Good morning or good afternoon all, and welcome to the Whitbread PLC Q1 results call. My name is Adam, and I'll be your operator for today. If you'd like to ask a question during the Q&A portion of today's call, you may do so by pressing star followed by one on your telephone keypad. I'll now hand you over to Alison Brittain to begin. Alison, please go ahead when you are ready. Good morning, everyone. Thank you very much for joining the call for our quarter one trading update. I'm joined here in the room by Hemant Patel, our Group CFO, and by Peter Reynolds, our Director of Investor Relations, and Sophie and Abby, who are also members of the investor relations team. I hope you've had a chance to review the Q1 release this morning, but I'll start with a really brief overview for those who haven't seen it, and then we'll hand straight over to Q&A, where we'll answer any of your questions. During this first quarter, which ran until the second of June, we continued to trade exceptionally well in the UK and we are now significantly ahead of pre-COVID sales levels, as well as ahead of the market. Total accommodation sales in quarter one were 31% ahead of pre-pandemic levels, and our like-for-like accommodation sales for quarter one were 21% ahead of the same period. This resulted in an outperformance to the mid-scale and economy market of 27.2 percentage points. Given this very strong sales performance and the continued decline of the independent hotel sector, we remain confident about our continued margin recovery in the UK. Therefore, assuming that consumer demand and occupancy remain strong, we are planning to make some further investments to underpin our market-leading position and to drive future earnings. We're planning for around GBP 20 million- GBP 30 million of additional costs due to brought forward refurbishments and IT spend and some additional costs due to targeted pay increases. Turning away from the hotels, the value pub and restaurant sector remains behind pre-COVID levels but is recovering. That's resulting in our total food and beverage sales being down about 4% for the quarter versus pre-pandemic levels. Turning to Germany, the overall German hotel market recovery has been some way behind the UK, with the last of the restrictions only being lifted at the end of April this year. However, following the lifting of restrictions, just a few weeks ago, the recovery in the German market has been somewhat faster than expected, resulting in an average occupancy in Germany of 65% across the last four weeks. With 40 hotels now open, we remain confident about the medium and long-term value creation opportunity for Premier Inn in Germany. That's the summary. I'll now hand back over to Adam, our operator, to host the Q&A. As you know, we have our AGM today, and so in order to have an efficient call this morning and given it's only a quarter one trading update, could I please ask that you initially limit your questions to two per person? Adam, if you'd like to take some questions, that would be great. Of course. Thank you. As a reminder, if you'd like to ask a question today, that's star one on your telephone keypad. Our first question today comes from Vicki Stern from Barclays. Vicki, please go ahead. Your line is open. Morning, Vicki. Good morning. Hi. Just firstly on Germany, just a little bit on the outlet there. We've obviously all seen the market data come back faster than expected, but just how are things looking there as you progress into the following few weeks where you've got visibility? I guess obviously things are moving quite quickly in that market after it's just reopened. Secondly, just on the market supply, there are a large number of rooms in the market that just remain temporarily closed, and I think those were excluded from your recent study on attrition. Just, do you have any further insights you can share with us on just the likelihood those rooms might reopen? Could there be a further sort of material reduction in supply that could come from that? Thanks. Okay. Yeah. I mean, starting on Germany, I guess we're feeling pretty positive about Germany. You know, the market we thought would come back in line with the UK, but it has come back faster than we anticipated and faster than we had originally modeled. We're pleased about that. Within that performance, you know, I think we are really pleased with the way that our business is now operating. And we expect, you know, to see further good performance, and particularly for those hotels which have been open slightly longer than others, which we showed at the full year results were performing ahead of the market. We're still seeing that trend of performing ahead of the market. We're pleased with where we've got to, and we, you know, generally speaking, got a very positive vibe from that business. Hemant, do you wanna add anything to that? Yeah, I think the only thing I'd say, those kind of our 18 most mature sites are the ones that we're looking at now, and their occupancy has been much stronger over the last four weeks. Overall, we've been about 65% occupancy for the last four weeks. Indications going forward are that the market is gonna continue to recover. Yeah, we're very positive about this, as Alison says. On the other question you asked, Vicki, yeah, we're still continuing with our network planning exercise. When we reported last time, it was only a few weeks ago when we reported that, we'd scanned about 35% of the market at that time. As we go through the next few months, as we finish that exercise, we will obviously scan more and more of the market. We do check, as you know, to make sure that things are either fully or only temporarily closed. I don't know the answer at the minute in terms of how much of that temporary closure ends up being permanent versus reopened, but we will keep an eye on that. When we next report, which is probably at the half year, we'll have probably the whole country done and the full exercise completed, and we'll have a real sense of whether there is further attrition coming from those temporarily closed entities. Okay. Thanks very much. The next question is from Jamie Rollo from Morgan Stanley. Jamie, please go ahead. Hi, Jamie. Morning. Thanks, morning, everyone. Thank you. First question is, could you break down the GBP 20 million-GBP 30 million into the sort of three different cost buckets? Also should we assume that continues into the next financial year? Secondly, on Germany again, looks like you've opened sort of about half your annual target for 2,000-2,500 rooms in the first quarter. Wondering whether that target is starting to look a bit cautious. Thank you. If I take the question on the investment. Yeah, we've taken this opportunity to invest up to GBP 25 million-GBP 30 million, as you say, Jamie, very much linked to the high levels of occupancy and outperformance we've been seeing. Labor supply is pretty tight across the hospitality sector and, assuming that demand continues onwards, we do see the need to make some very targeted pay investments, also very much linked to the high levels of occupancy, but also that tight labor supply. Of that GBP 25 million-GBP 30 million, like GBP 15 million-GBP 20 million of that, approximately, so about half of it is on labor. The remainder split fairly equally between IT investment and R&M investment, and those are accelerations of investments that we think are sensible based on the very high levels of occupancy we're seeing and investments in our reservation system, which will give us strong commercial payback over the next two to three years. I think for now you can assume that cost will roll into next year. We don't know what's gonna happen and whether we're gonna continue to need to invest in labor at the same levels next year. It all very much depends on the labor market and occupancy levels going forward. For now, I think we're assuming that might very well continue. The accelerated investment, you know, will, because of the high levels of occupancy, I think, this will be a bump for us into this year, and again it will continue into next year. The IT investment's a multi-year program, so you know, we'll bring it to an end, but it's still a couple of years away. The way we do targeted hotspot pay is we tend to follow what we think will be national living or minimum wage rises of the future. In the event that the market for labor stabilizes, we're able to unwind them at the point, you know, every April, essentially, as the minimum wage rates change. We can either choose at that point to follow through and have further hotspot pay, or we can unwind it at that level, in which case it doesn't flow through. It will be very much dependent on how we see the labor market at the time, where the pinch points are. Sometimes hotspots move throughout the year, so, you know, some of it can be very seasonal, as you'd imagine, like Cornwall, where that's not gonna be a winter hotspot, but it's gonna be a summer one. We try and make sure that we're never wedded to it, but we can and may need to keep it going depending on the labor market. In Germany, you know, without going through any of the detail, we are opening a good number of hotels in the first half. They'll be quite immature. You know, brand-new openings are always at their lowest maturity, and we have to build on occupancy before we build on rate. Whereas with the more mature hotels we've got in the market now, we are definitely building on rate as well as occupancy. We are very much more optimistic, I think, about this year's performance in Germany as well as the medium and long-term performance in Germany as a result of what we're seeing at the moment. I think your question was our guidance a little bit harsh the last time we gave it. Probably it was, given what we're seeing now. Certainly we've opened up stronger in this first quarter than we would've expected. Jamie, I think we've added 1,000, I think it's 1,192 rooms in the quarter. Okay. The full-year guidance is still 2-2.5 thousand on rooms. Yeah. -annual. Yeah. On Vicki's question, the GBP 60-70 million PBT loss, that'll be better, but you're not guiding us on that at this stage. Is that right? Yeah. I mean, just on the first point, yeah, we're not changing our overall guidance this year for the number of German room openings. It's just the phasing has been earlier in the year. On the second point, yeah, we've said the market has opened up 5-10 points better. I think you can assume that applies to us as well, and our sensitivity, as we talked about in the past, is GBP 1.4 million for every%. I mean, you can do the math. Thank you very much. Yes, definitely our previous guidance was a little bit conservative. Okay. As a reminder, that's star one to ask a question. The next question comes from Leo Carrington from Citi. Leo, please go ahead. Your line is open. Hello. Morning Thank you. Hello. Can I ask a follow-up on Germany? It looks like you signed a further five hotels, if I'm correct. Can you give some color on these? Are these sort of new-build developments or possibly conversions? Then in terms of the UK, the mix of business and leisure, obviously the overall picture is very strong in terms of RevPAR or accommodation sales, but what trends are you seeing in terms of midweek pricing and occupancy versus 2019? Do you have a sense of where the leisure business mix has now settled versus the 50/50 it used to be? I mean, on Germany, our openings are all leasehold. We haven't, I think they are developers in Germany who have developed properties or have moved from very little, but some moved from commercial to retail, but or they've done a development site in a specific location. They're all good locations. All of our sites are in really prime locations. They're all really high quality in terms of the build and fabric of them. And as I said, they're not freeholds, they're all leaseholds. That's the German opening. Yeah. Five have opened so far this year, which is what I think you were alluding to in terms of the numbers. Yeah. That, yeah, our first five for the year and that's not dissimilar to now that the total stock of 40 hotels which are similarly largely leasehold, some freehold, and are in very prime locations, built with good quality developers, who have built to our specification or where we've refurbished. In terms of the U.K. and what we're seeing, I mean, we've always had from the opening, each reopening following COVID, a big leisure bounce. That leisure, that high leisure performance has continued. If we look at our forward bookings, looks set to continue. Certainly we can see into now the first half. We can see the second quarter, we're about 40% booked for the second quarter. We're pretty confident that that is going to be a strong performance. On business travel, if you'll recall, even during the COVID crisis, essential business travelers still traveled and stayed with us. That's about 25%, about half of the 50% of our business, which is business. What we were looking for was the what we call white collar or office-based workers returning, and we've seen a strong return into the midweek that we used to have as a strong business travel. Which is why we've got high occupancy levels across the estate and across the week. We're expecting that, you know, just to continue now in quarter two. We haven't got a huge amount of line of sight into half two, which starts in September. That's totally normal, by the way. That's not an unusual position. The only thing that's abnormal is we're coming out of, you know, a year or two year period where we have an abnormality at all. Normally, where there's a wait with bated breath for the September return to work, return to school bookings, and then we book up quite quickly in September for the remaining part of the year up till Christmas. We're pretty positive. Our, I mean, I guess our outperformance and general, you know, performance is in three parts. We've got room growth, which is helping our performance. We've got pricing increases, which is helping our performance. We've got occupancy growth, which helps our performance. All of those three things have been evident in quarter one's results. Okay, thank you. Net, there's maybe the mix is a bit more leisure skewed right now, but. I think we're not far off being back to how we were, to be honest with you. I think Okay. I think we're pretty much back to where we were. Yeah, we're seeing. Okay. Strong occupancy and pricing across the full week, so all sectors. Okay. Thank you very much. The next question comes from Tim Barrett from Numis. Tim, please go ahead. Hello. Morning, all of you. Morning, Tim. Morning. I had a two-part question really on price. On Premier Inn, I see exactly what you mean around you haven't fully formed your second half expectations. Can you talk around what you're doing with rate ladders or what you expect to do with rate early on? Then similar question on the restaurant side. Just wondered what you'd done on price with the new menus and whether that was sticking, what kind of elasticity you're seeing. Thank you. Yeah, you're right. We haven't got forward bookings. We don't expect to have forward bookings. Probably about 10% booked for the second half, something like that. Slightly less than 10% booked. It's really not that much. We certainly expect, based on some leading indicators of people viewing and looking and what have you, we certainly expect the whole of this first half to be strong. We then have maintained some pricing, what I'd call pricing discipline, into the latter in September. We would expect still to be taking price as we went into the second half of this year. We would adjust that if we didn't see demand coming through. Our opening hypothesis is that demand will be there and that therefore the pricing will be there and it'll stick. Mm-hmm. As Alison says, I mean, yeah, although we don't have that full visibility, obviously we've got historical views. Remembering that we're setting pricing strategies by site, by night. We've got historical views, obviously, what happened in FY20, but also last year as well. And therefore we will be setting rate and volume strategies and everything in between depending on where we think the forecast and the demand is gonna come through for each of those nights. We do still think that we are seeing supply reduction. Which gives us more opportunity for growth. Exactly. We're still, as Alison says, holding rates. On F&B, yeah, we've seen, obviously the value end of the pub restaurant market hasn't performed as strongly as the overall pub restaurant market and is only kind of coming back down to kind of flat levels over the last kind of couple of months. We've seen some inflation coming through menus across the market. Not huge amounts, actually, based on the level of cost inflation that the market has been seeing. You know, we've taken price. We're obviously very thoughtful of making sure that we are serving our Premier Inn guests in particular. Remember the F&B, our F&B offer is there primarily to serve our Premier Inn guests, so therefore we're quite thoughtful about pricing, making sure that we're providing that good value, knowing that strong F&B offers drive RevPAR, and that's the primary reason for providing F&B. I haven't got much more to say there in terms of the elasticity specifically. Obviously we're gonna be watching what's happening in the market in terms of as menus develop and new menus come in across competitors. You know, and as we see costs change and the inflation that we talked about. We'll be quite thoughtful of what the right level of pricing is, but we'll obviously be trying to maximize overall revenue and using, you know, a quite detailed level of price elasticity modeling to make sure we optimize that. Okay. The message is still that you think there's scope for the -4% to get better in the second half? We think that we're approaching those pre-COVID levels. I think the consensus at the moment for the full year for F&B for us is just under flat. We don't think that's ridiculous, so we think that that kind of you know we should be getting back to those kind of pre-COVID levels, if not slightly above. You know, it's really difficult to read that into the second half yet. Okay. Thanks, both of you. Next question comes from Joe Thomas from HSBC. Joe, your line is open. Please go ahead. Good morning, both. Just to follow on from that, if I might, please. If you could just perhaps square the circle on F&B versus accommodation. Obviously, accommodation demand's very strong. F&B's still down. Presumably volumes are even, you know, comfortably worse than the minus 4% in the F&B business. I'm just wondering if you might shed a bit of light on why you think that's the case. Turning to Germany, where obviously things are doing really well, is there anything you'd care to give any color on leisure versus business, or kind of by site or if there are any particular themes to draw out there? Thank you. Yeah. Well, let me just start with the second on Germany. I mean, exactly as in the UK, the German reopening started every time it reopened, and indeed this time, with a leisure bounce. The first thing that seems to happen is that everybody really wants to get out and see people again and do things. As you probably read in lots of other types of report, there's a real sort of behavioral switch from buying things to having experiences and enjoying events. I think there's a real resurgence there. Certainly at the outset, as we've recovered each time in Germany, we've seen initial stronger reported performance in areas with strong leisure elements. For example, Hamburg, where we have now five, possibly even six hotels in Hamburg, incredibly strong market. It has both business and leisure drivers, and it's very, very busy all week across the board. We have some other areas which are more business, only business-focused, where the performance is not, you know, back at 95% and 100% occupancy levels. An example of that might be Essen, for example, which is a very corporate market, where occupancy levels would be more muted than that. You know, across the estate, we're seeing good progression on occupancy and then good progression on rate as well. It. As I say, I think it's coming back quite strongly and we would expect the business travel to come back as it did in the UK. You know, we're now pretty much back where we were pre-COVID in the UK, and I suspect that will be the case in Germany over the next few weeks. Okay. If I answer your first question on F&B. Yeah, I mean, in the end, we think the behavior of consumers will kind of come back to where it was pre-COVID. We think over lockdown and the kind of COVID period, you know, some customers have traded up actually. The kind of premium end of the pub restaurant market has done much better. Older customers and those with less disposable income haven't been coming back to pub restaurants as much. There's also been a lot less discounting in the market as well, so that's changed some of the structure of what's happening in the market. Our investment that we're making and improvements we're making in menus, really leveraging our PI experience on digital marketing and targeted promotional offers, I think all of those things we think will continue to drive F&B. Overall for us, obviously, it's part of our kind of core proposition. It's part of the PI experience, particularly breakfast. As I mentioned, we do drive a RevPAR premium by the, you know, with the quality of F&B offering. For our joint sites, we're obviously enjoying the structural advantage of the customers because we've got the benefit of capturing that demand from local guests as well. I think we're confident in our commercial plan and we think that will continue to steadily improve. Obviously not at the same rate that, the accommodation side has been moving though. Sure. Thanks very much. Thank you. Nothing further in the queue. As a final reminder, that's star one on your telephone keypad to ask a question. We'll give it one or two seconds longer, Adam, and if there aren't any questions then, we will close. Just give it a second in case there's a burning question still waiting. We have no further questions. Great. I'll hand back to Alison for any closing remarks. That's great. Just thank you, everybody, for dialing in this morning, and we'll speak to you again at the next set of results. Take care. Have a good week. This concludes today's call. Thank you very much for your attendance. You may now disconnect your lines.