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2016 Chairman's Statement



We have a clear plan and we have Made good progress against our strategic priorities.

Whitbread, one of Britain’s oldest and most successful companies, celebrates 275 years in business this year.

Although the modern-day Whitbread is very different from the original brewing business founded by Samuel Whitbread in 1742, we are immensely proud of our history and it is a great honour for me and my colleagues on the Board to play our own part in the Whitbread story.

The links to our heritage remain strong. Our base is still in Bedfordshire and we are delighted to be able to Welcome members of the Whitbread family to our Annual General Meeting each year, whilst our core values of investing in our Winning Teams and being a Force for Good in our communities remain as important to us today as they always have been.

We are very aware of our responsibility to ensure that this great British company continues to thrive and, as such, we are focused both on driving growth and managing risk to an appropriate level, whilst exhibiting excellent corporate governance. We operate a conservative approach to the management of our balance sheet and this provides us with a solid base in turbulent and changing times.

Our Winning Teams are the key to our success and I would like to thank our 50,000 employees for the fantastic work they do in giving our customers a great experience.

Consistent strategy

I explained this time last year that the fundamentals of our strategy, which is to provide sustainable long-term value for our shareholders by growing our successful Premier Inn and Costa brands, whilst delivering a good return on capital, were unchanged. This remains true today, as we continue undaunted by political upheaval and economic uncertainty.

We have a clear plan and we have made good progress against the three strategic priorities outlined by our Chief Executive, Alison Brittain, last April. These are to grow and innovate in our core UK businesses; to focus on our strengths to grow Internationally; and to build the capability and platform to support future growth.

We have remained on course to deliver our objectives, whilst at the same time, refreshing our Board and the executive leadership team. I believe that the new team will enable Whitbread to enter the next phase of its life with renewed vigour and confidence.

Force for Good

I believe that it is important that companies act as a Force for Good in their communities as well as being great employers and, of course, delivering on financial objectives for their shareholders. 

This has always been a core value at Whitbread and, once again, we have made some great progress this year. I reported in last year’s report that we had raised £6 million for Great Ormond Street Hospital Charity towards a £7.5 million target. I am delighted to be able to report that this target was met in November 2016, with the new Premier Inn Clinical Building due to open later this year. Meanwhile, a further £1.8 million has been raised for the Costa Foundation during the year, with 72 school projects having been completed so far, bringing access to education to thousands of children in coffee-growing communities.

Modern slavery is a live topic this year, as companies begin to publish a  statement on the subject on their websites. As you would expect, Whitbread has published its own statement, which can be found on our website. For us this is not merely about meeting a requirement though. I can assure you that it is a subject we take very seriously and we are in no way complacent.

Corporate governance

You will see in our remuneration report  that we have proposed some updates to our remuneration policy. The current policy was approved in 2014 and we are required to put an updated policy to shareholders for approval at the AGM. The Remuneration Committee has taken the opportunity to ensure that our policy is well aligned to our strategy and has re-balanced the Annual Incentive Scheme so as to focus a little more on the leading indicators of future financial performance and a little less on in-year profit. It is proposed that LTIP targets be re-set so as to reflect the business plans and, in particular, the cost headwinds such as the National Living Wage, business rates, commodity price inflation and foreign exchange rates as well as planned investment of non-productive capital in Germany, China and IT.

I believe that our approach to remuneration is grounded and conservative and that we are sensibly positioned relative to other companies.


The Board recommends a final dividend of 65.90 pence per share, making a total dividend of 95.80 pence per share, up by 6.0%. The final dividend will be paid on 30 June 2017 to shareholders on the register at the close of business on 26 May 2017. The Dividend Reinvestment Plan will continue to operate. Details of how to participate in this plan can be found on the Company’s website.

Shareholder benefits

Last year, having taken account of feedback from shareholders on the previous electronic system, we introduced a new shareholder benefits card. I’m pleased that the new card appears to have been well received by shareholders and has, for the most part, worked well. I have certainly noticed a significant reduction in correspondence on the subject. Shareholders who received the card last year, should so do automatically this year, providing that they still hold the required 64 shares in Whitbread.

The Board

As I mentioned earlier in this statement, there have been a number of Board changes during the year, as well as changes to the senior executive team, which Alison reports on in her review.

Two new independent non-executive directors, David Atkins and Deanna Oppenheimer joined the Board on 1 January 2017. David is the Chief Executive of Hammerson plc, a major UK property business with interests across a number of European markets. Whitbread has a clear growth strategy, which is underpinned by an extensive property portfolio, and David’s experience in the European retail property sector will provide the Whitbread Board with invaluable insights as we expand both in the UK and overseas.

Deanna is a highly experienced executive, with a strong background in mass consumer retail, and will bring her experience of having worked with a broad range of leading edge digital businesses in her role at CameoWorks to the Whitbread Board. In addition, Deanna’s experience of chairing the Tesco Remuneration Committee makes her well placed to succeed Stephen Williams as Chair of our own Remuneration Committee.

The third new appointment to the Board this year is that of Adam Crozier, with effect from 1 April 2017. Adam is Chief Executive of ITV plc and has been Chief Executive of a number of public and private sector organisations over the last 21 years, in the media, logistics and retail sectors. Adam is a very high quality business leader, with a strong background in business transformations, brands, communication and marketing and his expertise will be of great value to the Whitbread Board as we continue to expand our successful Premier Inn and Costa brands.

Wendy Becker stepped down from the Board on 31 December 2016 after nine years of service to Whitbread and Stephen Williams, who has also just completed nine years of service, will step down immediately after the AGM in June. I would like to thank both Wendy and Stephen for their much valued contribution to the Whitbread Board during a very successful period for the Company. Wendy has played a significant role as a member of all three Board Committees, whilst Stephen has served both as Senior Independent Director and, more recently, as Chairman of the Remuneration Committee. I would also like to thank Stephen for extending his membership of the Board so as to provide handover support to Deanna as she takes on the leadership of the Remuneration Committee.

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