2005 Interim Results 25 August 2005

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2005 Interim Results25 August 2005
2
Brian WallaceDeputy Group Chief Executive
andFinance Director
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Summary of Performance
Variance B(W)
2005 m
2004 m
Half year to 30 June
Hotels 72.6 65.6 10.7 Betting 143.6 153.3 (6.3)
Central costs and income (8.9) (6.5) (36.9) Opera
ting profit (1) 207.3 212.4 (2.4) Finance
costs (15.2) (21.1) 28.0 Profit before tax
(1) 192.1 191.3 0.4 Effective tax rate (1) 20.0
15.5 EBITDA (1) 275.3 278.4 (1.1) EPS
(1) 9.6p 10.2p (5.9)
(1) Before non-trading items
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Hotels - Like for Like Profit
Variance B(W)
2005 m
2004 m
Half year to 30 June
Reported profit (1) 72.6 65.6 10.7 Closed for
refurbishment 2.5 0.6 Disposals / new
openings (1.9) (2.0) St Lucia termination
receipt (2.3) - Foreign exchange (0.5) - Like
for like hotels profit (1) 70.4 64.2 9.7
(1) Before non-trading items
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Hotels Worldwide Revpar 2005 vs 2004
Like for Like Hotels, Constant Currencies

March and April results have been combined due to
the timing of Easter.
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Worldwide Revpar by Ownership Type
Like for Like Hotels, Constant Currencies
Revpar growth 2005 vs 2004 - First half
4.7
10.8
8.4
2004
2004
2004
2005
2005
2005
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Hotels - Cost Management
Like for Like Hotels, Constant Currencies

Increasing revenue m
Declining revenue m
Half year to 30 June
LivingWell m
Total m
Revenue movement 75.2 100.5 (26.2) 1.0 GOP
movement (1) 36.7 58.3 (18.4) 0.1 Incremental
conversion 48.7 58.0 29.6 Rental Owners
return (25.2) Property taxes / rates (1.7) Other (
3.6) Operating profit increase (1) 6.2
(1) Before non-trading items
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UK Hotels Profitability
Variance B(W)
2005 m
2004 m
Half year to 30 June
Reported profit (1) 30.6 38.7 (8.1) Disposals
(2.2) Increased depreciation charge (1.0) Newca
stle compensation (1.1) 5 major hotels
decline (4.9) 65 other hotels
increase 1.1 Decline in UK Hotels profit (8.1)
Analysis of decline
(1) Excludes Tindall associate result
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Europe (Hilton brand) - Revpar By Country
Like for Like Hotels, Constant Currencies, First
Half
7.1
8.6
2.3
2004
2004
2004
2005
2005
2005
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Scandic Revpar 2005 vs 2004
Like for Like Hotels, Constant Currencies,
Scandic Acquired Revpar growth 2005
vs 2004 - First half
March and April results have been combined due to
the timing of Easter.
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Scandic Performance 2005 vs 2004
Like for like revenue gainers (a) m
Like for like revenue losers (a) m
2004 Actual m
2005 Actual m
Other (b) m
Exchange m
Revenue 241.1 18.5
(3.1) (5.1) 5.8
257.2 GOP 76.2
10.9 (2.6) (2.5)
1.9 83.9 Inc. conversion
58.9 16.1
Costs (73.3)
(1.8) 0.4 1.4 (1.6)
(74.9) Profit 2.9
9.1 (2.2) (1.1)
0.3 9.0
(a) At constant currencies. (b) Includes
openings, closing and refurbishments.
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Betting Gaming
Operating Profit (1) 2005 2004 m
m
Gross Win 2005 2004 m
m
Half year to 30 June
UK Retail 342.1 338.0 108.8 119.2 Ireland
Belgium 35.6 35.9 5.7 7.0 Telephone Betting
21.6 25.9 8.5 11.8 eGaming 58.0 44.7 17.5 12.1 V
ernons 9.9 10.6 3.1 3.2 Betting
Gaming 467.2 455.1 143.6 153.3
(1) Before non-trading items
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UK Retail
Variance B(W)
2005 m
2004 m
Half year to 30 June
Over-the-counter (1) 242.5 254.2 (4.6) Machines
99.6 83.8 18.9 Total Gross Win 342.1 338.0 1.2
Gross Win on Machines FOBT 90.7 71.0 27.7 AW
P 8.9 12.8 (30.5)
(1) Underlying GW after adjusting for major
sporting events Euro 2004, Ascot, Aintree and
Cheltenham fell by 0.3 from 2004
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UK Retail Underlying Cost Growth
Variance B(W)
2005 m
2004 m
Half year to 30 June
Underlying overheads
168.1
162.6
3.4
12.0
6.0
Growth in retail estate
2.6
Opening hours increase
182.7
168.6
8.4
Total UK Retail costs
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Telephone Betting (including high rollers)
Variance B(W)
2005 m
2004 m
Half year to 30 June
Gross win 21.6 25.9 (16.6) Gross profits
tax (3.3) (3.8) 13.2 Other costs (9.8) (10.3) 4.9
Operating profit 8.5 11.8 (28.0) Average stake
per call 90.98 79.77 14.1 Salary cost per
call 65.2p 70.0p 6.9 No. of calls (000s)
3,751
3,334 12.5 Active customers (000s)
(1) 103.4 102.2 1.2
(1) Active customers are those who placed a bet
during the period
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eGaming
Variance B(W)
2005 m
2004 m
Half year to 30 June
Gross win 58.0 44.7 29.8 Gross profits
tax (3.2) (2.7) (18.5) Other costs (37.3) (29.9)
(24.7) Operating profit 17.5 12.1 44.6
Active customers (000s) (1) Sportsbook 228 231 (
1.3) Casino 46 66 (30.3) Poker 93 33 181.8 On
line registrations (000s) 195 213 (8.5)
(1) Active customers are those who placed a bet
during the period
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Hilton Group plc - Cash Flow
2005 m
2004 m
Half year to 30 June
Cash generated by operations 239.2 258.1 Interest
, tax and dividends paid (128.1) (126.6) Cash
flow before capex 111.1 131.5 Capital
expenditure (82.6) (85.4) Cash flow after
capex 28.5 46.1 Intangible additions (1)
(40.4) (19.5) Acquisitions / hotel disposals (2)
100.9 15.0 Exchange and other movements
(3) 66.5 80.0 Net borrowings movement 155.5 121.6
Opening net borrowings (971.9) (1,147.7) Closing
net borrowings (816.4) (1,026.1)

• Includes 37.1m licence additions and 2.5m
  software additions (2004 19.5m)
• Includes 103.5m on hotel disposals in 2005
  (2004 15.0m)
• (3) Includes 38.7m favourable exchange (2004
  74.7m favourable) and 30.3m inflow from share
  capital issue (2004 3.6m)

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Analysis of 2005 Capital Expenditure
Half year to 30 June
m
Hotels Acquisition linked development
Sydney (refurb) 13.2 Dusseldorf
(refurb) 1.4 14.6 Other 43.7 Total
Hotels 58.3 LivingWell 0.3 58.6 Betting
Gaming Development operating assets 15.2
Ladbrokes Xtra 0.7 Other (including
Ireland 1.9m) 7.4 eGaming / Telephone
betting 0.7 24.0 Total Group 82.6
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(No Transcript)
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David MichelsGroup Chief Executive
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2005 First Half Trading
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(No Transcript)
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Retail Estate
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Ladbrokes Costs
Like for Like UK Retail
3.4
Total UK Retail
8.4
Worldwide Betting
9.2
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eGaming
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eGaming
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Telephone Betting
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International Partners

• Sweden
• Denmark
• Finland
• Norway
• Greece
• Turkey
• Spain

• Thailand
• Malaysia
• Singapore
• Ghana
• Tanzania
• Swaziland
• Malawi

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Casinos
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(No Transcript)
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Franchising
Scandic by Hilton, Syracuse
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Management Contracts
Barbados
Dubrovnik, Croatia
Mount Wolseley, Ireland
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Hilton International
Hilton International
Commercial Operations Group
UK and Ireland
Middle East and Asia Pacific
Europe and Africa
Sourcing and Productivity
Nordic
Americas
Sales
Marketing
Distribution
IT
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BDRC
Measure
Europe
UK
Asia Pacific
Middle East
Rank
Rank
Rank
Rank

• Brand Preference
• 1st Choice
• 1st or 2nd Choice

1st
3rd
1st
1st
1st
1st
2nd
1st
Brand Ranking Index
1st
1st
2nd
1st
BDRC Survey 2005
BDRC Survey 2004
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GSTS

• Worldwide GSTS figures show an overall
  satisfaction score of 77 at June 2005, 4 up on
  December 2004
• MEAP and UK have shown increases of 5 percentage
  points and 3 percentage points respectively
  during the first half

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Sydney Hilton, Australia
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Sale of Assets
Brighton West Pier
Dunblane
Corby
Norwich
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Pipeline Growth
Hotels Opened - 2005
Hotels Opening - 2006

• Bari, Italy (Scandic by Hilton)
• Dubrovnik, Croatia
• Mount Wolseley, Ireland
• Cebu, Philippines
• Barbados, Caribbean
• Syracuse, Italy (Scandic by Hilton)
• Dublin Airport, Ireland
• Tokyo, Japan (Conrad)
• Sydney, Australia
• Barcelona Diagonal Mar, Spain
• Santo Domingo, Dominican Republic

• Phuket, Thailand (Conrad)
• Millennium Hilton Bangkok, Thailand
• Portorosa, Sicily
• Denarau, Fiji
• Sanya Resort and Spa, China
• London Canary Wharf, UK
• Manchester Deansgate, UK
• Warsaw, Poland
• Sharm Nabq, Egypt
• Valencia, Spain
• Jumeirah Beach Club, Dubai
• Evian, France
• Beirut, Lebanon
• London Tower Bridge, UK

Hotels Opening - 2005

• Alborea, Italy
• Calane, Italy
• Il Valentino, Italy
• Kalidria, Italy
• Qasr al Shaq, Saudi Arabia

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Capex.
Forecast 2005 m
Forecast 2006 m
Hotels 135 140 Betting 80 80 Major
property purchase 30 - Capital
Expenditure 245 220
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Scandic
41
Hotel Costs
42
Current Trading
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Appendix
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Hotels - Analysis by Contract Type
Fixed Lease
Contingent Lease
Owned
Total
Half year to 30 June
Managed
LivingWell
Franchise
No. of hotels 54 47 154 109 38 n/a 402 No. of
rooms 14,650 9,905 34,198 34,478 9,672 n/a 102,903

m
Revenue 263.1 138.2 430.6 520.6 2.4 26.8 1,381.7
Gross operating profit 79.1 49.3 141.8 194.2 2.4 9
.0 475.8 Less Rental/owners
return (4.0) (33.6) (93.1) (142.4) - (2.3) (275.4)
Depreciation (21.8) (9.9) (14.7) - - (2.5)
(48.9) Other costs/income (12.0) (3.0) (18.0
) (32.8) (0.7) (2.3) (68.8) 2005
Profit 41.3 2.8 16.0 19.0 1.7 1.9 82.7 2004
Profit 44.3 0.7 11.2 15.8 1.0 2.7 75.7
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Geographical Revpar by Ownership Type
Like for Like Hotels, Constant Currencies First
half
Owned Fixed Lease
Contingent Lease
Managed
UK 0.8 3.4 5.9 Europe Africa 7.8 9.6 7.0
Middle East Asia Pacific 0.0 7.5 11.9 Ameri
cas 6.5 19.6 18.3 Total 4.7 8.4 10.8
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Yield Premium - Hilton vs London Market
Cumulative Year to Date Revpar Premium
Market Source PKF Hotel Consultancy
Services Market is 8 competitor chains - Marriott
International, InterContinental, De Vere,
Millennium Copthorne, Thistle, Le Meridien,
Whitbread, Sheraton
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Yield Premium - Hilton vs UK Provincial Mkt
Cumulative Year to Date Revpar Premium
Market Source PKF Hotel Consultancy
Services Market is 8 competitor chains - Marriott
International, InterContinental, De Vere,
Millennium Copthorne, Thistle, Le Meridien,
Whitbread, Sheraton
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Betting Gaming - Revenue
2005 m
2004 m
Variance B(W)
Half year to 30 June
UK Retail (1) 4,750.9 4,065.1 16.9 Ireland
Belgium 180.4 160.9 12.1 Telephone
Betting 341.4 266.0 28.3 eGaming 424.6 281.9
50.6 Vernons 14.5 15.2 (4.6) Betting
Gaming 5,711.8 4,789.1 19.3
(1) Includes FOBT revenue, year on year increase
in machines revenue 643.4m
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Breakdown of Lease Commitments
Forecast land and buildings full year lease
commitments for 2005
Total m
Contingent Lease m
Minimum Guarantee m
Fixed Lease m

• Hotels 70.5 80.8 127.4 278.7
• Betting 40.2 - - 40.2
• Total 110.7 80.8 127.4 318.9
• Also circa 16m other operating lease
  commitments

Forecast contingent commitments are based on 2005
forecast results
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Taxation
m
Normal tax charge Tax charge at 20 on profit
before tax and non-trading items
38.4 Non-trading tax charge Tax charge at 30
on finance income from Unrealised gains on
derivatives 1.5 Profit on sale of
hotels 2.4 Total tax charge 42.3
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Finance costs
2005 m
2004 m
Variance B(W)
IAS 39 applied from 1 January 2005
Derivatives financial instruments are used to
hedge interest rate and currency exposures. IAS
39 dictates whether changes in the fair value of
these instruments can be matched in the income
statement by changes in the fair value of the
item being hedged. Where they cannot be matched,
or do not fully match, the unmatched gain or loss
represents a timing difference that will reverse
over the life of the financial instruments.
Therefore, the gains arising on these
derivatives in the period have been excluded from
the Groups adjusted profits to better reflect
underlying performance.