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Title: Brian%20Wallace%20Group%20Finance%20Director


1
Brian WallaceGroup Finance Director
2
Hilton Group plc - Summary of Performance
Half Year to 30 June 2001m
Half Year to 30 June 2000 m
Increase
Hilton International 126.3 111.0 14 Ladbroke
Betting Gaming 63.8 51.3 24 Central costs and
income (6.2) (6.8) Operating profit 183.9 155.5 1
8 Interest (39.6) (46.7) -15 Profit before
tax 144.3 108.8 33 Tax (28.9) (22.9) Profit
after tax 115.4 85.9 34
EBITDA before exceptional items 239.3 206.5 16 E
arnings per share before goodwill amortisation
andexceptional profits 7.63p 5.71p 34
3
Hilton Group plc - Exceptional Profits
m
m
Sale of 11 UK hotels to RBS 28.0 Sale of 5 other
UK hotels 1.6
29.6
Disposal of investment property 3.9 Disposal of
Pennsylvania racetrack 1.5 Pre-tax exceptional
profit 35.0
4
Hilton International - Underlying Performance
2001m
2000m
Increase
Operating profit as reported 126.3 111.0 13.8 Roy
al Bank of Scotland hotels (6.9) (11.7) Scandic (2
.7) - Other net property changes (1.3) (1.7) 11
5.4 97.6 18.2
5
Hilton UK Revpar Growth vs The London Market

25
Hilton UK vs Mkt
Market
20
Hilton UK
15
10
5
0
-5
-10
-15
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
6
Hilton UK Revpar Growth vs The Provincial Market

Hilton UK vs Mkt
20
Market
Hilton UK
15
10
5
0
-5
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
7
Hilton UK Year on Year Movement
2000 2nd Halfm
2000 1st Halfm
2001 1st Halfm
Comparable sales 9.4 29.8 22.8 Comparable gross
profit 5.5 18.2 10.6 Comparable
PBIT (5.2) 11.6 7.9
8
Hilton International Summary
2001
2000
Turnover Profit Turnover Profit Revpar m m m
m Growth
UK 301.0 70.2 281.3 65.1 6.3 Europe 286.9 33.3
267.4 30.0 (3.0) Middle Eastand
Africa 114.3 7.4 103.0 6.6 1.9 Asia /
Australasia 244.6 4.4 243.4 4.2 0.0 Americas 134.
1 13.1 114.4 10.0 6.6 Scandic 28.1 2.7 - - - Livi
ngWell 26.0 2.1 19.4 2.0 - 1,135.0 133.2 1,028.9
117.9 1.8 Central non-operating
items (6.9) (6.9) 126.3 111.0
Revpar growth stated at constant exchange rates.
9
Comparable Like for Like Gross Operating Profit
by Area

50.0
2000
46.6
46.6
46.1
2001
45.9
45.0
38.2
40.0
37.9
38.1
37.8
35.0
30.9
30.3
30.0
29.9
29.2
25.0
Americas
Asia/Australasia
Middle East Africa
ContinentalEurope
UK
Total
10
2001 Like for Like Revpar Growth at Constant
Exchange Rates
Growth
Quarter 1
9.7
10.0
8.6
Quarter 2
8.0
7.1
6.5
6.2
6.0
4.8
4.1
4.0
3.2
1.6
2.0
0.0
-2.0
-4.0
(3.7)
-6.0
UK
Europe, Middle East Africa
Asia/ Australasia
Americas
Total
-8.0
11
Ladbroke Betting Gaming Profit Comparison
Revenue
Profit
2000 m
2001 m
2001 m
2000 m
Retail Betting 948.5 968.4 60.8 46.3 Telephone
Betting 125.8 115.1 1.6 (0.2) eGaming 62.8 7.7 0
.2 (4.5) Continuing businesses 1,137.1 1,091.2 62
.6 41.6 Casinos - 63.3 - 6.8 Disposal
businesses 79.0 152.7 1.2 2.9 1,216.1 1,307.2
63.8 51.3
12
UK Retail Betting - Comparative Analysis
Variancem
2001m
2000m
Turnover 817.3 842.4 (25.1) Gross profit
(including AWPs) 168.4 155.5 12.9 Gross profit
- including AWPs 20.6 18.5 2.1 -
excluding AWPs 19.0 16.9 2.1 Operating
costs (118.2) (116.6) (1.6) Operating
profit 50.2 38.9 11.3
13
Gross Betting Margin Before Costs ()
First Half
2001
2000
Horses 17.5 15.2 Football 27.5 21.3
Greyhounds 20.0 20.5 Numbers 27.6 29.0 Other
Sports 15.3 12.6 Total 19.0 16.9
14
Analysis of Telephone Betting/eGaming Profit
2001 m
2000 m
Variance m
Telephone Betting UK 1.9 0.1 1.8 Internationa
l - Elite Telebetting 1.5 0.3 1.2 -
Other Telebetting 1.3 (1.3) 2.6 - High
Roller Activity (0.1) 0.7 (0.8) Total
Telephone Betting 4.6 (0.2) 4.8 eGaming 0.2 (4.
5) 4.7 4.8 (4.7) 9.5 One-off repatriation
costs (3.0) - (3.0) 1.8 (4.7) 6.5
15
Group Cash Flow
2001m
2000m
Inflow from operating activities 194.2 176.8
Interest paid (29.9) (26.9) Tax paid (25.4)
(22.0) Dividends paid (79.2) (75.2) Free cash
flow 59.7 52.7 Capital expenditure (94.6)
(216.2) Proceeds from asset sales 363.8
0.9 Acquisitions/disposals (414.6) 4.8
(85.7) (157.8) Exchange other
movements (37.1) (19.5) Opening net
debt (1,374.3) (1,336.8) Closing net
debt (1,497.1) (1,514.1)
16
Analysis of Capital Expenditure
m
m
Hilton LivingWell UK Clubs 12.5 LivingWell
Australia 5.8 Manchester Deansgate 5.4 Sao
Paulo 4.7 Zurich 3.1 Other UK 30.9 Other
Overseas 13.9 76.3 Betting
Gaming BS2000 EPOS System 7.4 Other 10.9
18.3 94.6
17
BS2000/EPOS
  • 2 year roll-out completed end of July 2001
  • Cost of project 25m
  • Major savings to be achieved through better
    settling accuracy and pay out and shop efficiency
  • Initial performance indicators show that on track
    to meet 5 year pay off target
  • Consumer benefits yet to be factored in such as
    faster settlement and pay out of winning bets
  • Handling more bet volumes post duty charge

18
David MichelsGroup Chief Executive
19
Revenue Per Available Room - Like for Like
First Quarter
Second Quarter
Six Months to June
2001 at 00 rates
2000
Growth
2001 at 00 rates
2001 at 00 rates
2000
Growth
2000
Growth
77.8 49.7 60.9
London Provinces Total United Kingdom
72.2 46.2 56.1
7.8 7.6 8.6
85.6 52.4 65.3
84.4 49.8 62.7
1.4 5.2 4.1
81.7 51.1 63.2
78.3 48.0 59.5
4.3 6.5 6.2
44.2 47.5 44.3 48.8
41.6 45.3 40.4 45.6
6.2 4.8 9.7 7.1
51.5 53.5 50.6 55.1
53.5 50.2 49.0 54.2
(3.7) 6.5 3.2 1.6
47.9 50.4 47.5 52.0
47.7 47.9 44.7 50.0
0.4 5.2 6.3 4.0
Europe,Middle East Africa Asia/Australasia The
Americas Total
20
Openings and Closures
Openings1st Half
Openings2nd Half
Sales/Closures1st Half
Rooms
Rooms
Rooms
Copenhagen Adana Melbourne Airport Sofia Rhodes
Resort Sorrento Auckland Bangalore Luxembourg
382 308 280 246 404 370 166 150 337
129 422 200 214 154 176 307 400
290 114 581 125 106 119 144 411
The Trafalgar Jeddah Cairo Ras Al Khaimah Dubai
Creek Ras Sudr Sinai Resort Sharm El Sheikh
Image Resort Chongqing
St. Ermins Huddersfield Kuala Lumpur Stoke on
Trent Bath Waterside Newcastle Edinburgh
Belford Algiers
21
Guest Satisfaction
1999
June 2001
2000
8
9
12
19
20
20
73
71
68
Completely or very satisfied
Fairly satisfied
Dissatisfied
Independent research carried out for Hilton
International based on a sample of over 12,500
respondents
22
Hilton International Capex Forecast
(Excluding new builds/acquisitions) lt 175
million
23
Scandic - Rebranding to Hilton
By Dec 2001 11 By June 2002 10 By Dec
2002 12 Total 33
  • Plus 5-8 through December 2003

24
London Metropole
Twelve month rolling average Occupancy, Room
Rate and Total Revenue
Revenue m
/
120
3.8
91.3
100
90.3
89.3
85.4
88.2
84.6
87.1
3.5
3.6
80
3.4
60
3.2
3.2
40
3.1
2.9
2.9
20
2.8
2.7
2.6
0
Dec 00
Jan 01
Feb 01
Mar 01
Apr 01
May 01
Jun 01
Occupancy
Total revenue m
Average rate
25
Hilton Alliance
30th June2000
30th June2001
Hilton HHonorsTotal members 11.4m 8.5m Act
ive members 6.1m 4.6m Hilton
Reservations Worldwide Total worldwide 4.9m 4.7m
hilton.com worldwide 330k 159k HRW Hilton
International 946k 824k Conrad Joint
Venture Waldorf Towers becomes Conrad 3 new
Conrads outside USA close to signing
26
Number of Hotels by Type
Fixed Lease
Contingent Lease
Management Contract
Owned
Total
UK 57 2 15 2 76 Continental Europe 15 49 110 31 2
05 Africa/Middle East 4 - 5 29 38 Asia/Australasia
2 2 2 28 34 The Americas 7 1 7 11 26 Total No.
of Hotels 85 54 139 101 379
27
Hilton International - Property
Net book value June 2001 Dec 2000 UK 1.6
billion 1.9 billion Overseas 1.0
billion 0.9 billion
28
LivingWell
Current Membership UK 115,000 International
Total 127,839
12,839
29
Half Year Shop Performance - UK and Jersey
1995
1996
1997
1998
1999
2000
2001
Average number of shops PBIT
m 22.8 29.1 37.1 43.3 34.7 36.1 48.3 PBIT
perShop k 12.1 15.9 19.6 23.0 18.2 19.2 25.7
1,878 1,831 1,892 1,892 1,910 1,879 1,883
N.B. Excludes SIS contribution
30
Betting Duty Modernisation
  • Gross profits tax of 15 replaces 6.75 turnover
    tax on 6th October
  • Increases in turnover will come from
  • Recycling
  • Increased spend
  • Illegal gambling
  • PBIT Impact per annum
  • Assuming no change to gross margins turnover
    levels
  • 25 30
  • Breakeven 25
  • Assuming 1 decline in gross margins
  • 30 40
  • Breakeven 28

N.B. Uses 2000 UK retail margin and 2000 PBIT as
base. No change in Levy
31
SIS/Media Rights/Levy/BHB
  • SIS picture and data contract for British
    horseracing expires May 2002
  • SIS have secured alternative content
  • Foot and mouth indicated punters will readily
    accept alternatives
  • Government announced review of continuance of
    statutory levy - likely to be at least 3 years
  • British racing has issued a policy, pricing
    racing data and pictures at
  • data 1.5 turnover
  • picture and audio 1.0 turnover
  • 2.5 (2.94 incl. VAT)
  • At this price Ladbrokes will revert to
    alternative content

32
Gambling Review
  • Report published 17th July 2001
  • Consultation on recommendations until end
    October 2001
  • Possibility of changes via better regulation
  • Most changes via legislation
  • Key Betting Recommendations
  • 4 x 500 jackpots
  • Betting on the UK lottery
  • Removal of demand criteria

33
eGaming
Sportsbook Ladbrokes.co.uk and Ladbrokes.com
Casino Ladbrokescasino.com
16,750 players 83 85 21 18.26 4
Customers 200,000 registrations
Active 40 Countries 161 Currencies 23 Stake
per bet 18.98 Languages 6
Active 1 or more bets in the period
34
eGaming
Key Partners
  • Playboy
  • K L Invest (Scandinavia)
  • Teamtalk
  • Cricinfo
  • 240 affiliates from 35 countries, 82 in the Far
    East
  • UK Far East
  • Bet brain
  • Bookies index
  • Easyodds
  • Poker million
  • Microgaming
  • Bethelp
  • Bettingjam
  • SCMP

35
Betting and Gaming
Digital TV
Homes (M)
Carrier
  • Satellite 5.5 BSkyB
  • Cable 1.5 Ntl/Telewest
  • Terrestrial 1.1 ITV digital
  • 8.1
  • Ladbrokes are featured on
  • BSkyB - from start of joint venture
  • Ntl/Telewest
  • ITV digital
  • Bush TV
  • Freeserve digital

36
Ladbroke and BSkyB
  • BSkyB has 5.5m digital homes and 66 live premier
    league football matches
  • Ladbroke has the best betting brand
  • 5050 joint venture to be created including
    Surrey Sportsand Vernons, using Ladbroke, Surrey
    and Vernons brands
  • Ladbroke appoint CEO
  • 30m cash payment on signing subject to OFT
    clearance
  • OFT clearance expected by the end of the year
  • Joint venture commences operating in 2002

37
Balls!
  • The latest interactive product, designed and
    developed in-house
  • A new rapid number draw game carrying the
    nomenclature Balls
  • Launched 4 weeks ago and has already generated
    over 3,000 individual players
  • Range of fixed odds betting opportunities based
    upon a 6 from 48 number draw taking place every
    minute and returning circa 94 of stakes to
    customers
  • Thursday before last we took the same turnover on
    Balls as we took on day 3 of the York Ebor meeting

38
Appendix
39
Analysis by Contract Type
Owned
Fixed Lease
ContingentLease
Total
Mgmt Contract
Scandic
LivingWell
2001
No. of hotels No. of rooms
82 20,044
14 4,971
41 12,604
88 29,945
154 26,533
N/A N/A
379 94,097
m
m
m
m
m
m
m
26.0 26.0 2.1 2.0
1,135.0 458.8 133.2 117.9
185.2 73.3 18.2 13.7
456.2 159.3 16.9 14.6
Turnover Gross operating profit Less Rental/owner
s return Depreciation Other costs/income 2001
profit 2000 profit
325.5 127.1 80.1 75.3
114.0 45.0 13.2 12.3
28.1 28.1 2.7 -
(1.1) (25.9) (20.0)
(17.7) (8.3) (5.8)
(40.6) (2.8) (11.7)
(142.4) - -
- (1.2) (24.2)
- (1.8) (22.1)
(201.8) (40.0) (83.8)
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