

Tax on

profit

£m

Tax on

adjusted

profit

£m

Tax on

profit

£m

(LOSS)/PROFIT BEFORE TAX AS REPORTED IN THE CONSOLIDATED

INCOME STATEMENT (15.8) 58.2 (635.1) (1 ,0 07.4 )

Tax at current UK tax rate of 19% (2020/21: 19%) (3.0) 11.1 (120.7) (191.4)

Effect of different tax rates (3.8) (3.8) (6.9) (6.9)

Unrecognised losses in overseas companies 11.8 11.8 14.7 17.0

Effect of joint ventures – – 0.3 0.3

Effect of super deduction in respect of tax relief for fixed assets (2.7) (2.7) – –

Expenditure not allowable 3.6 1.9 10.0 59.1

Adjustments to current tax expense in respect of previous years (1.0) (1.0) 9.0 11.9

Adjustments to deferred tax expense in respect of previous years (13.8) (12.9) (1.7) (5.2)

Impact of deferred tax being at a different rate from current tax rate – 13.1 – 12.5

Other movements (1.8) (1.8) 1.2 1.8

TAX (CREDIT)/EXPENSE REPORTED IN THE CONSOLIDATED INCOME

STATEMENT (10.7) 15.7 (94.1) (100.9)

157Whitbread Annual Report and Accounts 2021/22

Governance Other informationStrategic report Financial statements

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

£m

Total

£m

AT 27 FEBRUARY 2020 (54.3) (64.4) (56.3) 43.3 – (6.1) (137.8)

Charge to consolidated income statement 10.0 6.6 (3.8) 0.7 84.4 4.2 102.1

Charge to statement of comprehensive income – – (2.4) – (0.7) (0.6) (3.7)

Charge to statement of changes in equity – – – – – (1.9) (1.9)

Transfer – – – (4.7) – 4.7 –

Arising on acquisitions – – – (3.5) – – (3.5)

Foreign exchange and other movements 0.1 – – 0.2 – (0.1) 0.2

AT 25 FEBRUARY 2021 (44.2) (57.8) (62.5) 36.0 83.7 0.2 (44.6)

(Charge)/credit to consolidated income

statement

(28.3) (34.7) (15.4) 12.6 53.7 (4.6) (16.7)

(Charge)/credit to statement of comprehensive

income

– – (88.0) – 1.9 (0.5) (86.6)

Charge 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)

1 The total charge to the consolidated income statement of £16.7m comprises a rate change charge of £13.1m, being the largest component of the net charge. This has arisen

due to the substantively enacted increase in the UK corporation tax rate from 19% to 25%. A decision made to utilise capital allowances in the FY21 tax computation has

caused a £21.0m movement between the Accelerated capital allowances and Losses categories above.

2 The total charge to other comprehensive income of £86.6m includes a rate change charge of £27.5m and a charge of £60.6m driven by actuarial gains on the defined

benefit pension scheme.

The Group has unrecognised German tax losses of £128.2m (2021: £84.8m) 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 think

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 £40.9m (2021: £26.2m).

At 3 March 2022, no deferred tax liability is recognised (2021: £nil) on gross temporary differences of £13.9m (2021: £3.0m)

relating to the unremitted earnings of overseas 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 £0.2m (2020/21: £0.2m).

Factors affecting the tax charge for future years

The UK Budget 2021 announcements on 3 March 2021 included measures to support economic recovery as a result of the

ongoing COVID-19 pandemic. These included an increase to the UK’s main corporation tax rate from 19% to 25%, effective from

1 April 2023. The change has resulted in the remeasurement of those UK deferred tax assets and liabilities which are forecast

to be utilised or to crystallise after this effective date, using the higher tax rate. A charge of £13.1m has been recorded in the

consolidated income statement and a charge of £27.5m in the consolidated statement of comprehensive income based on the

Group’s current estimate of how the balances will unwind. However, the Group has some ability to control the timing of this

unwinding and could vary the value of the deferred tax liability by up to £11.0m.

Whitbread Annual Report and Accounts 2021/22 158

Notes to the Consolidated Financial Statements continued

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 year. Where the average share price for the year is lower than the option

price, the options become anti-dilutive and are excluded from the calculation. There are 0.7m (2021: 2.3m) share 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:

2021/22

million

2020/21

million

Basic weighted average number of ordinary shares 201.9 188.1

Effect of dilution – share options 1.0 –

DILUTED WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES 202.9 188.1

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 214.5m, less 12.5m treasury shares held by Whitbread PLC and 0.2m held by the ESOT (2021: 214.4m, less 12.5m

treasury shares held by Whitbread PLC and 0.4m held by the ESOT).

The profits/(losses) used for the earnings per share calculations are as follows:

2021/22

£m

2020/21

£m

PROFIT/(LOSS) FOR THE YEAR ATTRIBUTABLE TO PARENT SHAREHOLDERS 42.5 (906.5)

Adjusting items before tax (Note 6) (74.0) 372.3

Adjusting tax charge/(credit) (Note 6) 26.4 (6.8)

ADJUSTED LOSS FOR THE YEAR ATTRIBUTABLE TO PARENT SHAREHOLDERS (5.1) (541.0)

2021/22

pence

2020/21

pence

BASIC EPS ON PROFIT/(LOSS) FOR THE YEAR 21.1 (4 81.9)

Adjusting items before tax (Note 6) (36.7) 197. 9

Adjusting tax charge/(credit) (Note 6) 13.1 (3.6)

BASIC EPS ON ADJUSTED LOSS FOR THE YEAR (2.5) (2 87.6 )

DILUTED EPS ON PROFIT/(LOSS) FOR THE YEAR 20.9 (481.9)

DILUTED EPS ON ADJUSTED LOSS FOR THE YEAR (2.5) (287.6)

159Whitbread Annual Report and Accounts 2021/22

Governance Other informationStrategic report Financial statements

12 DIVIDENDS PAID AND PROPOSED

2021/22 2020/21

pence per

share £m

pence per

share £m

Final dividend, proposed and paid, relating to the prior year – – – –

Interim dividend proposed, and paid, for the current year – – – –

TOTAL EQUITY DIVIDENDS PAID IN THE YEAR – –

Dividends on other shares:

B share dividend 0.30 – 0.90 –

C share dividend – – 0.90 –

TOTAL DIVIDENDS PAID – –

Proposed for approval at annual general meeting:

Final equity dividend for the current year 34.70 70.0 – –

Following the publication of these financial statements, the Group is able to demonstrate compliance with covenant metrics

agreed with its lenders, being net debt/adjusted EBITDA < 3.5x and adjusted EBITDA/interest > 3.0x. The Group will notify

its lending banks of its intention to remove the covenant waivers which are currently in place, and will subsequently issue a

compliance certificate to reinstate the original covenants.

As a result, a final dividend of 34.70p per share amounting to a dividend of £70.0m was recommended by the directors at

their meeting on 27 April 2022. 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 27 February 2020 111.3 108.8 220.1

Additions – 10.8 10.8

Recognised on acquisition of a subsidiary 224.2 – 224.2

Assets written off – (9.7) (9.7)

Foreign currency adjustment 14.6 0.1 14.7

AT 25 FEBRUARY 2021 350.1 110.0 460.1

Additions – 21.1 21.1

Assets written off – (10.8) (10.8)

Foreign currency adjustment – (0.1) (0.1)

AT 3 MARCH 2022 350.1 120.2 470.3

AMORTISATION AND IMPAIRMENT

At 27 February 2020 (0.8) (46.5) (47.3)

Amortisation during the year – (23.6) (23.6)

Impairment during the year (238.8) – (238.8)

Amortisation on assets written off – 8.7 8.7

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 adjustment – 0.1 0.1

AT 3 MARCH 2022 (239.6) (71.4) (311.0)

NET BOOK VALUE AT 3 MARCH 2022 110.5 48.8 159.3

NET BOOK VALUE AT 25 FEBRUARY 2021 110.5 48.6 159.1

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.

Capital expenditure commitments

Capital expenditure commitments in relation to intangible assets at the year-end amounted to £7.3m (2021: £0.5m).

Whitbread Annual Report and Accounts 2021/22 160

Notes to the Consolidated Financial Statements continued

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 27 February 2020 3,538.1 1,536.0 5,074.1 20.4 5,094.5

Additions 116.0 82.4 198.4 0.7 199.1

Acquisition of a subsidiary – 6.0 6.0 – 6.0

Interest capitalised 0.9 – 0.9 – 0.9

Movements to held for sale in the year (11.2) (2.5) (13.7) – (13.7)

Disposals (0.2) – (0.2) – (0.2)

Assets written off (8.1) (104.1) (112.2) – (112.2)

Foreign currency adjustment 5.1 (0.2) 4.9 0.7 5.6

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

Movements to 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 adjustment (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

DEPRECIATION AND IMPAIRMENT

At 27 February 2020 (211.2) (630.9) (842.1) (0.1) (842.2)

Depreciation charge for the year (16.1) (134.1) (150.2) (0.1) (150.3)

Impairment (Note 15) (63.8) (0.6) (64.4) – (64.4)

Movements to held for sale in the year 3.8 1.4 5.2 – 5.2

Depreciation on assets written off – 106.2 106.2 – 106.2

Foreign currency adjustment – 0.2 0.2 – 0.2

AT 25 FEBRUARY 2021 (287.3) (657.8) (945.1) (0.2) (945.3)

Depreciation charge for the year (22.9) (135.0) (157.9) – (1 57.9)

Impairment reversal/(charge) (Note 15) 16.9 (2.4) 14.5 – 14.5

Movements to 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 adjustment 0.1 0.7 0.8 – 0.8

AT 3 MARCH 2022 (281.4) (734.2) (1,015.6) – (1,015.6)

NET BOOK VALUE AT 3 MARCH 2022 3,380.6 846.5 4,227. 1 – 4,227. 1

NET BOOK VALUE AT 25 FEBRUARY 2021 3,353.3 859.8 4,213.1 21.6 4,234.7

Included above are assets under construction of £260.5m (2021: £289.9m).

There is a charge in favour of the pension scheme over properties with a market value of £531.5m (2021: £500.0m). See Note 32

for further information.

Amounts relating to right-of-use assets under IFRS 16 are detailed in Note 22.

161Whitb read Annual Report and Accounts 2021/22

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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 £0.2m (2020/21: £0.4m) within other income and £0.1m (2020/21: £0.1m) of

direct operating expenses in relation to this property.

During the year, 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

2022

£m

2021

£m

Capital expenditure commitments for property, plant and equipment

for which no provision has been made 106.4 82.5

Capitalised interest

Interest capitalised during the year amounted to £0.9m, using an average rate of 2.7% (2020/21: £0.9m, using an average rate

of 2.9%).

Assets held for sale

During the year, four property assets with a combined net book value of £57.0m (2020/21: seven at £9.1m) were transferred to

assets held for sale. No property was transferred back to property, plant and equipment (2020/21: one with a net book value

of £0.6m). Seven property assets sold during the year had a net book value of £11.2m (2020/21: three at £3.9m). An impairment

loss of £nil (2020/21: £0.7m) was recognised relating to assets classified as held for sale. By the year end there were eleven sites

with a combined net book value of £64.8m (2021: 14 at £19.0m) classified as assets held for sale. There are no gains or losses

recognised in other comprehensive income with respect to these assets. Sites are transferred to assets held for sale when there

is an expectation that they will be sold within 12 months. If the site is not expected to be sold within 12 months 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 £15.4m (2021: £11.4m).

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.

Whitbread Annual Report and Accounts 2021/22 162

Notes to the Consolidated Financial Statements continued

15 IMPAIRMENT

During the year, net impairment reversals of £34.4m (2020/21: impairment losses £348.8m) and asset write offs of £nil

(2020/21: £7.4m) were recognised within operating costs. These impairment reversals are primarily driven by an increase in

anticipated cash flows, and a decrease in the discount rate reflecting reduced market risk and volatility. The losses/(reversals)

were recognised on the following classes of assets:

2021/22

£m

2020/21

£m

IMPAIRMENT LOSSES/(REVERSALS)

Property, plant and equipment – impairment losses 10.1 61.2

Property, plant and equipment – impairment reversals (30.4) –

Property, plant and equipment – transfer to assets held for sale 5.8 3.2

Intangible assets – goodwill – 238.8

Right-of-use assets – impairment losses 0.4 36.7

Right-of-use assets – impairment reversals (22.1) –

Investments in joint ventures 1.8 8.2

Assets held for sale – 0.7

ASSET WRITE OFFS

Property, plant and equipment – early stage expansion projects – 5.7

IT assets – 1.7

TOTAL (CREDIT)/CHARGE FOR IMPAIRMENT AND ASSET WRITE OFFS (34.4) 356.2

All of the impairment assessments take account of expected market conditions which include future risks including climate

change and climate change related legislation.

Property, plant and equipment and right-of-use assets – impairment review

As a result of the COVID-19 pandemic and subsequent easing of restrictions, the Group identified indicators of both

impairment and impairment reversals and as a result performed an impairment assessment of all trading sites. This resulted

in net impairment reversals of £20.3m (2020/21: impairment loss of £61.2m) being recorded in relation to property, plant and

equipment in the UK and net impairment reversals of £21.7m (2020/21: impairment loss £36.7m) being recorded in relation to

right-of-use assets in the UK.

The Group considers each trading site to be a CGU. Where indicators of impairment are identified, an impairment assessment

is undertaken. In assessing whether an asset has been impaired, the carrying amount of the site is compared to its recoverable

amount. The recoverable amount is the higher of its value in use and its fair value less costs of disposal.

The Group calculates a value in use (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 fair value less costs of disposal (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 average pre-tax discount rate used is 8.7% in the

UK, and 7.3% in Germany (2021: 9.5% UK and 8.9% Germany). The discount rate has decreased reflecting market volatility in the

spot risk-free rate and equity risk premium inputs used in the Group’s WACC calculation.

Approved budget period

Forecast cash flows for the initial five-year period are based on actual cash flows for FY20 being the period before the

impact of the COVID-19 pandemic and applying management’s assumptions of the impact of the pandemic and expected

recovery period.

The key assumptions used by management in setting the Board approved financial budgets for the initial five-year period were

as follows:

› Normalised trading: Actual results from FY20 have been used as a basis for the budget as they represent normalised trading

before the impact of COVID-19.

› Forecast growth rates: Forecast growth rates are based on the Group business plan which includes assumptions around the

timing and profile of the UK and German economies’ recovery from the COVID-19 pandemic.

› 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.

163Whitb read Annual Report and Accounts 2021/22

Governance Other informationStrategic report Financial statements

15 IMPAIRMENT CONTINUED

Long-term growth rates

A long-term growth rate of 2.0% (2021: 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 9 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 8.7% to 9.7%.

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 reasonable 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 3 March 2022 of:

INCREMENTAL IMPAIRMENT CHARGE/(REVERSAL)

Total

£m

Increase to impairment charge/(reversal) if discount rate increased by 2% 24.9

Increase to impairment charge/(reversal) if long-term growth rates reduced by 1% 18.9

Increase to impairment charge/(reversal) if EBITDAR multiple reduced by 10% 3.1

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 reasonable 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. An analysis of goodwill by operating segment is:

£m

Germany

£m

Total

£m

AT 27 FEBRUARY 2020 110.5 – 110.5

Recognised on acquisition of a subsidiary – 224.2 224.2

Foreign exchange – 14.6 14.6

Impairment – (238.8) (238.8)

AT 25 FEBRUARY 2021 AND 3 MARCH 2022 110.5 – 110.5

In the prior year an impairment of £238.8m was recorded in relation to goodwill arising on the acquisition of Foremost

Hospitality Hiex GmbH, reflecting the impact of the COVID-19 pandemic on current and future growth rates.

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% (2021: 2.0%) growth rate. The pre-tax discount rate applied to cash flow projections is 8.7% for the UK and 7.3% for

Germany (2021: 9.5% UK and 8.9% Germany).

As a result of the German goodwill being impaired in the prior year and the level of headroom within the UK segment, there is

no reasonable possible change that could result in a further material impairment of goodwill.

Whitbread Annual Report and Accounts 2021/22 164

Notes to the Consolidated Financial Statements continued

15 IMPAIRMENT CONTINUED

Investments in joint ventures

The COVID-19 pandemic has had a significant impact on trading and future forecasts for trading at the Group’s joint ventures.

An impairment review was carried out during the year ended 25 February 2021 and an impairment charge of £8.2m recorded in

the financial statements relating to the Group’s investment in Healthy Retail Limited. Additional loan funding of £1.8m has been

provided to Healthy Retail Limited in the year to 3 March 2022 and subsequently impaired. See Note 16.

Property, plant and equipment – assets held for sale

During the period, four hotels were transferred to assets held for sale, resulting in an impairment charge of £5.8m (2020/21:

seven hotels resulting in an impairment charge of £3.2m). In addition, during 2020/21, an impairment charge of £0.7m 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.

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 £1.4m (2020/21: £1.3m).

Healthy Retail Limited

The Group holds a 49% interest in Healthy Retail Limited, a joint venture which operates a chain of 20 stores in London trading

as ‘Pure’, that specialises in fresh, natural healthy meals. The impact of COVID-19 has had a significant impact on the company’s

trading and on 7 October 2020 Healthy Retail Limited entered into a Creditor’s Voluntary Agreement (CVA). Healthy Retail

Limited has also obtained a Coronavirus Business Interruption Loan Scheme facility 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 £1.8m (2020/21: £8.2m).

The Group has an option to purchase the remaining 51% interest which expires on 31 December 2022. 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 who have 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

2022

£m

2021

£m

Opening investment in joint ventures 37. 3 54.8

Share of profit/(loss) for the year 0.4 ( 7.7 )

Foreign exchange movements 2.0 (3.3)

Loans advanced 1.8 –

Impairment

(1.8) (8.2)

Interest on loans – 0.4

Capital contribution 1.4 1.3

CLOSING INVESTMENT IN JOINT VENTURES 41.1 3 7. 3

1 Includes an impairment of loans advanced to joint ventures of £1.8m (2020/21: £5.8m) determined under IFRS 9.

165Whitbread Annual Report and Accounts 2021/22

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16 INVESTMENT IN JOINT VENTURES CONTINUED

2022 2021

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 9.1 2.0 11.1 6.7 0.8 7.5

Non-current assets 141.2 20.2 161.4 138.1 26.3 164.4

Current liabilities (10.4) (15.9) (26.3) (11.4) (14.1) (25.5)

Non-current liabilities (56.0) (16.1) (72.1) (57.2) (19.3) (76.5)

NET ASSETS 83.9 (9.8) 74.1 76.2 (6.3) 69.9

Group’s share of interest in joint ventures’ net assets 41.1 (4.9) 36.2 3 7. 3 (3.1) 34.2

Premium paid on acquisition – 4.5 4.5 – 4.5 4.5

Loans to joint ventures – 7.5 7. 5 – 5.8 5.8

Accumulated impairment – (7.1) (7.1) – ( 7. 2) ( 7. 2)

GROUP’S CARRYING AMOUNT OF THE INVESTMENT 41.1 – 41.1 3 7. 3 – 3 7. 3

WITHIN GROSS BALANCE SHEETS

Cash and cash equivalents 6.9 1.6 8.5 5.2 – 5.2

Current financial liabilities (4.6) (13.1) (17.7) (3.6) (10.9) (14.5)

Non-current financial liabilities (56.0) (16.1) (72.1) (56.8) (19.3) (76.1)

SUMMARY OF JOINT VENTURES’ INCOME STATEMENT

Revenue 18.2 11.8 30.0 11.2 4.5 15.7

Other income – 0.3 0.3 – 2.4 2.4

Depreciation and amortisation (4.6) (4.2) (8.8) (5.9) (4.5) (10.4)

Impairment – – – (3.5) – (3.5)

Other operating costs (10.9) (10.5) (21.4) (11.2) (6.1) (17.3)

Finance costs (2.0) (1.3) (3.3) (2.6) (1.2) (3.8)

PROFIT/(LOSS) BEFORE TAX 0.7 (3.9) (3.2) (12.0) (4.9) (16.9)

Income tax – – – – – –

Profit/(loss) after tax 0.7 (3.9) (3.2) (12.0) (4.9) (16.9)

Other comprehensive income – – – – – –

TOTAL COMPREHENSIVE INCOME 0.7 (3.9) (3.2) (12.0) (4.9) (16.9)

GROUP SHARE

Profit/(loss) after tax

0.4 – 0.4 (5.9) (1.8) ( 7.7 )

Other comprehensive income – – – – – –

1 The group 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 3 March 2022, the Group’s share of the capital commitments of its joint ventures amounted to £0.1m (2021: £0.1m).

17 INVENTORIES

2022

£m

2021

£m

Finished goods held for resale 15.0 7.5

Consumables 4.4 4.6

19.4 12.1

The carrying value of inventories is stated net of a provision of £2.5m (2021: £5.5m).

Whitbread Annual Report and Accounts 2021/22 166

Notes to the Consolidated Financial Statements continued

18 TRADE AND OTHER RECEIVABLES

2022

£m

2021

£m

Trade receivables 45.5 22.1

Prepayments and accrued income 24.2 17. 6

Other receivables 46.7 34.5

116.4 74.2

Trade and other receivables are non-interest bearing and are generally on 30-day terms. Trade receivables includes £44.2m

(2021: £16.0m) relating to contracts with customers. Other receivables include £14.7m (2021: £14.0m) in relation to grants and

other support receivable from the UK and German governments (see Note 9).

The allowance for expected credit loss relating to trade and other receivables at 3 March 2022 was £2.0m (2021: £1.3m).

During the year, credit losses of £2.7m (2020/21: £0.7m) were recognised within operating costs in the consolidated

income statement.

19 CASH AND CASH EQUIVALENTS

2022

£m

2021

£m

Cash at bank and in hand 43.5 19.2

Money market funds 757.3 1,011.8

Short-term deposits 331.6 225.0

1,132.4 1,256.0

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.

167Whitbread Annual Report and Accounts 2021/22

Governance Other informationStrategic report Financial statements

20 BORROWINGS

Amounts drawn down on the Group’s borrowing facilities are as follows:

Current Non-current

2022

£m

2021

£m

2022

£m

2021

£m

Revolving credit facility – – – –

Private placement loan notes – 312.0 – –

Senior unsecured bonds – – 991.9 990.5

– 312.0 991.9 990.5

Covenants

The Group has received covenant test waivers for its revolving credit facility covering the period to 2 March 2023. Under the

terms of the waivers, the Group is required to maintain £400.0m cash and/or headroom under undrawn committed bank

facilities and total net debt must not exceed £2.0bn. Following the publication of these financial statements, the Group is able

to demonstrate compliance with covenant metrics agreed with its lenders, being net debt/ EBITDA < 3.5x and EBITDA/interest

> 3.0x. The Group will notify its lending banks of its intention to remove the covenant waivers which are currently in place, and

will subsequently issue a compliance certificate to reinstate the original covenants.

Revolving credit facility (£850m)

On 29 January 2021, the Group agreed to amend and extend its revolving credit facility (RCF). The agreement gives total

committed credit of £850.0m available until 7 September 2022 and £725.0m available until 7 September 2023. The facility is

a Multicurrency Revolving Facility Agreement and has variable interest rates with GBP being linked to SONIA and EUR being

linked to EURIBOR.

At 3 March 2022, the Group had available £850.0m (2021: £950.0m) of undrawn committed borrowing facilities in respect

ofrevolving credit facilities on which all conditions precedent had been met.

Private placement loan notes

On 26 March 2021, the Group repaid loan notes with a principal value of £200.0m originally due for repayment in August 2027.

An early repayment charge of £21.2m was recorded in the financial statements for the year ended 25 February 2021. As a result

of the hedging arrangements in place, the total cash outflow recorded by the Group was £220.4m.

On 6 September 2021, the Group repaid loan notes on maturity with a principal values of £25.0m. On 14 December 2021, the

Group repaid loan notes with a principal value of US$93.5m originally due for repayment in January 2022. As a result of the

hedging arrangements in place, the total cash outflow recorded by the Group was £83.5m.

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%

The 2027 green use of proceeds bonds were issued on 10 February 2021. Interest is payable annually on 31 May. The bonds were

initially priced at 99.516% of face value and are unsecured.

The 2031 green use of proceeds bonds were issued on 10 February 2021. Interest is payable annually on 31 May. The bonds were

initially priced at 99.327% of face value and are unsecured.

On issue of these bonds, the Group received gross proceeds of £546.8m and incurred arrangement fees of £2.8m. The bonds

contain an early prepayment option which meets the definition of an embedded derivative. This was assessed to have a value

of £nil as at the year end.

Arrangement fees of £3.4m (2021: £3.9m) directly incurred in relation to the bond facilities are included in the carrying value

and are being amortised over the term of the facilities.

Whitbread Annual Report and Accounts 2021/22 168

Notes to the Consolidated Financial Statements continued

20 BORROWINGS CONTINUED

UK Government CCFF

The Group’s eligibility to issue commercial paper under the UK Government Covid Corporate Financing Facility expired

on 22 March 2021. The Group’s issuer limit was £300.0m, reduced from an initial limit of £600.0m following the reduction

in Whitbread’s credit rating to BBB-. The Group did not draw down on the facility during the year or prior to its expiry on

22 March 2021.

21 MOVEMENTS IN CASH AND NET DEBT

YEAR ENDED

3 MARCH 2022

25 February

2021

£m

Cost of

borrowings

£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) – 127.1 (619.4) 22.1 – – (3,701.8)

Derivatives held to hedge

financing activities 5.8 – – – – (5.8) – –

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

YEAR ENDED

25 FEBRUARY 2021

27 February

2020

£m

Cost of

borrowings

£m

Cash flow

£m

Net new

lease

liabilities

£m

Foreign

exchange

£m

Fair value

adjustments

to loans

£m

Amortisation

of premiums

and

discounts

£m

25 February

2021

£m

Cash and cash equivalents 502.6 – 752.0 – 1.4 – – 1,256.0

LIABILITIES FROM

FINANCINGACTIVITIES

Borrowings (825.5) 5.5 (471.7) – 5.8 7. 5 (24.1) (1,302.5)

Lease liabilities (2,620.6) – 79.0 (686.9) (3.1) – – (3,231.6)

Derivatives held to hedge

financing activities 17.7 – – – – (11.9) – 5.8

Total liabilities from

financingactivities (3,428.4) 5.5 (392.7) (686.9) 2.7 (4.4) (24.1) (4,528.3)

Less: lease liabilities 2,620.6 – (79.0) 686.9 3.1 – – 3,231.6

Less: derivatives held to hedge

financing activities (17.7 ) – – – – 11.9 – (5.8)

NET (DEBT)/CASH (322.9) 5.5 280.3 – 7. 2 7. 5 (24.1) (46.5)

169Whitb read Annual Report and Accounts 2021/22

Governance Other informationStrategic report Financial statements

22 LEASE ARRANGEMENTS

The Group leases various buildings which are used within the Premier Inn business. The leases are non-cancellable operating

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 operating

lease agreements.

An analysis of the Group’s right-of-use asset and lease liability is as follows:

RIGHT-OF-USE ASSET

Property

£m

Other

£m

Total

right-of-use

assets

£m

Investment

property

£m

Total

£m

At 27 February 2020 2,271.5 2.2 2,273.7 – 2,273.7

Additions 4 27.7 1.0 428.7 15.4 444.1

Recognised on acquisition of a subsidiary 193.3 – 193.3 51.9 245.2

Impairment (36.7) – (36.7) – (36.7)

Foreign currency adjustment 2.9 – 2.9 0.7 3.6

Depreciation (122.0) (1.3) (123.3) (3.0) (126.3)

Terminations – (0.2) (0.2) – (0.2)

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

Impairment 21.7 – 21.7 – 21.7

Foreign currency adjustment (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

LEASE LIABILITY

Property

£m

Other

£m

Total

right-of-use

assets

£m

Investment

property

£m

Total

£m

At 27 February 2020 2,618.8 1.8 2,620.6 – 2,620.6

Additions 419.9 1.0 420.9 16.0 436.9

Recognised on acquisition of a subsidiary 193.3 – 193.3 51.9 245.2

Interest 122.0 0.1 122.1 1.1 123.2

Foreign currency adjustment 2.5 – 2.5 0.6 3.1

Payments (189.9) (1.3) (191.2) (3.6) (194.8)

Terminations (2.4) (0.2) (2.6) – (2.6)

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 adjustment (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

1 During 2020/21, the Group acquired leasehold sites which was sub-leased to a third party and recorded within investment property. During the year, 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.

During the year, the Group had non-cash additions to right-of-use assets and lease liabilities of £583.3m (2020/21: £399.7m)

relating to new leases and £34.3m (2020/21: £36.8m) relating to amendments to existing leases. The Group received cash

lease incentives of £2.0m (2020/21: £2.7m) and paid cash lease incentives of £nil (2020/21: £7.6m) on entering new and

amended leases.

A maturity analysis of gross lease liability payments is included within Note 24.

Amendments to IFRS 16: Covid-19-Related Rent Concessions

During the final quarter of the prior financial year, the Group underpaid lease payments with a total value of £22.7m. As a result,

the underpaid amount was included within lease liabilities in the consolidated balance sheet. Substantially all of these amounts

were paid in FY22. The Group early adopted the requirements of Amendments to IFRS 16: Covid-19-Related Rent Concessions

during the prior year. As a result of early adopting these requirements, rent deferrals which would otherwise have been treated

as lease modifications were accounted for as if the change was not a lease modification. The adoption of the amendments had

no impact on the consolidated income statement.

Whitbread Annual Report and Accounts 2021/22 170

Notes to the Consolidated Financial Statements continued

22 LEASE ARRANGEMENTS CONTINUED

Amounts recognised in the Group income statement

2021/22

£m

2020/21

£m

Depreciation expense of right-of-use assets 148.1 126.3

Interest expense on lease liabilities 133.2 123.2

Expense relating to low-value assets and short-term leases – –

Variable lease payment expense/(credit) 0.3 (0.6)

Impairment (reversals)/losses of right-of-use assets (Note 15) (21.7) 36.7

Lease income (7.9) ( 7. 8)

NET LEASE EXPENSE RECOGNISED IN THE CONSOLIDATED INCOME STATEMENT 252.0 2 7 7.8

Amounts recognised in the Group cash flow statement

The Group’s total cash outflow in relation to leases was £260.6m (2020/21: £201.8m).

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

£m

2021

£m

Extension options expected not to be exercised 906.6 7 97.6

Termination options expected to be exercised – –

906.6 7 97.6

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 71% of the Group’s lease liabilities are subject to inflation-linked rentals and a further 14% are

subject to rent reviews. Rental changes linked to inflation or rent reviews typically occur on an annual or five-yearly basis.

As at 3 March 2022, the Group was committed to leases with future cash outflows totalling £2,106.7m (2021: £2,690m) 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 £7.9m (2020/21: £7.8m). Future minimum rentals receivable under

non-cancellable operating leases at the year-end are as follows:

2022

£m

2021

£m

Within one year 2.9 7. 9

After one year but not more than five years 5.2 10.0

More than five years 6.4 10.7

14.5 28.6

171Whitbread Annual Report and Accounts 2021/22

Governance Other informationStrategic report Financial statements

23 PROVISIONS

Restructuring

£m

Onerous

contracts

£m

Property

costs

£m

Insurance

claims

£m

Government

payments

£m

Other

£m

Total

£m

At 27 February 2020 2.0 11.1 31.9 – – 3.4 48.4

Created 5.8 4.9 – 2.2 3.6 – 16.5

Transferred – – – 6.8 – – 6.8

Utilised (5.8) (4.3) (12.9) (1.8) – (0.3) (25.1)

Released (0.9) (1.6) (3.3) – – (1.3) ( 7. 1)

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

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

Analysed as:

Current 1.1 8.3 15.7 – 3.6 1.8 30.5

Non-current – 1.8 – 7. 2 – – 9.0

AT 25 FEBRUARY 2021 1.1 10.1 15.7 7.2 3.6 1.8 39.5

Restructuring

A provision of £1.1m was brought forward in relation to the restructure of the Groups support centre and site operations

announced as a result of the COVID-19 pandemic. During the year the Group utilised £0.8m of the provision and £0.3m was

released 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% (2021: 2.0%) based on an approximation for the time

value of money.

Property

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 £0.3m 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. At the year-end, a provision of £0.8m (2021: £3.0m) was held for future

unavoidable costs on such agreements, to be utilised over a period of up to three years. The software intangible assets

associated with these contracts have been fully impaired in previous financial years.

A provision of £1.1m was created in FY20 as a result of the cancellation of a contract relating to the supply of IT equipment.

During the year, the Group utilised £0.4m of the provision.

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 £3.3m was brought

forward in relation to these contracts. During the year the Group utilised £2.4m of the provision and released £0.7m of the

provision to the income statement.

Whitbread Annual Report and Accounts 2021/22 172

Notes to the Consolidated Financial Statements continued

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 £15.7m was brought forward in relation to these costs. During the year

£9.1m of the provision has been utilised and £nil of costs have been released. £5.2m of the remaining provision is expected to

be utilised within one year.

In addition, the Group has recognised £nil (2021/21: £13.4m) reimbursements of those costs from property developers.

The Group continues to pursue further reimbursements which are not recognised asthe recovery is not certain.

The Group utilises the skills and expertise of both internal and external property experts to determine the provision held.

Insurance

A provision of £7.2m 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 £3.0m were created and £2.0m of the provision was utilised.

Government payments

The Group has made various claims for government support which are subject to the review by relevant agencies.

The provision recognised represents the Group’s best estimate of amounts potentially repayable under previously submitted

claims, and for potential historical indirect tax repayments. A provision of £3.6m was brought forward in relation to these

claims. During the year further provisions of £11.8m were created and £3.8m of the provision was utilised. Due to the complex

nature and fast pace of changes in the rules around certain government payments, the Group has 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 3rd party review has highlighted an alternative assumption could be formed and on the basis of a

probable outflow a provision based on that approach has been made.

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 indemnity agreements. At 3 March 2022, £1.8m of the provision was still held for

risks arising from indemnity agreements. The remaining costs are expected to be utilised within one year.

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. The interest rate swaps for sterling were expired in February 2022. At the year-end, £991.9m

(100%) of Group debt was fixed for an average of 5.5 years at an average interest rate of 3.0% (2021: £1,302.5m (100%) for 5.3

years at 3.0%).

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3 March 2022 and 25 February 2021 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 £11.3m (2021: £12.5m), and have nil impact on equity (2021: £0.8m).

173Whitbread Annual Report and Accounts 2021/22

Governance Other informationStrategic report Financial statements

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

the use of overdrafts and bank loans. This strategy includes monitoring the maturity of 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 3 March 2022 and 25 February 2021 based

on contractual undiscounted payments, including interest:

3 MARCH 2022

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

Interest-bearing loans and borrowings – 19.0 15.2 554.1 594.6 1,182.9 991.9

Lease liabilities

– 67. 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

25 FEBRUARY 2021

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

Interest-bearing loans and borrowings – 221.8 102.4 573.7 609.3 1,5 07. 2 1,302.5

Lease liabilities

– 54.6 175.1 925.5 4,513.4 5,668.6 3,231.6

Derivative financial instruments – – 2.4 – – 2.4 2.4

Trade and other payables – 71.2 3 7.7 26.8 – 135.7 134.0

– 3 47. 6 3 17. 6 1,526.0 5,122.7 7,31 3.9 4,670.5

1 Contractual undiscounted payments relating to lease liabilities due in more than 5 years includes £1,324.5m (2021: £1,140.2m) due between 5 and 10 years, £1,925.3m

(2021: £1,859.4m) due between 10 and 20 years and £1,668.5m (2021: £1,513.8m) due in more than 20 years.

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 £1,240.4m (2021: £1,327.4m).

Foreign currency risk

Foreign exchange exposure is currently not significant to the Group.

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.

Whitbread Annual Report and Accounts 2021/22 174

Notes to the Consolidated Financial Statements continued

24 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES CONTINUED

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 lending covenants. See pages 26 to 33 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 Group has received covenant test waivers for its revolving credit facility covering the period to 2 March 2023. In addition,

it has received covenant test waivers for its pension scheme for the period to 3 March 2022 and repaid the private placement

loan notes during the year. Under the terms of the waivers, the Group is required to maintain £400.0m cash and/or headroom

under undrawn committed bank facilities and total net debt must not exceed £2.0bn. The covenants which have been waived

relate to measurement of adjusted EBITDA against consolidated net finance charges (interest cover) and total net debt

(leverage ratio, on a not-adjusted-for pension and property lease basis).

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.

Interest rate benchmark reform

The Group has assumed that the interest rate benchmark on which the hedged risk or the cash flows of the hedged item

orhedging instrument are based is not altered by uncertainties resulting from the proposed interest rate benchmark reform.

The RCF was transitioned to the agreed Risk Free Rate (SONIA) from GBP LIBOR effective 1 January 2022.

175Whitbread Annual Report and Accounts 2021/22

Governance Other informationStrategic report Financial statements

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

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)

Contingent consideration – – – (25.1) (25.1)

AS AT 25 FEBRUARY 2021

Trade and other receivables 56.6 – – – 56.6

Cash and cash equivalents 244.2 – – 1,011.8 1,256.0

Interest-bearing loans and borrowings – (1,302.5) – – (1,302.5)

Lease liabilities – (3,231.6) – – (3,231.6)

Derivative financial instruments – – 12.4 – 12.4

Trade and other payables – (71.2) – – (71.2)

Contingent consideration – – – (62.8) (62.8)

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 £988.9m. 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

2022

£m

2021

£m

FINANCIAL ASSETS

Derivative financial instruments – level 2 15.8 14.8

FINANCIAL LIABILITIES

Derivative financial instruments – level 2 – 2.4

Contingent consideration – level 3 25.1 62.8

Whitbread Annual Report and Accounts 2021/22 176

Notes to the Consolidated Financial Statements continued

25 FINANCIAL INSTRUMENTS CONTINUED

During the year ended 3 March 2022, there were no transfers between fair value measurement levels. Derivative financial

instruments include £15.8m assets (2021: £6.6m) and £nil liabilities (2021: £nil) due after one year. Contingent consideration

includes £1.2m (2021: £25.6m) 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 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

Interest rate risk

The Group is exposed to interest rate risk associated with drawdowns on the revolving credit facility during the year which

incur interest at a variable rate. The Group had interest rate swaps in place which matured in February 2022. In addition, the

Group did not draw down on the UK Government Covid Corporate Financing Facility during the year or prior to its expiry on

22 March 2021.

Foreign currency risk

The Group was exposed to foreign currency risk associated with the private placement bonds denominated in US$ and had

cross-currency swaps in place in relation to the interest and principal repayment. These bonds were repaid during the year (see

Note 20) and therefore the cross currency swaps are no longer held.

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 3 March 2022 and a net unrealised gain of £9.7m (2021: gain

of £8.5m) has been recorded in the translation reserve. The Group has recorded costs of hedging of £2.5m within finance costs

in the consolidated income statement as a result of the foreign currency basis spread within the hedging instrument.

177Whitbread Annual Report and Accounts 2021/22

Governance Other informationStrategic report Financial statements

25 FINANCIAL INSTRUMENTS CONTINUED

The impact of the hedging instruments and hedged items on the statement of financial position is as follows:

AS 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)

AS AT 25 FEBRUARY 2021

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

CASH FLOW HEDGES

Interest rate swaps 50.0 (2.4)

Derivative financial

instruments (0.4)

Revolving

credit facility 0.4

Cross-currency swaps 58.5 8.2

Derivative financial

instruments (5.4)

US$

denominated

loans 5.8

NET INVESTMENT IN FOREIGN

OPERATIONS

Cross-currency swaps 450.0 6.5

Derivative financial

instruments (8.5)

Net investment

in foreign

subsidiaries 8.5

The impact of the hedging instruments in the consolidated income statement and other comprehensive income (OCI) is

as follows:

Total hedging

loss

recognised in OCI

£m

Amount

reclassified from OCI

to profit or loss

£m

Line item in

the consolidated

income statement

£m

Accumulated value

recognised in cash

flow hedge reserve

£m

2021/22

Interest rate swaps (0.2) 2.5 Finance costs –

Cross-currency swaps (8.0) 8.1 Finance costs –

2020/21

Interest rate swaps (0.4) 2.4 Finance costs (2.4)

Cross-currency swaps (5.4) 5.7 Finance costs 0.1

Whitbread Annual Report and Accounts 2021/22 178

Notes to the Consolidated Financial Statements continued

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 27 February 2020 (3.6) 18.6

Change in fair value recognised in other comprehensive income

– Interest rate swaps (0.4) –

– Cross-currency swaps (5.4) –

Reclassified to profit or loss as hedged item effects profit or loss

– Interest rate swaps 2.4 –

– Cross-currency swaps 5.7 –

Foreign exchange arising on consolidation – 19.3

Fair value movement on derivatives designated as net investment hedges – (8.5)

Deferred tax impact (0.6) (0.7)

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 impact (0.5) 1.9

AT 3 MARCH 2022 – 24.3

Cash flow and fair value 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 amount of £14.2m (2021: £4.5m)

relating to derivatives designated as net investment hedges.

26 TRADE AND OTHER PAYABLES

2022

£m

2021

£m

Trade payables 73.7 24.2

Other taxes and social security 25.8 26.5

Contract liabilities 146.2 41.3

Accruals 223.0 140.3

Other payables 78.1 47.0

Contingent consideration 25.1 62.8

571.9 342.1

ANALYSED AS:

Current 570.7 316.5

Non-current 1.2 25.6

571.9 342.1

Included with contract liabilities is £141.4m (2021: £37.5m) relating to payments received for accommodation where the stay will

take place after the year-end and £4.8m (2021: £3.8m) revenue deferred relating to the Group’s customer loyalty programmes.

During the year, £41.3m presented as a contract liability in 2021 has been recognised in revenue (2021: £51.0m).

Trade payables typically have maturities up to 60 days depending on the nature of the purchase transaction and the

agreed terms.

179Whitbread Annual Report and Accounts 2021/22

Governance Other informationStrategic report Financial statements

26 TRADE AND OTHER PAYABLES CONTINUED

Contingent consideration

2022

£m

2021

£m

Opening contingent consideration 62.8 4.4

Recognised on acquisition of a subsidiary – 56.3

Recognised on acquisition of assets – 1.9

Unwinding of discount rate 1.4 2.1

Paid during the period (36.3) (3.8)

Foreign exchange movements (2.8) 1.9

CLOSING CONTINGENT CONSIDERATION 25.1 62.8

The Group has contingent consideration in relation to 9 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 three 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 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

(2021: 76.80P EACH)

million £m

At 27 February 2020 147.0 112.9

Issued on exercise of employee share options 0.1 0.1

Issued in rights issue 6 7. 3 51.7

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

Rights issue

In June 2020, the Group offered a fully underwritten rights issue to existing shareholders on the basis of one share for every

two fully paid ordinary shares held. The Company received acceptances in respect of 61,452,547 New Ordinary Shares,

representing 91.4% of the total New Ordinary Shares to be issued. The remaining 5,824,869 New Ordinary Shares for which

acceptances were not received were successfully placed at a price of 2,550p per New Ordinary Share.

As a result, a total of 67,277,416 ordinary shares with an aggregate nominal value of £51.7m were issued for cash consideration

of £1,009.2m. Transaction costs of £28.2m were incurred resulting in £929.3m being recognised in share premium and net cash

proceeds of £981.0m.

Employee share options

During the year, options over 0.1m (2020/21: 0.1m) ordinary shares, fully paid, were exercised by employees under the terms

ofvarious share option schemes. The Group received proceeds of £1.9m (2020/21: £2.9m) on exercise of these options.

Whitbread Annual Report and Accounts 2021/22 180

Notes to the Consolidated Financial Statements continued

27 SHARE CAPITAL CONTINUED

Preference share capital

B shares C shares

ALLOTTED, CALLED UP AND FULLY PAID SHARES OF 1P EACH

(2021: 1P EACH)

million £m million £m

AT 17 FEBRUARY 2020, 25 FEBRUARY 2021 AND 3 MARCH 2022 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.

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 27 February 2020 527.0 1,855.0 3.6 – 2,385.6

Other comprehensive income – net gain on cash flow hedges (Note 25) – – (2.3) – (2.3)

Other comprehensive income – deferred tax on cash flow hedges (Note 25) – – 0.6 – 0.6

Loss on ESOT shares issued (6.7) – – – (6.7)

AT 25 FEBRUARY 2021 520.3 1,855.0 1.9 – 2,3 77. 2

Other comprehensive income – net gain 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

181Whitbread Annual Report and Accounts 2021/22

Governance Other informationStrategic report Financial statements

28 RESERVES CONTINUED

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 27 February 2020 12.5 514.5 1.0 12.5

Exercised during the year – – (0.6) (6.7)

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

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

2021/22

£m

2020/21

£m

Profit/(loss) for the year 42.5 (906.5)

Adjustments for:

Tax expense/(credit) 15.7 (100.9)

Net finance costs (Note 8) 169.1 168.3

Share of (profit)/loss from joint ventures (0.4) 7.7

Depreciation and amortisation 326.9 300.2

Share-based payments 12.9 12.7

Impairment (reversals)/write offs (Note 15) (34.4) 356.2

Gains on disposals, property and other provisions (28.8) (5.0)

Timing difference on insurance receipts – 14.0

Other non-cash items 7.7 26.1

CASH GENERATED FROM/(USED IN) OPERATIONS BEFORE WORKING CAPITAL CHANGES 511.2 (1 27.2)

(Increase)/decrease in inventories (7.3) 1.5

(Increase)/decrease in trade and other receivables (45.4) 27. 8

Increase/(decrease) in trade and other payables 235.2 (129.1)

CASH GENERATED FROM/(USED IN) OPERATIONS 693.7 (2 27.0)

Other non-cash items include an inflow of £0.8m representing a bad debt charge, an inflow of £4.3m (2020/21: £9.2m)

as a result of net provision movements and an inflow of£2.6m (2020/21: £3.8m) representing non-cash pension scheme

administration costs. During 2020/21, other non-cash items also include £12.4m representing the write off of a deposit paid

inrelation to an acquisition.

30 CONTINGENT LIABILITIES

There are no contingent liabilities to be disclosed in the year ended 3 March 2022 (2021: none).

Whitbread Annual Report and Accounts 2021/22 182

Notes to the Consolidated Financial Statements continued

31 SHARE-BASED PAYMENT PLANS

Long Term Incentive Plan (LTIP)

The LTIP awarded shares to directors and senior executives of the Group. Vesting of all shares under the scheme depend on

continued employment and meeting earnings per share (EPS) and return on capital employed (ROCE) performance targets

over a three-year period (the vesting period). The awards are settled in equity once exercised. No further LTIP awards have

been issued since FY20 as they have been replaced by the Restricted Share Plan options.

Deferred equity awards

Awards are made under the Whitbread Leadership Group Incentive Scheme. 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 appropriate 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 awards vest, 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.

Performance Share Plan

The Performance Share Plan (PSP) was a one-off award incentivising the executive directors on the separation of Costa from

theWhitbread Group and replaced the 2018 and 2019 LTIP awards for the executive directors. Vesting of the awards under the

scheme was triggered by completion of the separation of Costa from Whitbread and dependent on continued employment

and meeting return on capital employed (ROCE), Total Shareholder Return (TSR) and Strategic Objectives performance

targets. The vested award was subject to a two-year holding period and then 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. In 2018 a one-off award was made to Whitbread’s senior

leaders (excluding executive directors) vesting in two tranches (March 2020 and March 2021). A similar award was made in

2020 vesting in March 2023 and March 2024. During the prior year, 187,781 awards previously made to employees under the

Restricted Share Plan were replaced by 187,781 awards under the R&R scheme. 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 earnings per share

(EPS) and return on capital employed (ROCE) underpin targets over a period of at least three years. After vesting there is an

additional holding period 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.

183Whitbread Annual Report and Accounts 2021/22

Governance Other informationStrategic report Financial statements

31 SHARE-BASED PAYMENT PLANS CONTINUED

Movements in the number of share awards are as follows:

53 WEEKS TO 3 MARCH 2022

Outstanding

at the

beginning

of the year

Granted

during the

year

Replaced

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

52 WEEKS TO 25 FEBRUARY 2021

Outstanding

at the

beginning of

the year

Granted

during the

year

Replaced

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 342,422 36,848 – (84,094) (145,488) 149,688 61,472

Deferred equity awards 178,210 151,615 – (81,417) (6,248) 242,160 9,627

Performance Share Plan 162,627 31,228 – (193,855) – – –

R&R Scheme 234,035 352,824 1 87,7 81 (108,654) (13,135) 652,851 22,135

Restricted Share Plan 69,191 239,533 (1 87,7 81) – (14,256) 106,687 –

986,485 812,048 – (4 68,020) (179,127) 1,151,386 93,234

1 Awards granted during the year includes an adjustment of 138,563 shares as a result of the bonus factor of the rights issue which completed in June 2020.

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:

2021/22 2020/21

Options

WAEP £ per

share Options

WAEP £ per

Outstanding at the beginning of the year 1,139,975 26.59 775,294 32.25

Granted during the year

410,032 24.86 783,707 25.68

Exercised during the year (81,727) 26.15 (111,796) 25.37

Expired during the year (295,172) 26.65 (307,230) 27.5 3

Outstanding at the end of the year 1,173,108 26.01 1,139,975 26.59

Exercisable at the year-end 89,941 30.66 101,400 27.23

1 Awards granted during the prior year includes an adjustment of 115,724 shares as a result of the bonus factor of the rights issue which completed in June 2020.

Outstanding options to purchase ordinary shares of 76.80p between 2022 and 2027 are exercisable at prices between £25.33

and £31.62 per share (2021: between 2021 and 2026 at prices between £25.27 and £33.22). The weighted average share price

at the date of exercise for options exercised during the year was £31.63 (2021: £25.94).

The weighted average contractual life of the share options outstanding as at 3 March 2022 is between 2 and 3 years.

Whitbread Annual Report and Accounts 2021/22 184

Notes to the Consolidated Financial Statements continued

31 SHARE-BASED PAYMENT PLANS CONTINUED

The following table lists the inputs to the model used for the years ended 3 March 2022 and 25 February 2021:

Grant date

Exercise

price

Price at

grant date

Expected

term

Years

Expected

dividend

yield

Expected

volatility

Risk-free

rate %

Vesting

conditions

Deferred equity awards 27.04.2021 - 32.97 3.00 0.75 N/A N/A Service

Deferred equity awards 01.03.2020 – 23.63 3.00 0.25 N/A N/A Service

R&R awards – 2 years 17.12.2020 – 31.60 2.00 – N/A N/A Service

R&R awards – 3 years 17.12.2020 – 31.60 3.00 0.75 N/A N/A Service

Restricted share plan 27.04.2021 – 32.97 3.00 0.75 N/A N/A Non–market

1,2,3,4

Restricted share plan 01.03.2020 – 23.63 3.00 0.25 N/A N/A Non–market

1,3,4

SAYE – 3 years 23.12.2021 24.86 29.63 3.25 2.00 45.0 0.69 Service

SAYE – 3 years 23.12.2020 25.33 31.38 3.25 0.75 45.0 0.02 Service

SAYE – 5 years 23.12.2021 24.86 29.63 5.25 2.00 45.0 0.75 Service

SAYE – 5 years 23.12.2020 25.33 31.38 5.25 1.25 45.0 (0.08) Service

1 Return on capital employed.

2 Other performance conditions.

3 Employment service.

4 Lease adjusted net debt.

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 (ESOT)

The Company funds an ESOT to enable it to acquire and hold shares for the share based payment plans. The ESOT held 0.2m

shares at 3 March 2022 (2021: 0.4m). All dividends on the shares in the ESOT are waived by the Trustee.

TOTAL CHARGED TO THE CONSOLIDATED INCOME STATEMENT FOR ALL SCHEMES

2021/22

£m

2020/21

£m

Long Term Incentive Plan – 0.7

Deferred equity 1.5 2.7

Performance Share Plan – 0.1

R&R Scheme 5.5 4.7

Restricted Share Plan 1.6 0.1

Employee Sharesave scheme 4.3 4.4

EQUITY-SETTLED 12.9 12.7

Accrued share-based payments in the consolidated statement of changes in equity includes £nil (2020/21: £1.3m) relating to

shares issued to satisfy the prior year annual incentive scheme.

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 £11.0m (2020/21: £10.8m). At the year-end, the Group owed

outstanding contributions of £nil (2021: £1.7m) in respect of the defined contribution scheme.

At the year-end, 23,449 employees (2021: 20,985) were active members of the scheme, which also had 52,303 deferred

members (2021: 48,152).

185Whitbread Annual Report and Accounts 2021/22

Governance Other informationStrategic report Financial statements

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 Her 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 (2021: nil), 18,606 deferred pensioners (2021: 19,243) and 16,089 pensions

in payment (2021: 16,145).

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 weighted average duration of the defined benefit plan obligation at the end of the reporting period is 17.0 years

(2021: 17.0 years).

Funding

Expected contributions to be made in the next reporting period total £14.6m (2020/21: £13.7m). In 2021/22, contributions were

£13.0m with £2.6m from the employer, £10.3m from Moorgate Scottish Limited Partnership (SLP) and £0.1m of benefits settled

by the Group in relation to an unfunded scheme (2020/21: £13.0m, with £2.7m from the employer, £10.2m from Moorgate

SLP and £0.1m of benefits settled by the Group in relation to an unfunded scheme). In addition, Whitbread paid £1.8m

(2020/21: £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, 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 (and which was due to reduce to £450.0m in March 2022) will increase 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 buy-out

deficit and will remain in place until there is no longer a buy-out deficit.

Whitbread Annual Report and Accounts 2021/22 186

Notes to the Consolidated Financial Statements continued

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 £500.0m

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 four 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 £96.8m (2020: £162.4m) 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 in a number of

different asset classes (including those denominated in foreign

currencies). These assets include equities, gilts, non-corporate

credit 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 a period of heightened

marketvolatility due to the economic impact of the

Russia-Ukraine conflict.

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

187Whitb read Annual Report and Accounts 2021/22

Governance Other informationStrategic report Financial statements

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 3 March 2022 for IAS 19 Employee Benefits purposes were:

3 March

2022

25 February

2021

Pre-April 2006 rate of increase in pensions in payment 3.40 3.10

Post-April 2006 rate of increase in pensions in payment 2.30 2.20

Pension increases in deferment 3.40 3.10

Discount rate 2.60 1.90

Inflation assumption 3.60 3.20

The mortality assumptions are based on standard mortality tables which allow for future mortality improvements.

The assumptions are that a member currently aged 65 will live on average for a further 20.0 years (2021: 20.5 years) if they

are male and for a further 22.6 years (2021: 23.1 years) if they are female. For a member who retires in 2041 at age 65, the

assumptions are that they will live on average for a further 21.1 years (2021: 21.5 years) after retirement if they are male and for a

further 23.8 years (2021: 24.3 years) after retirement if they are female.

During the year, the Group has 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:

2021/22

£m

2020/21

£m

Net interest on net defined benefit surplus (3.6) (3.0)

Administrative expense 2.6 2.7

Past service cost (GMP equalisation reserve) – 1.1

TOTAL (INCOME)/EXPENSE RECOGNISED IN THE CONSOLIDATED INCOME STATEMENT

(GROSS OF DEFERRED TAX) (1.0) 0.8

Amounts recognised in operating costs for past service costs or curtailment are £nil (2021: £1.1m).

The amounts taken to the consolidated statement of comprehensive income are as follows:

2021/22

£m

2020/21

£m

Actuarial gains (218.8) (130.2)

Return on plan assets (greater)/lower than discount rate (100.0) 146.5

REMEASUREMENT EFFECTS RECOGNISED IN OTHER COMPREHENSIVE INCOME (318.8) 16.3

The amounts recognised in the consolidated balance sheet are as follows:

2022

£m

2021

£m

Present value of defined benefit obligation (2,521.2) (2,804.3)

Fair value of scheme assets 3,043.8 2,992.3

SURPLUS RECOGNISED IN THE CONSOLIDATED BALANCE SHEET 522.6 188.0

Changes in the present value of the defined benefit obligation are as follows:

2021/22

£m

2020/21

£m

Opening defined benefit obligation 2,804.3 2,992.7

Interest cost 52.3 48.7

Past service cost to recognise additional liability in respect of guaranteed minimum pensions – 1.1

Remeasurement due to:

Changes in financial assumptions (266.0) 30.5

Changes in demographic assumptions (33.9) (70.6)

Experience adjustments 81.1 (90.1)

Benefits paid (116.5) (107.9)

Benefits settled by the Group in relation to an unfunded pension scheme

(0.1) (0.1)

CLOSING DEFINED BENEFIT OBLIGATION 2,521.2 2,804.3

Whitbread Annual Report and Accounts 2021/22 188

Notes to the Consolidated Financial Statements continued

32 RETIREMENT BENEFITS CONTINUED

Changes in the fair value of the scheme assets are as follows:

2021/22

£m

2020/21

£m

Opening fair value of scheme assets 2,992.3 3,183.0

Interest income on scheme assets 55.9 51.7

Return on plan assets greater/(lower) than discount rate

100.0 (146.5)

Contributions from employer

2.6 2.7

Additional contributions from Moorgate SLP

10.3 10.2

Investment manager expenses paid by the employer

1.8 1.8

Benefits paid (116.5) (107.9)

Administrative expenses (2.6) (2.7)

CLOSING FAIR VALUE OF SCHEME ASSETS 3,043.8 2,992.3

The major categories of plan assets are as follows:

2022 2021

Quoted

and pooled

£m

Unquoted

£m

Total

£m

Quoted and

pooled

£m

Unquoted

£m

Total

£m

Equities 76.4 – 76.4 75.5 – 75.5

Alternative assets 143.0 – 143.0 200.7 – 200.7

Bonds 164.6 3.2 167.8 196.5 5.1 201.6

Private markets – 460.7 460.7 – 403.1 403.1

Liability driven Investments

2,160.8 – 2,160.8 2,060.5 – 2,060.5

Cash and other

35.1 – 35.1 50.9 – 50.9

2,579.9 463.9 3,043.8 2,584.1 408.2 2,992.3

1 The total of these items equals the cash paid by the Group as per the consolidated cash flow statement. ‘Contributions from employer’ include contributions to cover

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

2022

£m

2021

£m

DISCOUNT RATE

1.00% increase to discount rate 359.0 421.0

1.00% decrease to discount rate (458.0) (546.0)

INFLATION

0.25% increase to inflation rate (73.0) (92.0)

0.25% decrease to inflation rate 72.0 90.0

LIFE EXPECTANCY

Additional one-year increase to life expectancy (126.0) (130.0)

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. 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.

189Whitbread Annual Report and Accounts 2021/22

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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

2021/22

Joint

ventures

£m

2020/21

Joint

ventures

£m

Sales to a related party 0.1 0.1

Joint ventures

For details of the Group’s investments in and loans to joint ventures, see Note 16.

Compensation of key management personnel (including directors):

2021/22

£m

2020/21

£m

Short-term employee benefits 8.4 6.2

Post-employment benefits – –

Share-based payments 3.9 5.1

12.3 11.3

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 (2021: £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

Property

On 7 March 2022, the Group entered into a forward funding transaction in relation to one property which was included within

assets classified as held for sale at the year end, receiving gross proceeds of £46.4m.

Whitbread Annual Report and Accounts 2021/22 190

Notes to the Consolidated Financial Statements continued

35 BUSINESS COMBINATIONS

Acquisition in 2020/21 – Foremost Hospitality Hiex GmbH

On 28 February 2020, the Group acquired 100% of the share capital of Foremost Hospitality Hiex GmbH for consideration

of £225.8m. The acquisition consisted of 13 trading hotels which were rebranded to Premier Inn as well as the leasehold for

afurther six pipeline sites. The transaction formed part of the Group’s strategic priority of international growth.

Trading hotel leases

In 2020/21, the Group recognised right-of-use assets and lease liabilities in relation to the 13 hotels which were rebranded.

Lease liabilities were recognised at the present value of future lease payments, using assumptions consistent with those of new

leases. Right-of-use assets were valued at an amount equal to the lease liability as the lease arrangements were considered to

be at market rates.

Pipeline hotel leases

Three of the pipeline sites were open and operated by a third party. The Group acquired the headlease for these sites and

subleased them. The Group recognised investment property and lease liabilities in relation to these sites. During the year, the

Group took over the operations of these sites and the investment property was transferred to right-of-use assets.

Contingent consideration

Contingent consideration was recognised at the date of acquisition and £62.6m were paid in instalments when the Group took

control of the operations of the pipeline hotels.

Subsequent to the acquisition, an impairment of the goodwill arising on acquisition was recorded (see Note 15).

Asset acquisition in 2020/21 – 13 hotels from Centro Hotel Group

On 1 December 2020, the Group completed the acquisition of 13 hotels from the Centro Hotel Group. The transaction was

accounted for as an asset acquisition under IFRS 3 Business Combinations as the fair value of the assets was concentrated in

a single group of similar assets. The transaction consisted of six open hotels and seven pipeline hotels which were due to open

between 2021 and 2023. On acquisition, the Group recognised right-of-use assets of £84.9m and lease liabilities of £77.2m in

relation to the open hotels. The Group had also committed to lease commitments of £202.4m in relation to the pipeline hotels.

Contingent consideration of £1.9m would become payable once handover of the pipeline sites is complete.

191Whitbread Annual Report and Accounts 2021/22

Governance Other informationStrategic report Financial statements

Contents

192 Company balance sheet

193 Company statement of changes in equity

194 Notes to the Company financial statements

WHITBREAD PLC

COMPANY ACCOUNTS 2021/22

Whitbread Annual Report and Accounts 2021/22 192

Notes

3 March

2022

£m

25 February

2021*

£m

NON-CURRENT ASSETS

Investment in subsidiaries 3 2,439.3 2,426.4

Other receivables 4 1,201.3 1,265.1

3,640.6 3,691.5

CURRENT ASSETS

Other receivables 4 100.0 –

100.0 –

TOTAL ASSETS 3,740.6 3,691.5

CURRENT LIABILITIES

Other payables 5 (13.5) (11.5)

(13.5) (11.5)

TOTAL LIABILITIES (13.5) (11.5)

NET ASSETS 3,727.1 3,680.0

EQUITY

Share capital 6 164.8 164.7

Share premium 7 1,024.7 1,022.9

Capital redemption reserve 7 50.2 50.2

Retained earnings 7 3,004.5 2,962.5

Treasury reserve 7 (517.1) (520.3)

TOTAL EQUITY 3,727.1 3,680.0

* The format of the company balance sheet has been changed (see Note 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 £32.3m (2020/21: £22.9m).

ALISON BRITTAIN CHIEF EXECUTIVE HEMANT PATEL CHIEF FINANCIAL OFFICER 27 April 2022

COMPANY BALANCE SHEET

Year ended 3 March 2022

Company number 04120344

193Whitb read Annual Report and Accounts 2021/22

Governance Other informationStrategic report Financial statements

capital

(Note 6)

£m

premium

(Note 7)

£m

Capital

redemption

reserve

(Note 7)

£m

Retained

earnings

(Note 7)

£m

Treasury

reserve

(Note 7)

£m

Total

£m

At 27 February 2020 112.9 90.8 50.2 2,932.3 ( 527.0) 2,659.2

Profit for the year – – – 22.9 – 22.9

Total comprehensive income – – – 22.9 – 22.9

Ordinary shares issued on exercise of employee share options 0.1 2.8 – – – 2.9

Ordinary shares issued on rights issue

51.7 929.3 – – – 981.0

Loss on ESOT shares issued – – – (6.7) 6.7 –

Accrued share–based payments – – – 14.0 – 14.0

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

1 The share premium amount of £929.3m is net of £28.2m in relation to transaction costs associated with the rights issue.

COMPANY STATEMENT

OF CHANGES IN EQUITY

Year ended 3 March 2022

Whitbread Annual Report and Accounts 2021/22 194

Notes to the Company financial statements

At 3 March 2022

1 BASIS OF ACCOUNTING

The financial statements of Whitbread PLC for the year ended 3 March 2022 were authorised for issue by the Board of

Directors on 27 April 2022. The financial year represents the 53 weeks to 3 March 2022 (prior financial year: 52 weeks to

25 February 2021).

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 current period the format of the Company Balance Sheet has been changed to align with the presentation of the

Consolidated Balance Sheet.

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.

195Whitbread Annual Report and Accounts 2021/22

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3 INVESTMENT IN SUBSIDIARY UNDERTAKINGS

INVESTMENTS AT COST

2022

£m

2021

£m

Opening investments 2,426.4 2,412.4

Contributions to subsidiaries in respect of share-based payments 12.9 14.0

CLOSING INVESTMENTS 2,439.3 2,426.4

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 to

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

2022

£m

2021

£m

Amounts due from subsidiary undertakings 1,301.3 1,265.1

1,301.3 1,265.1

Analysed as:

Current 100.0 –

Non-current 1,201.3 1,265.1

1,301.3 1,265.1

5 OTHER PAYABLES

2022

£m

2021

£m

Unclaimed dividends 6.0 6.1

Corporation tax payable 7.5 5.4

13.5 11.5

Whitbread Annual Report and Accounts 2021/22 196

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 (2021: 76.80P EACH)

million £m

At 27 February 2020 147.0 112.9

Issued on exercise of employee share options 0.1 0.1

Issued in rights issue 6 7. 3 51.7

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

Rights issue

In June 2020, the Company offered a fully underwritten rights issue to existing shareholders on the basis of one share for

every twofully paid ordinary shares held. The Company received acceptances in respect of 61,452,547 New Ordinary Shares,

representing 91.4% of the total New Ordinary Shares to be issued. The remaining 5,824,869 New Ordinary Shares for which

acceptances were not received were successfully placed at a price of 2,550p per New Ordinary Share.

As a result, a total of 67,277,416 ordinary shares with an aggregate nominal value of £51.7m were issued for cash consideration

of £1,009.2m. Transaction costs of £28.2m were incurred resulting in £929.3m being recognised in share premium and net cash

proceeds of £981.0m.

Employee share options

During the year, options over 0.1m (2020/21: 0.1m) ordinary shares, fully paid, were exercised by employees under the terms

ofvarious share option schemes. The Company received proceeds of £1.9m (2020/21: £2.9m) on exercise of these options.

Preference share capital

B shares C shares

ALLOTTED, CALLED UP AND FULLY PAID SHARES OF 1P EACH

(2021: 1P EACH)

million £m million £m

27 February 2020, 25 February 2021 and 3 March 2022 2.0 – 1.9 –

197Whitb read Annual Report and Accounts 2021/22

Other informationGovernanceStrategic report Financial statements

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 27 FEBRUARY 2020 12.5 514.5 1.0 12.5

Exercised during the year – – (0.6) (6.7)

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

Distributable reserves

As at 3 March 2022, Whitbread PLC had distributable reserves of £2,304.2m (2021: £2,271.9m).

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 £7.3m (2021: £11.1m).

Whitbread Annual Report and Accounts 2021/22 198

Notes to the Company financial statements continued

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

Ordinary EUR 50,000 – 100.0 100.0

Brickwoods Limited England

Ordinary £0.25 – 100.0 100.0

Duttons Brewery Limited England

Ordinary £1.00 – 100.0 100.0

Elm Hotel Holdings Limited England

Ordinary £0.10 – 100.0 100.0

Farringdon Scottish Partnership Scotland

N/A N/A N/A N/A

Healthy Retail Limited England

A ordinary £0.01 – 100.0 49.0

B ordinary £0.01 – – –

C ordinary £0.01 – – –

Milton (SC) 2 Limited Scotland

Ordinary £1.00 – 100.0 100.0

Milton (SC) Limited Scotland

Ordinary £1.00 – 100.0 100.0

Milton 1 Limited England

Ordinary £1.00 – 100.0 100.0

Moorgate Scottish Limited Partnership Scotland

N/A N/A N/A N/A

PI Hotels and Restaurants Ireland Limited Ireland

Ordinary EUR 1.00 – 100.0 100.0

Premier Inn (Bath Street) Limited Jersey

Ordinary £1.00 – 100.0 100.0

Premier Inn (Guernsey) Limited Guernsey

Ordinary £1.00 – 100.0 100.0

Premier Inn (Isle of Man) Limited Isle of Man

Ordinary £1.00 – 100.0 100.0

Premier Inn (Jersey) Limited Jersey

Ordinary £1.00 – 100.0 100.0

Premier Inn (UK) Limited England

Ordinary £1.00 – 100.0 100.0

Premier Inn Dortmund Königswall GmbH Germany

Ordinary EUR 25,000 – 100.0 100.0

Premier Inn Essen City Hauptbahnhof GmbH Germany

Ordinary EUR 25,000 – 100.0 100.0

Premier Inn Flensburg City GmbH Germany

Ordinary EUR 25,000 – 100.0 100.0

Premier Inn Frankfurt City Ostbahnhof GmbH Germany

Ordinary EUR 25,000 – 100.0 100.0

Premier Inn Frankfurt Eschborn GmbH Germany

Ordinary EUR 25,000 – 100.0 100.0

Premier Inn Glasgow Limited England

Ordinary £1.00 – 100.0 100.0

Premier Inn GmbH Germany

Ordinary EUR 25,000 – 100.0 100.0

Premier Inn Hamburg Nordanalstrasse GmbH Germany

Ordinary EUR 25,000 – 100.0 100.0

Premier Inn Holding GmbH Germany

Ordinary EUR 25,000 – 100.0 100.0

Premier Inn Hotel GmbH Germany

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

Ordinary £1.00 – 100.0 100.0

Premier Inn Hotels LLC United Arab

Emirates

Ordinary AED 1,000 – 49.0 49.0

Premier Inn Hotels Qatar Qatar

Ordinary QAR 100.00 – 24.0 24.0

Premier Inn International Development Limited England

Ordinary £1.00 – 100.0 100.0

Premier Inn Manchester Airport Limited England

Ordinary £1.00 – 100.0 100.0

Premier Inn Manchester Trafford Limited England

Ordinary £1.00 – 100.0 100.0

Premier Inn Mannheim Quadrate T1 GmbH Germany

Ordinary EUR 25,000 – 100.0 100.0

Premier Inn München Frankfurter Ring GmbH Germany

Ordinary EUR 25,000 – 100.0 100.0

Premier Inn Ochre Limited England

Ordinary £1.00 – 100.0 100.0

Premier Inn Rostock City Hafen GmbH

(formerly UNA 344. Equity Management GmbH)

Germany

Ordinary EUR 25,000 – 100.0 100.0

Premier Inn Stuttgart Feuerbach GmbH Germany

Ordinary EUR 25,000 – 100.0 100.0

199Whitbread Annual Report and Accounts 2021/22

Other informationGovernanceStrategic report Financial statements

9 RELATED PARTIES CONTINUED

Active 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)

Premier Inn Verwaltungsgesellschaft Süd GmbH

(formerly: Acom Hotelbetriebs- und

VerwaltungsGmbH)

Germany

Ordinary EUR 50,000 – 100.0 100.0

Premier Inn Westminster Limited England

Ordinary £1.00 – 100.0 100.0

Premier Travel Inn India Limited England

Ordinary £1.00 – 100.0 100.0

PT. Whitbread Indonesia Indonesia

Ordinary USD 1.00 – 100.0 100.0

PTI Middle East Limited United Arab

Emirates

Ordinary AED 1,000 – 100.0 100.0

Silk Street Hotels Limited England

Deferred £1.00 – 100.0 99.1

Ordinary USD 0.01 – 100.0 0.1

St Andrews Homes Limited England

Ordinary £1.00 – 100.0 100.0

Swift Hotels Limited England

Ordinary £1.00 – 100.0 99.9

Preference £5.00 – 100.0 0.1

T.F. Ashe & Nephew Limited England

Deferred £1.00 – 100.0 99.9

Ordinary £0.01 – 100.0 0.1

UNA 312. Equity Management GmbH Germany

Ordinary EUR 25,000 – 100.0 100.0

UNA 352. Equity Management GmbH Germany

Ordinary EUR 25,000 – 100.0 100.0

Whitbread Asia Pacific Private Limited Singapore

Ordinary SGD 1.00 – 100.0 100.0

Whitbread East Pennines Limited England

Ordinary £1.00 – 100.0 100.0

Whitbread Group PLC England

Ordinary £0.25 100 – 50.0

A ordinary £0.25 100 – 50.0

Whitbread Hotel Company Limited England

Ordinary £0.10 – 100.0 100.0

Whitbread International Sourcing Business

Services (Shanghai) Co., Ltd

China

Ordinary RMB 1.00 – 100.0 100.0

Whitbread Properties Limited England

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

Ordinary £1.00 – 100.0 100.0

WHRI Development DMCC United Arab

Emirates

Ordinary AED 1,000 – 100.0 100.0

WHRI Holding Company Limited England

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

Ordinary £1.00 – 100.0 100.0

Alastair Campbell & Company Limited Scotland

Ordinary £1.00 – 100.0 100.0

Archibald Campbell Hope & King Limited Scotland

Ordinary £1.00 – 100.0 100.0

Autumn Days Limited England

Ordinary £1.00 – 100.0 100.0

Belgrave Hotel Limited England

Ordinary £1.00 – 100.0 100.0

Belstead Brook Manor Hotel Limited England

Ordinary £1.00 – 100.0 100.0

Brewers Fayre Limited England

Ordinary £1.00 – 100.0 100.0

Britannia Inns Limited England

Ordinary £1.00 – 100.0 100.0

Broughton Park Hotel Limited England

Ordinary £1.00 – 100.0 100.0

Whitbread Annual Report and Accounts 2021/22 200

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)

Carpenters of Widnes Limited England

Ordinary £0.01 – 100.0 100.0

Deferred ordinary £1.00 – 100.0 100.0

Cherwell Inns Limited England

A ordinary non-voting

£1.00

– 100.0 66.7

Ordinary £1.00 – 100.0 33.3

Chiswell Overseas Limited England

Ordinary £1.00 – 100.0 100.0

Chiswell Properties Limited England

Ordinary £1.00 – 100.0 100.0

Churchgate Manor Hotel Limited England

Ordinary £1.00 – 100.0 100.0

Country Club Hotels Limited England

Ordinary £1.00 – 100.0 100.0

Cromwell Hotel (Stevenage) England

Ordinary £1.00 – 100.0 100.0

Cymric Hotel Company Limited England

Ordinary £1.00 – 100.0 100.0

Danesk Limited Scotland

Ordinary £1.00 – 100.0 100.0

David Williams (Builth) Limited England

Ordinary £1.00 – 100.0 100.0

Dealend Limited England

Ordinary £1.00 – 100.0 100.0

Delamont Freres Limited England

Ordinary £1.00 – 100.0 100.0

Delaunay Freres Limited England

Ordinary £1.00 – 100.0 100.0

Dome Restaurants Limited England

Ordinary £1.00 – 100.0 100.0

Dragon Inns and Restaurants Limited England

Ordinary £1.00 – 100.0 100.0

Dukes Head 1988 Limited England

B ordinary £1.00 – 100.0 100.0

W ordinary £1.00 – 100.0 100.0

E. Lacon & Co., Limited England

Ordinary £1.00 – 100.0 100.0

E.B. Holdings Limited England

Ordinary £1.00 – 100.0 100.0

Evan Evans Bevan Limited England

Ordinary £1.00 – 100.0 100.0

Finite Hotel Systems Limited England

A ordinary £1.00 – 100.0 50.0

B ordinary £1.00 – 100.0 50.0

Fleet Wines & Spirits Limited England

Ordinary £1.00 – 100.0 100.0

Forest of Arden Golf and Country Club Limited England

Ordinary £1.00 – 100.0 100.0

Gable Care Limited England

Ordinary £1.00 – 100.0 100.0

Goodhews (Castle) England

A ordinary £1.00 – 100.0 51.0

Ordinary £1.00 – 100.0 49.0

Goodhews (Holdings) Limited England

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

Ordinary £1.00 – 100.0 100.0

Goodhews (Restaurants) England

Ordinary £1.00 – 100.0 100.0

Goodhews B. & S. Limited England

Ordinary £1.00 – 100.0 100.0

Goodhews Enterprises England

Ordinary £1.00 – 100.0 100.0

Goodhews Limited England

Ordinary £1.00 – 100.0 100.0

Gough Brothers Limited England

Deferred ordinary £.0.20 – 100.0 97.6

Ordinary £0.20 – 100.0 2.4

Grosvenor Leisure Limited England

Ordinary £1.00 – 100.0 100.0

Hammock Limited England

Ordinary £1.00 – 100.0 100.0

Hart & Co., (Boats) Limited England

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

A ordinary £1.00 – 100.0 70.0

B ordinary £1.00 – 100.0 30.0

9 RELATED PARTIES CONTINUED

Dormant related undertakings continued

201Whitbread Annual Report and Accounts 2021/22

Other informationGovernanceStrategic report Financial statements

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)

Hunter & Oliver Limited England

Ordinary £1.00 – 100.0 100.0

J. Burton (Warwick) Limited England

Ordinary £1.00 – 100.0 100.0

J. J. Norman and Ellery Limited England

Ordinary £1.00 – 100.0 100.0

James Bell and Company Limited England

Deferred ordinary £0.25 – 100.0 96.2

Ordinary £0.01 – 100.0 3.8

Jestbread Limited England

Ordinary £1.00 – 100.0 100.0

Kingsmills Hotel Company Limited Scotland

Ordinary £1.00 – 100.0 100.0

Lambtons Ale Limited England

Ordinary £1.00 – 100.0 100.0

Latewise Limited England

Ordinary £1.00 – 53.4 53.4

Lawnpark Limited England

Ordinary £1.00 – 100.0 100.0

Leisure and Retail Resources Limited England

Ordinary £1.00 – 99.6 99.6

Lloyds Avenue Catering Limited England

3% non-cumulative

preference £1.00

– 100.0 50.0

Ordinary £1.00 – 100.0 50.0

London International Hotel Limited England

Ordinary £1.00 – 100.0 100.0

Lorimer & Clark, Limited Scotland

Ordinary £1.00 – 100.0 100.0

Mackeson & Company Limited England

Ordinary £1.00 – 100.0 100.0

Mackies Wine Company Limited England

Ordinary £1.00 – 100.0 100.0

Maredrove Limited England

Ordinary £1.00 – 100.0 100.0

Marine Hotel Porthcawl Limited England

Ordinary £1.00 – 100.0 100.0

Marlow Catering Limited England

Ordinary £1.00 – 100.0 100.0

Meon Valley Golf and Country Club Limited England

Ordinary £1.00 – 100.0 100.0

Milton 2 Limited England

Ordinary £1.00 – 100.0 100.0

Morans of Bristol Limited England

Ordinary £1.00 – 100.0 100.0

Morris’s Wine Stores Limited England

Ordinary £1.00 – 100.0 5.4

5.6% non-cumulative

preference £1.00

– 100.0 94.6

New Clapton Stadium Company Limited England

Ordinary £0.05 – 100.0 100.0

Norseman Lager Limited England

Ordinary £1.00 – 100.0 100.0

Pacific Caledonian Properties Limited Scotland

Ordinary £1.00 – 100.0 100.0

Percheron Properties Limited England

Ordinary £1.00 – 100.0 100.0

Peter Dominic Limited England

Ordinary £1.00 – 100.0 100.0

PI Hotels York Limited England

Ordinary £1.00 – 100.0 100.0

Piquant Caterers Limited England

Ordinary £1.00 – 100.0 100.0

Pizzaland Limited England

Ordinary £1.00 – 100.0 100.0

Premier Inn Kier Limited England

A ordinary £1.00 – – –

B ordinary £1.00 – 100.0 50.0

Premier Inn Limited England

Ordinary £1.00 – 100.0 100.0

Premier Inn Troon Limited England

Ordinary £1.00 – 100.0 100.0

Priory Leisure Limited England

Ordinary £1.00 – 100.0 100.0

R.C. Gough and Co. Limited England

Ordinary £1.00 – 100.0 100.0

Raybain (Northern) Limited England

Ordinary £1.00 – 100.0 100.0

Raybain (Wine Bars) Limited England

Ordinary £1.00 – 100.0 100.0

Respotel Limited England

Ordinary £1.00 – 100.0 100.0

Rhymney Breweries Limited England

Ordinary £1.00 – 100.0 100.0

S & S Property Limited England

Ordinary £1.00 – 100.0 100.0

S.H. Ward & Company Limited England

Ordinary £1.00 – 100.0 100.0

Salford Automatics Limited England

Ordinary £1.00 – 100.0 100.0

Whitbread Annual Report and Accounts 2021/22 202

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)

Scorechance 1 Limited England

Ordinary £1.00 – 100.0 100.0

Scorechance 12 Limited England

Ordinary £1.00 – 100.0 100.0

Scorechance 17 Limited England

Ordinary £1.00 – 100.0 100.0

Scorechance 25 Limited England

Ordinary £1.00 – 100.0 100.0

Scorechance 8 Limited England

Ordinary £1.00 – 100.0 100.0

Sheffield Automatics Limited England

Ordinary £1.00 – 100.0 100.0

Shewell Limited England

Ordinary £1.00 – 100.0 100.0

Silk Street Hotel Liverpool Limited England

Ordinary £1.00 – 100.0 100.0

Small & Co. (Engineering) Limited England

Ordinary £1.00 – 100.0 100.0

Small & Co. Limited England

7% cumulative preference

£1.00

– 100.0 0.7

Ordinary £1.00 – 100.0 99.3

Spring Soft Drinks Limited England

Ordinary £1.00 – 100.0 100.0

Sprowston Manor Hotel Limited England

Ordinary £1.00 – 100.0 100.0

Square October 1 Limited England

Ordinary £1.00 – 100.0 100.0

Square October 2 Limited England

Ordinary £1.00 – 100.0 100.0

Square October 3 Limited England

Ordinary £1.00 – 100.0 100.0

St Andrews Homes (1995) Limited England

Ordinary £1.00 – 100.0 100.0

St Martins Care Homes Investments Limited England

Ordinary £1.00 – 100.0 100.0

Stoneshell Limited England

Ordinary £1.00 – 100.0 100.0

Stripe Travel Inn Limited England

Ordinary £1.00 – 100.0 100.0

Strong and Co. of Romsey Limited England

Ordinary £1.00 – 100.0 100.0

Summerfields Care Limited England

Ordinary £1.00 – 100.0 100.0

Sun Taverns Limited England

Ordinary £1.00 – 100.0 100.0

Sweetings (Chop House) Limited England

Ordinary £1.00 – 100.0 100.0

Swift (Lurchrise) Limited England

Ordinary £1.00 – 100.0 100.0

Swift Hotels (1995) Limited England

Ordinary £1.00 – 100.0 100.0

Swift Hotels (Management) Limited England

Ordinary £1.00 – 100.0 100.0

Swift Inns and Restaurants Limited England

Ordinary £1.00 – 100.0 100.0

Swift Profit Sharing Scheme Trustees Limited England

Ordinary £1.00 – 100.0 100.0

Swift Quest Limited England

Ordinary £1.00 – 100.0 100.0

Swingbridge Hotel Limited England

Ordinary £1.00 – 100.0 100.0

Tewkesbury Park Golf and Country Club Limited England

Ordinary £1.00 – 100.0 100.0

The Barcave Group Limited England

7% cumulative preference

£1.00

– 100.0 90.9

Ordinary £1.00 – 100.0 9.1

The Dominic Group Limited England

Ordinary £1.00 – 100.0 100.0

The Four Seasons Hotel Investments Limited England

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

Ordinary £1.00 – 100.0 100.0

The Four Seasons Hotel Limited England

Ordinary £1.00 – 100.0 100.0

The Oyster Spa Company Limited England

Ordinary £1.00 – 100.0 100.0

9 RELATED PARTIES CONTINUED

Dormant related undertakings continued

203Whitb read Annual Report and Accounts 2021/22

Other informationGovernanceStrategic report Financial statements

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)

The Portsmouth and Brighton United

Breweries, Limited

England

Ordinary £0.25 – 100.0 100.0

Thomas Wethered & Sons Limited England

Ordinary £1.00 – 100.0 100.0

Threlfalls (Liverpool & Birkenhead) Limited England

Ordinary £1.00 – 100.0 100.0

Threlfalls (Salford) Limited England

Ordinary £1.00 – 100.0 100.0

Trentrise Limited England

Ordinary £1.00 – 100.0 100.0

Uncle Sam’s Limited England

Ordinary £1.00 – 100.0 100.0

Virlat Limited England

Ordinary £1.00 – 100.0 100.0

W. M. Darley, Limited England

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

Deferred £1.00 – 100.0 99.0

Ordinary £0.01 – 100.0 1.0

West Country Breweries Limited England

Ordinary £1.00 – 100.0 100.0

Wentworth Guarantee Company Limited England

N/A N/A N/A N/A

Wheeler Gate Limited England

Ordinary £1.00 – 100.0 100.0

Whitbread (Condor) Holdings Limited England

Ordinary £0.0001 – 100.0 100.0

Whitbread (G.C.) Limited England

Ordinary £1.00 – 100.0 100.0

Whitbread Company Two Limited England

Ordinary £1.00 – 100.0 100.0

Whitbread Developments Limited England

Ordinary £1.00 – 100.0 100.0

Whitbread Devon Limited England

Ordinary £1.00 – 100.0 100.0

Whitbread Directors 1 Limited England

Ordinary £0.05 – 100.0 100.0

Whitbread Directors 2 Limited England

Ordinary £1.00 – 100.0 100.0

Whitbread Dunstable Limited England

Ordinary £1.00 – 100.0 100.0

Whitbread Enterprise Centre Limited England

Ordinary £1.00 – 100.0 100.0

Whitbread Finance PLC England

Ordinary £1.00 – 100.0 100.0

Whitbread Fremlins Limited England

Ordinary £1.00 – 100.0 100.0

Whitbread Golf and Country Club Limited England

5% non-cumulative

preference £1.00

– 100.0 45.0

A ordinary £1.00 – 100.0 55.0

Whitbread Golf Club Limited England

Ordinary £1.00 – 100.0 100.0

Whitbread Guarantee Company Two Limited England

N/A N/A N/A N/A

Whitbread Healthcare Trustees Limited England

Ordinary £1.00 – 100.0 100.0

Whitbread Hotel (Bournemouth) Limited England

Ordinary £0.05 – 100.0 100.0

Whitbread Hotels (Management) Limited England

Deferred £1.00 – 100.0 100.0

USD 0.01 – 100.0 –

Whitbread International Limited England

Ordinary £1.00 – 100.0 100.0

Whitbread International Trading Limited England

Ordinary £0.25 – 100.0 100.0

Whitbread Investment Company Limited England

Ordinary £1.00 – 100.0 100.0

Whitbread Investment Company Securities

Limited

England

Ordinary £1.00 – 100.0 100.0

Whitbread London Limited England

Ordinary £1.00 – 100.0 100.0

Whitbread Nominees Limited England

Ordinary £1.00 – 100.0 100.0

Whitbread Pension Trustee Directors

Company Limited

England

N/A N/A N/A N/A

Whitbread Pension Trustees England

Ordinary £1.00 – 100.0 100.0

Whitbread Pub and Bars Limited England

Ordinary £1.00 – 100.0 100.0

Whitbread Pub Partnership Limited England

Ordinary £1.00 – 100.0 100.0

Whitbread Pub Restaurants Business Limited England

Ordinary £1.00 – 100.0 100.0

9 RELATED PARTIES CONTINUED

Dormant related undertakings continued

Whitbread Annual Report and Accounts 2021/22 204

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)

Whitbread Quest Trustee Limited England

Ordinary £1.00 – 100.0 100.0

Whitbread Restaurants (Australia) Limited England

Ordinary £1.00 – 100.0 –

Ordinary £0.56 – 100.0 100.0

Whitbread Restaurants Limited England

Ordinary £1.00 – 100.0 100.0

Whitbread Scotland Limited Scotland

Ordinary £1.00 – 100.0 100.0

Whitbread Secretaries Limited England

Ordinary £0.05 – 100.0 50.0

4% preference £0.05 – 100.0 50.0

Whitbread Share Ownership Trustees Limited England

N/A N/A N/A N/A

Whitbread Spa Company Limited England

Ordinary £1.00 – 100.0 100.0

Whitbread Sunderland (1995) Limited England

Ordinary £1.00 – 100.0 100.0

Whitbread Sunderland 2 Limited England

Ordinary £1.00 – 100.0 57.0

5.6% non-cumulative

preference £1.00

– 100.0 43.0

Whitbread Sunderland Limited England

Ordinary £5.00 – 100.0 50.0

Preference £5.00 – 100.0 50.0

Whitbread Trafalgar Properties Limited England

A ordinary £1.00 – 100.0 50.0

B ordinary £1.00 – 100.0 50.0

Whitbread UK Limited England

Ordinary £1.00 – 100.0 100.0

Whitbread Wales Limited England

Ordinary £1.00 – 100.0 100.0

Whitbread Wessex Limited England

Ordinary £1.00 – 100.0 100.0

White Cross Films Limited England

Ordinary £1.00 – 100.0 100.0

Wiggin Tree Limited England

Ordinary £1.00 – 100.0 100.0

Willhouse Limited England

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

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

9 RELATED PARTIES CONTINUED

Dormant related undertakings continued

205Whitbread Annual Report and Accounts 2021/22

Other informationGovernanceStrategic report Financial statements

Glossary

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 liability payments 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.

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.

Whitbread Annual Report and Accounts 2021/22 206

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 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

Adjusted*

revenue

Revenue Adjusting items Revenue adjusted to exclude the TSA income.

Reconciliation: Consolidated income statement

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 2021/22 2020/21

UK Accommodation sales (£m) 1,157.8 388.5

Number of rooms occupied by guests ('000) 20,430 8,415

UK AVERAGE ROOM RATE (£) 56.67 46.16

Germany Accommodation sales (£m) 29.1 10.2

Number of rooms occupied by guests ('000) 718 255

GERMANY AVERAGE ROOM RATE (£) 40.53 40.17

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 2021/22 2020/21

UK like-for-like revenue growth 189.8% (70.9%)

Contribution from net new hotels 8.2% 0.5%

UK ACCOMMODATION SALES GROWTH 198.0% (70.4%)

Two year UK

like-for-like

revenue growth

Movement in

accommodation

sales per segment

information (Note

Accommodation

sales from non

like-for-like

Change in revenue for outlets open for at least two 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 2021/22

UK like-for-like revenue growth (15.5%)

Contribution from net new hotels 3.8%

UK ACCOMMODATION SALES GROWTH (11.7%)

207

Whitbread Annual Report and Accounts 2021/22

Governance Financial statements Other informationStrategic report

APM

Closest equivalent

IFRS measure

Adjustments to

reconcile to IFRS

measure Definition and purpose

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 2021/22 2020/21

UK Accommodation sales (£m) 1,157.8 388.5

Available rooms ('000) 29,928 28,620

UK REVPAR (£) 38.69 13.57

Germany Accommodation sales (£m) 29.1 10.2

Available rooms ('000) 1,765 1,135

GERMANY REVPAR (£) 16.49 9.02

INCOME STATEMENT MEASURES

Adjusted*

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* tax Tax charge/credit Adjusting items

(Note 6)

Tax charge/credit before adjusting items.

Reconciliation: Consolidated income statement

Adjusted* profit/

(loss) before tax

Profit/loss before

tax

Adjusting items

(Note 6)

Profit/loss before tax and adjusting items.

Reconciliation: Consolidated income statement

Adjusted* basic

EPS

Basic EPS Adjusting items

(Note 6)

Adjusted profit/loss 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

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

2021/22

£m

2020/21

£m

Net (cash)/debt (140.5) 46.5

Restricted cash adjustment 10.0 10.0

ADJUSTED NET (CASH)/DEBT (130.5) 56.5

Whitbread Annual Report and Accounts 2021/22 208

Alternative performance measures continued

APM

Closest equivalent

IFRS measure

Adjustments to

reconcile to IFRS

measure Definition and purpose

BALANCE SHEET MEASURES

Lease adjusted

net 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

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

2021/22

£m

2020/21

£m

Adjusted net (cash)/debt (130.5) 56.5

Lease debt 1,884.7 1,771.0

LEASE ADJUSTED NET DEBT 1,754.2 1,827.5

Net cash/debt

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

2021/22

£m

2020/21

£m

Net (cash)/debt (140.5) 46.5

Lease liabilities 3,701.8 3,231.6

NET (CASH)/DEBT AND LEASE LIABILITIES 3,561.3 3,278.1

CASH FLOW MEASURES

Funds from

operations

(FFO)

Net cash flows

from operating

activities

Refer to

definition

Net cash flows from operating activities after deducting payment of

principal of lease liabilities and adding back changes in working capital,

adjusted property rent and cash interest.

A comparative is not disclosed as while the Group's covenant waivers were

in place, FFO was not considered to be a key alternative performance

measure.

RECONCILIATION

2021/22

£m

Net cash flow from operations 508.7

Payment of principal of lease liabilities (127.1)

Working capital movements (182.5)

Cash interest 18.0

Adjusted property rent 235.6

FUNDS FROM OPERATIONS 452.7

Lease adjusted

net debt to FFO

No direct

equivalent

Refer to

definition

Ratio of lease-adjusted net debt compared to FFO.

A comparative is not disclosed as while the Group's covenant waivers were

in place, lease adjusted net debt to FFO was not considered to be a key

alternative performance measure.

RECONCILIATION

2021/22

£m

Lease adjusted net debt 1,754.2

Funds from operations 452.7

LEASE ADJUSTED NET DEBT TO FFO 3.9x

209

Whitbread Annual Report and Accounts 2021/22

Governance Financial statements Other informationStrategic report

APM

Closest equivalent

IFRS measure

Adjustments to

reconcile to IFRS

measure Definition and purpose

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 and shareholder

returns and before tax, pension and interest payments.

RECONCILIATION

2021/22

£m

2020/21

£m

Adjusted operating profit/(loss) 153.3 (486.7)

Depreciation – right-of-use assets 148.1 126.3

Depreciation – property, plant and equipment 157.9 150.3

Amortisation 20.9 23.6

ADJUSTED EBITDA (POST-IFRS 16) 480.2 (186.5)

Interest paid – lease liabilities (133.2) (123.2)

Payment of principal of lease liabilities (127.1) (71.7)

Lease incentives received/(paid) 2.0 (7.3)

Movement in working capital 182.5 (99.8)

OPERATING CASH FLOW 404.4 (488.5)

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, adding net cash proceeds on

acquisitions and capital contributions to joint ventures.

OTHER MEASURES

Adjusted*

EBITDA (post-

IFRS 16),

Adjusted*

EBITDA (pre-

IFRS 16) and

Adjusted*

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 this measure to be useful as it is a commonly used

industry metric which facilitate comparison between companies. The

Group's RCF covenants include measures based on Adjusted EBITDA

(pre-IFRS 16).

RECONCILIATION

2021/22

£m

2020/21

£m

Adjusted operating profit/(loss) 153.3 (486.7)

Depreciation – right-of-use assets 148.1 126.3

Depreciation – property, plant and equipment 157.9 150.3

Amortisation 20.9 23.6

ADJUSTED EBITDA (POST-IFRS 16) 480.2 (186.5)

Variable lease payment expense/(credit) 0.3 (0.6)

Rental income (7.9) (7.8)

ADJUSTED EBITDAR 472.6 (194.9)

Rental expense, variable lease payments and rental

income (230.7) (216.5)

ADJUSTED EBITDA (PRE-IFRS 16) 241.9 (411.4)

Return on

Capital

Employed

(ROCE)

No direct

equivalent

Refer to

definition

Adjusted operating profit (pre-IFRS 16) for the year divided by net assets

at the balance sheet date, adding back net debt, 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.

Return on capital is not disclosed and a reconciliation is therefore notincluded.

* 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.

Whitbread Annual Report and Accounts 2021/22 210

Shareholder services

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

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

conditions of the nominee provider as to whether underlying

shareholders receive copies of the 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 new CSN 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 2022

The AGM will take place at 2pm on Wednesday 15 June 2022

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.

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.

211Whitbread Annual Report and Accounts 2021/22

Governance Financial statements Other informationStrategic report

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 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

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.

Analysis of ordinary shares at 3 March 2022

Band Number of holders % of holders Number of shares % of share capital

1-100 19,834 54.77 684,966 0.32

101-200 5,539 15.30 807,309 0.38

201-500 5,709 15.76 1,845,005 0.86

501-1,000 2,533 6.95 1,779,794 0.83

1,001-2,000 1,189 3.28 1,635,124 0.76

2,001-5,000 582 1.61 1,806,799 0.84

5,001-10,000 184 0.51 1,282,880 0.60

10,001-50,000 314 0.87 6,977,269 3.25

50,001-100,000 103 0.28 7,405,157 3.45

100,001-500,000 152 0.42 35,623,295 16.61

500,001-1,000,000 34 0.09 25,534,781 11.91

1,000,001-5,000,000 36 0.10 71,070,627 33.14

5,000,001-10,000,000 3 0.01 19,816,368 9.24

10,000,001-50,000,000 3 0.01 38,200,568 17.81

Total 36,215 214,469,942

Whitbread Annual Report and Accounts 2021/22 212

Shareholder services continued

Consultancy, design and production

www.luminous.co.uk

Design and production

www.luminous.co.uk

Printed by Park Communications

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