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 reportGovernanceFinancial statementsOther information
1 YouGov Brand Index Quality & Value scores as at 3 March 2022 based on a nationally representative 52 week moving average.
YOUGOV BRANDINDEX
1
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.
1
Market-leading direct
digitaldistribution
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
ofretention.
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.
Ourefficiency 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.
2
3
4
5
67
0510152535
45
203040
0
5
10
15
20
25
30
35
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 PURPOSEOUR VISION
Whitbread Annual Report and Accounts 2021/2222
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,
alarge proportion of our incremental sales convert to profit.
Thebusiness can leverage its network to drive economies
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 reportGovernanceFinancial statementsOther 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.
Cashflow before shareholder returns/receipts and debt repayments187.0 (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 borrowings303.9 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
£mFacilityUtilisedMaturity
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 equivalents1,132.4
Total facilities utilised, net of cash
1
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
2
/EBITDA
2
< 3.5x,
›EBITDA
2
/Interest
2
>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.
Nocorporation tax was paid in relation to UK profits due
totaxable 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
nooutstanding US private placements. Net cash at the end of
theperiod was £140.5m.
Whitbread Annual Report and Accounts 2021/2232
Chief Financial Officer’s Review continued
The Revolving Credit Facility which is currently £850.0m,
willstep 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.
Thereare now no outstanding US private placements.
Capital investment
£mFY22FY21
UK maintenance and product
improvement91.368.6
New/extended UK hotels
1
79.763.2
Germany and Middle East
2
90.098.8
Total261.0230.6
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 mixOpen estate
Total estate
including
pipeline
Premier Inn UK58%:42%55%:45%
Premier Inn Germany26%:74%23%:77%
Group56%: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
FY22FY21FY20vs FY21vs FY20
Operating costs before depreciation, amortisation and rent(31.3)(26.2)(27.1)(19.5)%(15.5)%
which can support our teams and line managers any time
and in multiple languages.
What is next for Diversity and Inclusion
commitments withinWhitbread?
RH
Our Diversity and Inclusion commitments have given
usaclear focus since they were launched in 2020, and
Iamproud 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,
foranyone, 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
comingyear?
CV
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 trialsof new
technology across the estate to help shape ourglide 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.
RH
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
theUK and Germany. Since I joined Whitbread I have met
somany of our teams who have passion for hospitality,
andIknow that our teams are excited to get back to doing
what they love – serving our guests and helping them create
special moments.
39
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As a large business we know that every small action can add
upto 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
anynegative 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
OPPORTUNITY
TARGETPROGRESS AGAINST TARGETS IN 2021/22
We will be for everyone, championing inclusivity and
drivingdiversity
To have greater diversity in our leadership population,
withatarget of 8% ethnic minority and 40% female
representation by 2023
42%
Female representation, an increase of 5% from last year
5%
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
viewshelp inform decision making
Continued progress – more detail can be found on page 42.
We will support the physical and mental wellbeing
ofourteams
Continued progress – more detail can be found on page 43.
Whitbread Annual Report and Accounts 2021/2240
2021/22 ANNUAL REPORT
SUSTAINABILITYTARGETS
Force for Good
2021/22 ANNUAL REPORT
SUSTAINABILITYTARGETS
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
Wewant to be as diverse as the communities we serve,
andcreate an environment for ourteams 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 todate, 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 to10%, 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
andGLOW 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,
witha 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
canpromote 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
anaccessible 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
areinclusive 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
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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
boththe 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
aForce 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
andadjustments in their daily work.
Our Employee Forum; which we call Our Voice, is made up
offormally 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, tounderstand business challenges
from the perspective of ourteams and to ensure that ‘employee
voice’ helps shape decisions that solve those challenges.
In May 2021, the Our Voice representatives had a pivotal role
insupporting 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
ouroffices 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
ouractivity 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
Ican 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
toserve 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
thoseon programmes. We hope that many will transition to
permanent employment with us at the end of their programme.
Whitbread Annual Report and Accounts 2021/2242
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
totalto54 mental health first aiders and 86 trained
mentalhealth champions
›Listened to our teams about wellbeing and what is
importantto them
›Invested £150,000 in Hardship Grants, delivered through
ourpartnership 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
andOur Voice representative
I decided to put myself forward as an Our Voice
representative because I have a passion for creating
asafe, happy and efficient working environment for
ourteams. 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 ourhard-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
ourteams 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
choiceand 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
allour 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
listeninggroups 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
StuttgartFeuerbach
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
ofher 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
COMMUNITY
TARGETPROGRESS AGAINST TARGETS IN 2021/22
We will raise £20m for
Great Ormond Street HospitalChildren’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
andBrewers 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.
Since2012, 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,
wesaw 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 2021/2244
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
ofguest 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
withan 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
70sites all over the country. The local sites are partly
financed by local authorities and the contribution
receivedfrom 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
adaily healthy meal at their local site.
Since the partnership began, the teams have raised
€25,000. This has been raised through a combination
ofemployee donations and the Housekeeping Initiative;
ifa 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
OURNEW
CHARITYPARTNER
IN GERMANY
45Whitbread Annual Report and Accounts 2021/22
Strategic reportGovernanceFinancial statementsOther information
Always operating in a way that respects people and the planet.
RESPONSIBILITY
RESPONSIBILITY
TARGETPROGRESS AGAINST TARGETS IN 2021/22
Whitbread’s critical commodities 100%
accreditedagainstrobuststandards
100%
of whole shell egg and 52.6% of our ingredient
eggshavecage 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
againstForceforGoodcriteria
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
championwater stewardship within high-risk areas
62,000m
3
of water saved through internal water auditing
andsupplypipe leak detection – the equivalent
of25Olympicswimming 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 aone-off application and whose
removal would not lead to unintended negative environmental consequences, such as increased waste or CO
2
emissions.
† Scope 1 and 2 emissions.
Whitbread Annual Report and Accounts 2021/2246
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
forwardfrom 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 ourengagement 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
dueto COVID-19 related restrictions, but we are continuing
toreduce our emissions through energy saving strategies
andemploying 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
westarted 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. Todate 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
ledto 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 thefull report
onwww.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 inScotland to community food kitchens run by
social housing estate residents in Wales. Emma Brown,
Commercial Manager at FareShare, says: "We receive
arange of good quality food from Whitbread,
includingmeat and dairy, which enables the charities
andcommunity groups we work with to provide
nutritiousfood 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
arethe 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
bethe 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
aconstruction-sector engagement programme that we ran.
Itaimed to identify root cause issues of modern slavery in the
construction industry in order to create a wider opportunity
tomitigate 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 reportGovernanceFinancial statementsOther information
Preparingour 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
alreadybeing done against the recommendations of the TCFD.
This year we are proud to have published our first full report
underthose 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
theNetwork for Greening the Financial System (NGFS),
aconsortium 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
increaseSummary
Orderly
Transition
1.5-2°CDecisive global
policy action is
taken to limit
global warming
from early 2020s.
Disorderly
Transition
1.5-3°CPolicy 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
andour opportunities in our business.
This process demonstrated no material concern in the short
(0-2years) 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
onthe 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
onthenextpage and can read the full report at
www.whitbread.com/governance/reports-policies.
Whitbread Annual Report and Accounts 2021/2248
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 orif crops/ingredients are particularly
susceptible to temperature variations and extremes. Climate change haspotential 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, increasedcost/
complexity/timeframes involved in the planning process such as BREEAM requirement forExcellent, zero emissions at point of
use legislation for new space being introduced (for example: no gas, noF-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
ofincreasedcosts associated with overseas travel.
Ability to capitalise on trend towards veganism/vegetarianism by further expanding menu options to cater to this growing
segmentof the market.
Attract more customers who are focused on climate change – align brand proposition to climate friendly offering to
maintainandgrow market share, e.g. ‘net negative carbon rooms’, ‘net negative carbon beds’, eco-friendly hotels etc.
Travelmanagement companies and corporates are increasingly asking about climate change programmes including
tosupporttheir own Scope 3 targets.
Cost reduction by investing in low-carbon technologies and energyefficiency/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
higheroperating costs.
Opportunity to use scale to drive suppliers to sustainability at scale.
Addition of Electric Vehicle charging points in car parks to attractmore customers and increase on-site renewable
energygeneration 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 therequirements of LR 9.8.6R by including climate-related financial disclosures consistent
with the TCFDrecommendations 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.
49
Whitbread Annual Report and Accounts 2021/22
Strategic reportGovernanceFinancial statementsOther 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
thediverseexperience
oftheBoardmembers
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
alignedtothe values
andcultureof the
organisation and
keepinmind
allstakeholders
External advisers
The Board receives detailed agenda papers a week ahead
ofevery meeting, giving directors sufficient time to perform
their duties in line with section 172
Whitbread organises various training programmes
fordirectors to keep them up to date on all aspects
ofthebusiness
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 2021/2250
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,
mentaland financial)
›An inclusive culture that values difference, allowing everyone
tobethemselves 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
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
toreward 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
and95%of learners continued
theirapprenticeships while we
werestill not fully reopened
Investors
›Dividend of 34.7p per share
›Significant market outperformance
inthe 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
willnotbe 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
duringdriver and transport shortages
›Appointed a third party to
supportsuppliers with post-
Brexitcustoms 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
isnow 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
thebusiness
Landlords
›All rent paid in full, in contrast
tocompetitors
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
3
50
300
250
200
150
100
50
0
Whitbread
FTSE 100
Source: Datastream from Refinitiv
Whitbread Annual Report and Accounts 2021/2290
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:
MeasureThresholdTargetMax
Weighting
(% of
maximum)
Outcome achieved
Alison
Brittain
Louise
Smalley
1
Profit
performance
Sales growth vs market measureActual: +25%25%25%25%
-1%0%+2.25%
Profit conversion measureActual: (£16m)25%25%25%
(£64m)(£44m)(£24m)
Efficiency savingsActual: £40m20%20%20%
£20m£25m£30m
Strategic growth objectivesDetails of performance are
setout 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)1,086244
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
in2023, 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 Brittain9218953%
Hemant Patel515N/AN/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 Brittain10%15%18%
Hemant Patel10%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
thefollowing 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,
afterwhich 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
Nicholas Cadbury6065562022112131739709––––––739709
Louise Smalley
2
2003679193886247472244–––244–491472
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 2021/22102
Annual Report on Remunerationcontinued
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
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 objectivesTotal % of salary
Total % of salary after
25% reductionTotal £’000
Alison Brittain85.0034.0042.84161.84121.381,086
Louise Smalley85.0034.0043.16162.16121.62244
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
May2021 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
ratewas 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
1
Senior Independent
Director fee
Fee as Chairman of a
Board Committee
Fee as a member of a
Board CommitteeTotal
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 Crozier408380––––––408380
David Atkins6258––––10107268
Kal Atwal62–––––5–67–
Horst Baier6258––––556763
Fumbi Chima62–––––5–67–
Frank Fiskers6258– –2020558783
Richard
Gillingwater62581515––558278
Chris Kennedy6258––2020––8278
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.
Inaddition, new post-cessation shareholding requirements were introduced. These are subject to transitional arrangements for
theexecutive 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
athree-year period.
Whitbread Annual Report and Accounts 2021/22106
Annual Report on Remunerationcontinued
Remuneration Report continued
The table below shows the holdings of directors as at 3 March 2022:
Counting towards requirementPerformance vs requirement
Nicholas Cadbury 39,099 19,1721,6781,484 200 28224946,419
Louise Smalley
2
64,79416,662 2,5762,217 200 69456318,295
Non-executive directors
David Atkins 3,137– 9994100 159151–
Kal Atwal2,063–606210097100–
Horst Baier 2,400– 8472100 135116–
Fumbi Chima315–1091001615–
Frank Fiskers 2,115–6364100 102102–
Richard
Gillingwater 2,000– 7060100 11296–
Chris Kennedy 2,250– 7368100 117109–
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
ofthis report.
Options exercised (audited information)
The following options were exercised by executive directors under the Company’s share schemes during the year.
DirectorSchemeNumber of sharesExercise priceExercise date
Market price on exercise
(p)
Alison BrittainAIS12,922N/A23-Nov-21 3,012.0
Nicholas CadburyAIS8,593N/A07-May-213,245.0
Louise SmalleyAIS 10,300N/A07-May-21 3,245.0
SAYE 356N/A09-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:
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
isa 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.
Suchfactors 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
ofclear evidence of management failure or significant
underperformance. If there is evidence of clear management
failure or significant underperformance, the underpin will not
bemet.
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
(auditedinformation)
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
LouiseSmalley'sdeparture
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
NicholasCadbury’sdeparture
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 atthegeneral
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,
inline with the remuneration policy. The awards made under
theRSP 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
setof 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
newskills 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
yearwill 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
andagain 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
alike-for-like basis.
Whitbread Annual Report and Accounts 2021/22108
Annual Report on Remunerationcontinued
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:
YearMethod25th percentile pay ratioMedian pay ratio75th percentile pay ratio
2021/22Total pay (FTE):£19,341£20,138£21,594
Total pay & benefits
(FTE):£19,659£20,592£22,153
Pay ratio (Option A):110:1105:198:1
2020/21Pay ratio (Option A):55:153:150:1
2019/20Pay ratio (Option A):150:1143:1134:1
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.
YearChief Executive
Single total figure of
remuneration £’000
% of maximum annual
incentive achieved% of LTIP award vesting
2021/22Alison Brittain2,164 71,4
3
N/A
2020/21Alison Brittain1,0320.0
2
N/A
2019/20Alison Brittain2,63656.736.0
2018/19Alison Brittain5,588
1
54.80.0
2017/18Alison Brittain2,33664.138.3
2016/17Alison Brittain2,50949.876.5
2015/16Alison Brittain63438.8N/A
Andy Harrison2,42338.897.2
Combined CEO remuneration for 2015/163,05738.897.2
2014/15Andy Harrison4,55486.8100.0
2013/14Andy Harrison6,37482.6100.0
2012/13Andy Harrison3,43274.989.8
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
onemployee pay during the year to the change in dividend
payments and share buybacks.
2020/212021/22% Change
Employee costs £581.5m £678.9m 16.7%
Dividends £– £– No change
Implementation of remuneration
policyin2022/23
Base salary
Alison Brittain will receive a 3% salary increase in May 2022,
inline 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.
Thebase 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 Brittain921895
Hemant Patel515N/A
Benefits and pension
The benefits received by each executive director will continue
to include family private healthcare, a cash allowance in lieu
ofacompany car and cash allowances in lieu of pension.
Property, plant and equipment144 , 2 2 7. 14,213.1
Investment property14–21 .6
Investment in joint ventures1641 .13 7. 3
Derivative financial instruments2515.86.6
Defined benefit pension surplus32522 .618 8 .0
8, 233. 57, 4 2 9 . 1
CURRENT ASSETS
Inventories1719.41 2 .1
Derivative financial instruments25–8.2
Trade and other receivables18116 .474 . 2
Cash and cash equivalents191 ,132 .41 , 25 6.0
1, 268. 21 ,3 5 0.5
Assets classified as held for sale1464.81 9.0
TOTAL ASSETS9,566.58 ,7 9 8 . 6
CURRENT LIABILITIES
Borrowings20–31 2.0
Lease liabilities221 29. 311 2.1
Provisions231 9.63 0.5
Derivative financial instruments25–2.4
Current tax liabilities–1.8
Trade and other payables2657 0.7316.5
719. 6775.3
NON-CURRENT LIABILITIES
Borrowings20991 .99 9 0.5
Lease liabilities223, 572 . 53,1 1 9. 5
Provisions231 1 .79.0
Deferred tax liabilities101 50.64 4.6
Trade and other payables261.225 .6
4,727.94,1 8 9. 2
TOTAL LIABILITIES5 , 4 4 7. 54,964.5
NET ASSETS4, 11 9.03, 8 3 4 .1
EQUITY
Share capital27164 . 81 6 4 .7
Share premium281 ,024 .71,0 2 2.9
Capital redemption reserve2850. 25 0.2
Retained earnings285,22 5.34,94 4.8
Currency translation reserve2824. 32 8 .7
Other reserves28(2 , 370. 3)(2,377 .2)
TOTAL EQUITY4, 11 9.03, 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 BRITTAINCHIEF EXECUTIVEHEMANT PATELCHIEF FINANCIAL OFFICER27 April 2022
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 inrelation 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 2021/22150
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 2022Year to 25 February 2021
UK &
Ireland
£m
Germany
£m
Central
andother
£m
Total
£m
UK &
Ireland
£m
Germany
£m
Central
andother
£m
Total
£m
Accommodation1,157.829.1–1,186.9388.510.2–398.7
Food, beverage and other items
1
510.46.1–516.5188.91.3–190.2
REVENUE BEFORE ADJUSTING
ITEMS1,668.235.2–1,703.4577.411.5–588.9
Adjusting revenue (Note 6)–0.5
REVENUE1,703.4589.4
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
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 2021/22152
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 statements1.00.9
Audit of the Group’s subsidiaries0.60.6
TOTAL AUDIT FEES1.61.5
Audit-related assurance0.10.1
Other non-audit fees
1
–1.1
TOTAL NON-AUDIT FEES0.11.2
INCLUDED IN OTHER OPERATING CHARGES1.72.7
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
ofthe financial performance of the Group’s businesses either from one period to another or with other similarbusinesses.
2021/22
£m
2020/21
£m
ADJUSTING ITEMS WERE AS FOLLOWS:
Revenue:
TSA income
1
–0.5
Other income:
Insurance proceeds
2
–1.8
VAT settlement
3
8.74.5
ADJUSTING OTHER INCOME8.76.3
Operating costs:
TSA costs
1
–(0.5)
Costa disposal – separation costs and other costs
4
–6.4
Impairment – goodwill
5
–(238.8)
Net impairment reversals/(write offs) – property, plant and equipment, right-of-use assets and other
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 asite 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 salaries621.0531.1
Social security costs46.738.9
Pension costs11.211.5
678.9581.5
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 2021/22154
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 paid440.3391.7
Employee costs – salaried238.6189.8
678.9581.5
Average number of employees directly employed
2021/22
Number
2020/21
Number
UK & Ireland33,54632,190
Germany782599
34,32832,789
Employees of joint ventures are excluded from the numbers above.
Directors’ remuneration is disclosed below:
2021/22
£m
2020/21
£m
Directors’ remuneration3.83.0
Aggregate contributions to the defined contribution pension scheme––
Aggregate gains on the exercise of share options1.27.3
2021/22
Number
2020/21
Number
Number of directors accruing benefits under defined contribution schemes2 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)0.90.9
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 receivable0.71.2
Other interest receivable0.20.8
Impact of ineffective portion of cash flow and fair value hedges (Note 25)–0.4
IAS 19 pension finance income (Note 32)3.63.0
4.55.4
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 income4.56.7
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
offinancial assets and liabilities that are measured at amortised cost using the effective interest rate method.
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 statement10.06.6(3.8)0.784.44.2102.1
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 movements0.1––0.2–(0.1)0.2
AT 25 FEBRUARY 2021(44.2)(57.8)(62.5)36.083.70.2(44.6)
(Charge)/credit to consolidated income
statement
1
(28.3)(34.7)(15.4)12.653.7(4.6)(16.7)
(Charge)/credit to statement of comprehensive
income
2
––(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)48.7139.3(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 2021/22158
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 shares201.9188.1
Effect of dilution – share options1.0–
DILUTED WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES202.9188.1
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 SHAREHOLDERS42.5(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 YEAR21.1(481.9)
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)(287.6)
DILUTED EPS ON PROFIT/(LOSS) FOR THE YEAR20.9(481.9)
DILUTED EPS ON ADJUSTED LOSS FOR THE YEAR(2.5)(287.6)
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 TAX0.7(3.9)(3.2)(12.0)(4.9)(16.9)
Income tax––––––
Profit/(loss) after tax0.7(3.9)(3.2)(12.0)(4.9)(16.9)
Other comprehensive income––––––
TOTAL COMPREHENSIVE INCOME0.7(3.9)(3.2)(12.0)(4.9)(16.9)
GROUP SHARE
Profit/(loss) after tax
1
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 resale15.07.5
Consumables4.44.6
19.412.1
The carrying value of inventories is stated net of a provision of £2.5m (2021: £5.5m).
Whitbread Annual Report and Accounts 2021/22166
Notes to the Consolidated Financial Statements continued
18 TRADE AND OTHER RECEIVABLES
2022
£m
2021
£m
Trade receivables45.522.1
Prepayments and accrued income24.217.6
Other receivables46.734.5
116.474.2
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 hand43.519.2
Money market funds757.31,011.8
Short-term deposits331.6225.0
1,132.41,256.0
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
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 20202,271.5 2.2 2,273.7 –2,273.7
Additions427.71.0428.715.4444.1
Recognised on acquisition of a subsidiary193.3–193.351.9245.2
Impairment(36.7)–(36.7)–(36.7)
Foreign currency adjustment2.9–2.90.73.6
Depreciation(122.0)(1.3)(123.3)(3.0)(126.3)
Terminations–(0.2)(0.2)–(0.2)
AT 25 FEBRUARY 20212,736.71.72,738.465.02,803.4
Additions612.90.8613.7–613.7
Impairment21.7–21.7–21.7
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)
Transfers62.0–62.0(62.0)–
AT 3 MARCH 20223,266.21.43,267.6–3,267.6
LEASE LIABILITY
Property
£m
Other
£m
Total
right-of-use
assets
£m
Investment
property
£m
Total
£m
At 27 February 20202,618.8 1.82,620.6 – 2,620.6
Additions419.91.0420.916.0436.9
Recognised on acquisition of a subsidiary193.3–193.351.9245.2
Interest122.00.1122.11.1123.2
Foreign currency adjustment2.5–2.50.63.1
Payments(189.9)(1.3)(191.2)(3.6)(194.8)
Terminations(2.4)(0.2)(2.6)–(2.6)
AT 25 FEBRUARY 20213,164.21.43,165.6 66.03,231.6
Additions618.80.8619.6–619.6
Interest132.00.1132.11.1133.2
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)
Transfers63.5–63.5(63.5)–
AT 3 MARCH 20223,700.31.53,701.8–3,701.8
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 2021/22170
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 assets148.1126.3
Interest expense on lease liabilities133.2123.2
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 STATEMENT252.0277.8
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 exercised906.6797.6
Termination options expected to be exercised––
906.6797.6
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 year2.97.9
After one year but not more than five years5.210.0
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
ashortage 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
On
demand
£m
Less than 3
months
£m
3 to 12
months
£m
1 to 5
years
£m
More than
5 years
£m
Total
£m
Carrying
value
Interest-bearing loans and borrowings–19.015.2554.1594.61,182.9991.9
Lease liabilities
1
–67.3206.51,116.54,918.36,308.63,701.8
Trade and other payables–163.612.41.2–177.2176.9
–249.9234.11,671.85,512.97,668.74,870.6
25 FEBRUARY 2021
On
demand
£m
Less than 3
months
£m
3 to 12
months
£m
1 to 5
years
£m
More than
5 years
£m
Total
£m
Carrying
value
Interest-bearing loans and borrowings–221.8102.4573.7609.31,507.21,302.5
Lease liabilities
1
–54.6175.1925.54,513.45,668.63,231.6
Derivative financial instruments––2.4––2.42.4
Trade and other payables–71.237.726.8–135.7134.0
–347.6317.61,526.05,122.77,313.94,670.5
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 2021/22174
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
orhedging 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.
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:
2021/222020/21
Options
WAEP £ per
shareOptions
WAEP £ per
share
Outstanding at the beginning of the year1,139,97526.59775,29432.25
Granted during the year
1
410,03224.86783,70725.68
Exercised during the year(81,727)26.15(111,796)25.37
Expired during the year(295,172)26.65(307,230)27.53
Outstanding at the end of the year1,173,10826.011,139,97526.59
Exercisable at the year-end89,94130.66101,40027.23
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 2021/22184
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:
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:
At
3 March
2022
%
At
25 February
2021
%
Pre-April 2006 rate of increase in pensions in payment3.403.10
Post-April 2006 rate of increase in pensions in payment2.302.20
Pension increases in deferment3.403.10
Discount rate2.601.90
Inflation assumption3.603.20
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 expense2.62.7
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 assets3,043.82,992.3
SURPLUS RECOGNISED IN THE CONSOLIDATED BALANCE SHEET522.6188.0
Changes in the present value of the defined benefit obligation are as follows:
2021/22
£m
2020/21
£m
Opening defined benefit obligation2,804.32,992.7
Interest cost52.348.7
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 adjustments81.1(90.1)
Benefits paid(116.5)(107.9)
Benefits settled by the Group in relation to an unfunded pension scheme
1
(0.1)(0.1)
CLOSING DEFINED BENEFIT OBLIGATION2,521.22,804.3
Whitbread Annual Report and Accounts 2021/22188
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 assets2,992.33,183.0
Interest income on scheme assets55.951.7
Return on plan assets greater/(lower) than discount rate
2
100.0(146.5)
Contributions from employer
1
2.62.7
Additional contributions from Moorgate SLP
1
10.310.2
Investment manager expenses paid by the employer
1
1.81.8
Benefits paid(116.5)(107.9)
Administrative expenses(2.6)(2.7)
CLOSING FAIR VALUE OF SCHEME ASSETS3,043.82,992.3
The major categories of plan assets are as follows:
20222021
Quoted
and pooled
£m
Unquoted
£m
Total
£m
Quoted and
pooled
£m
Unquoted
£m
Total
£m
Equities76.4–76.475.5–75.5
Alternative assets143.0–143.0200.7–200.7
Bonds164.63.2167.8196.55.1201.6
Private markets–460.7460.7–403.1403.1
Liability driven Investments
3
2,160.8–2,160.82,060.5–2,060.5
Cash and other
4
35.1–35.150.9–50.9
2,579.9463.93,043.82,584.1408.22,992.3
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 rate359.0421.0
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 rate72.090.0
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
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 assets148.1126.3
Depreciation – property, plant and equipment157.9150.3
Amortisation20.923.6
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 capital182.5(99.8)
OPERATING CASH FLOW404.4(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 assets148.1126.3
Depreciation – property, plant and equipment157.9150.3
Amortisation20.923.6
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 EBITDAR472.6(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 notincluded.
* 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 2021/22210
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
whereyou 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
ofaddress.
Share dealing service
1
For Link Share Dealing Services you can telephone
+44 (0)371 664 0445. Calls are charged at the standard
geographic rate and will vary by provider. Calls from outside
the United Kingdom will be charged at the applicable
international rate. Lines are open between 8.00am and
4.30pm, Monday to Friday excluding public holidays in
England and Wales.
Private shareholder
Private shareholders are shareholders who hold their shares
intheir own name on the Company’s Register of Members.
They have full voting rights and have the right to stipulate their
communication preferences and bank account preferences on
their own holding.
Nominee shareholder
Nominee shareholders are underlying beneficial shareholders
who hold their shares through a nominee company. The name
of the nominee company will appear on the Company’s
Register of Members. It will depend on the terms and
conditions of the nominee provider as to whether underlying
shareholders receive copies of the 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
havethe 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
thata number of shareholders prefer not to hold their
sharesincertificated 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,
butalso 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
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.