1
2005 Preliminary Results23 February 2006
2
Sir Ian RobinsonChairman
3
David MichelsGroup Chief Executive
4
Brian WallaceDeputy Group Chief Executive
and Finance Director
5
(1) Before non-trading items
2005£m
2004£m
VarianceB(W) %
Betting 266.6 272.8 (2.3)
Central costs and income (18.1) (14.1) (28.4)
Operating profit (1) 248.5 258.7 (3.9)
Finance costs (16.9) (34.1) 50.4
Profit before tax (1) 231.6 224.6 3.1
Hotels (1) (2) 187.5 159.0 17.9
Finance costs (5.2) (6.9) 24.6
Profit before tax (1) 182.3 152.1 19.9
413.9 376.7 9.9
Year to 31 December
Continuing Operations
Discontinued Operations
Group profit before tax
Summary of Performance
6
Group effective tax rate 15.0% 15.5%
EPS – Continuing Operations (1) 11.9p 11.5p 3.5
EPS – Total Group (1) 22.0p 20.2p 8.9
Net Debt £397.9m £971.9m
(1) Before non-trading items
Summary of Performance2005 2004
VarianceB(W) %
Year to 31 December
7
Hotels Worldwide Revpar 2005 vs 2004
8.5%
6.2%
3.3%
8.4%
11.8%
4.2%
7.1% 8.0%8.7%
5.8% 6.4%
(2)%
0%
2%
4%
6%
8%
10%
12%
14%
Jan Feb Mar/Apr May June July Aug Sep Oct Nov Dec
Occupancy % pts grow th
Rate grow th
Revpar grow th
March and April results have been combined due to the timing of Easter.
Like for Like Hotels, Constant Currencies
8
UK 630.9 81.3 655.1 88.1
Europe & Africa 1,249.3 82.7 1,138.3 58.2
MEAP 726.9 27.0 652.7 18.5
Americas 263.6 24.0 236.0 18.9
LivingWell 52.7 4.2 50.0 6.3
2,932.4 219.2 2,732.1 190.0
Central Costs 1.7 (31.7) 0.4 (31.0)
2,925.1 187.5 2,732.5 159.0
Hotels Summary of Results2005 2004
Revenue£m
Revenue£m
Profit£m
Profit£m
9
Cash generated by operations 553.4 549.6Interest, tax and dividends paid (251.7) (243.1)Cash flow before capex 301.7 306.5PPE expenditure – Betting (66.6) (47.3)
PPE expenditure – Hotels (130.3) (127.6)
Intangible additions (1) (45.4) (40.7)
Acquisitions (2) (78.0) -Cash flow after capex (18.6) 90.9Disposals (3) 540.9 40.1Exchange and other movements (4) 51.7 44.8Net borrowings movement 574.0 175.8Opening net borrowings (971.9) (1,147.7)Closing net borrowings (397.9) (971.9)
(1) Includes £38.0m licence additions (2004: £23.2m)(2) Includes 2005 acquisition of Jack Brown for £76.5m(3) Includes £537.5m on hotel disposals in 2005 (2004: £38.0m)(4) Includes £5.8m adverse exchange (2004: £17.8m favourable) and £38.1m inflow from share capital issue (2004: £7.8m)
Hilton Group plc – Cash Flow2005£mYear to 31 December 2004
£m
10
Cash Return
(1) Based upon current issued share capital. Assuming full conversion of the Group’s convertible bonds and the exercise of all outstanding employee share options, the aggregate amount of the return of value to shareholders will amount to approximately £4,227 million
(2) Comprises proposed final dividend of 6.6 pence and proposed special dividend of 233.4 pence
Hotels disposal proceeds 3,298.4
Cash float adjustment (30.0)
Pension contribution (55.5)
Other costs and income (55.6)
Incremental debt raised 698.4
Cash return to shareholders (1) 3,855.7
Dividend per share (2) £2.40
£m
11
12
Rosemary ThorneFinance Director
13
UK Retail 683.6 652.5 207.8 214.7
Ireland & Belgium 71.0 69.0 11.7 13.2
eGaming 123.1 89.3 41.4 21.3
Telephone Betting 21.0 46.1 (0.1) 17.8
Vernons 19.3 20.2 5.8 5.8
Betting and Gaming 918.0 877.1 266.6 272.8
Betting and Gaming
2005£m
2004£m
2005£m
2004£m
Gross Win Operating Profit
Year to 31 December
14
UK Retail - Results
OTC gross win 484.5 474.7 2.1
Machines gross win 199.1 177.8 12.0
Total gross win 683.6 652.5 4.8
VAT / Gross profits tax (101.3) (96.4) (5.1)
Staff costs (171.4) (156.3) (9.7)
Property costs (1) (78.2) (68.6) (14.0)
Content costs (2) (53.4) (48.0) (11.3)
Other costs (inc. depn) (3) (71.5) (68.5) (4.4)
Operating profit 207.8 214.7 (3.2)
(1) Rent, rates and utilities (2) Pictures, data, levy, Sky (3) Depreciation = £29.8m (2004: £28.2m)
2005£m
2004£m
Variance% B(W)
Year to 31 December
15
UK Retail - KPIs
Like for like total gross win growth 0.4% 12.0%
Like for like OTC gross win growth (2.3)% 4.4%
Like for like machines gross win growth 7.7% 39.3%
OTC margin 16.1% 16.2%
Like for like total costs (1) increase 5.2% 6.1%
Like for like shop staff costs increase 7.3% 15.4%
Stake per slip (2) £8.47 £8.47 -
Average number of FOBTs 6,403 5,146 24.4
Average weekly gross win per FOBT £545 £584 (6.7)
Year to 31 December
(1) Excludes VAT and Gross profits tax (2) Slips exclude machines
2005 2004Variance% B(W)
16
eGaming - Gross win
Sportsbook 33.0 26.5 25
Poker 41.4 23.1 79
Casino 39.1 33.6 16
Games 9.6 6.1 57
Gross win 123.1 89.3 38
Year to 31 December 2005£m
2004£m
Variance% B(W)
17
eGaming - Results2005£m
2004£m
Variance% B(W)
Gross win 123.1 89.3 38
Gross profits tax (5.8) 4.7 (4.9) 5.5
Levy (1.5) 1.2 (1.6) 1.8
Staff costs (10.2) 8.3 (7.7) 8.6 (32)
Software & geographical partners (1) (26.9) 21.9 (18.0) 20.2 (49)
Marketing (inc. affiliates) (21.1) 17.1 (21.6) 24.2
Banking & chargebacks (5.3) 4.3 (3.0) 3.4 (77)
Other costs (inc. depn) (10.9) 8.9 (11.2) 12.5
Operating profit 41.4 33.6 21.3 23.9 94
Year to 31 December
(1) Payments to third party software and platform providers and geographical partners
%age ofGross win
%age ofGross win
18
Telephone Betting - Results
Gross win exc. High Rollers 30.5 39.8 (23.4)
High Rollers’ gross win (9.5) 6.3
Total gross win 21.0 46.1 (54.4)
Gross profits tax (3.1) (6.8)
Levy (2.1) (3.5)
Staff costs (8.1) (8.6) 5.8
Direct operating costs (1) (3.0) (3.0)
Other costs (inc. depn) (4.8) (6.4)
Operating profit (0.1) 17.8
(1) Direct operating costs include telephone, bandwidth and banking costs
2005£m
2004£m
Variance% B(W)
Year to 31 December
19
Telephone Betting - KPIs
(1) Numbers of calls (excluding customer service calls)
(2) Active customers are those who placed a bet during the period
No. of calls (000’s) (1) 7,290 6,659 9.5
Agent cost per call 63p 69p 8.7
Margin (exc. High Rollers) 7.3% 8.7%
Active customers (000’s) (2) 125.3 125.2 0.1
2005 2004Variance% B(W)
Year to 31 December
20
Analysis of 2005 Capital ExpenditureCapexUK Development (1) 37.716.2Xtra 4.1 -Ireland 3.25.0Other (including IT £3.1m, 2004: £9.5m FOBTs) 11.124.7Retail 56.145.9eGaming / Telephone betting 4.16.3Total (Operating assets: £54.9m, intangibles: £5.3m) 60.252.2
AcquisitionsJack Brown 80.3 -Other (UK: £43.1m, Ireland: £1.4m) 44.524.7
124.824.7
2005£m
(1) Development = new licences, relocations and refurbishments
2004£m
21
Capital Structure£m
Opening adjusted net debt at 1 January 2006 (397.9)
Incremental debt raised for return to shareholders (698.4)
Pro forma adjusted net debt following cash return (1) (2) (1,096.3)
Ongoing target net debt to EBITDA range of 3.5 to 3.75 times
Group Defined Benefit Pension scheme deficit of nil
(1) Estimated net debt immediately following cash return to shareholders and transaction costs(2) Assumes no conversion of convertible bond or outstanding share options
22
Pro Forma Ladbrokes PLC
Betting & Gaming (2005 Result) 266.6
Proforma Central Costs (1) (15.0)
Operating Profit 251.6
Proforma Finance Costs (2) (57.0)
Profit Before Tax (3) 194.6
Estimated ongoing effective tax rate of 25% - 30%
Estimated dividend cover of 2.0x
£m
(1) 2006 estimate
(2) Based upon estimated net debt of £1.1 billion, GBP LIBOR rates at 51 bps spread, excludes IFRS pension interest. Refinancing the £300m convertible bond with bank debt will increase this charge by approximately £6m
(3) Excludes non-trading items and results of discontinued activities
Year to 31 December
23
Christopher BellChief Executive Officer
24
Ro sem ary Th o rn eCF O
Ro s B arke rHR Directo r
Jo h n O'ReillyM D Telep h o n e &
eG am in g
Alan Ro ssM D Eu ro p ean
Retail
M ike O 'Kan eTrad in g D irecto r
Christopher BellCEO
25
UK Retail Gross Win Margin %2005 2005 2004 2003 02-04
3 year Av.
Q4 Q3 Q2 Q1
Horses 14.4 14.0 12.2 15.6 13.9 14.2 13.9 14.2
Football 26.4 14.3 28.4 22.7 23.4 18.7 24.1 20.5
OTC 17.5 15.4 14.7 17.4 16.1 16.2 16.4 16.3
Horse overround
per runner 1.50 1.54 1.58 1.57 1.55 1.60 1.72 1.75
%1st/2nd favs 48.8 49.1 48.9 49.3 49.0 50.9 54.0 52.4
% margin lost at Aintree / Epsom Derby
0.6 - - n/a
*all figures exclude Jack Brown
26
UK Retail Gross Win Margin %2005 2005 2004 2003 02-04
3 year Av.
Q4 Q3 Q2 Q1
Horses 14.4 14.0 12.2 15.6 13.9 14.2 13.9 14.2
Football 26.4 14.3 28.4 22.7 23.4 18.7 24.1 20.5
OTC 17.5 15.4 14.7 17.4 16.1 16.2 16.4 16.3
Horse overround
per runner 1.50 1.54 1.58 1.57 1.55 1.60 1.72 1.75
%1st/2nd favs 48.8 49.1 48.9 49.3 49.0 50.9 54.0 52.4
% margin lost at Aintree / Epsom Derby
0.6 - - n/a
*all figures exclude Jack Brown
27
UK Retail Gross Win Margin %2005 2005 2004 2003 02-04
3 year Av.
Q4 Q3 Q2 Q1
Horses 14.4 14.0 12.2 15.6 13.9 14.2 13.9 14.2
Football 26.4 14.3 28.4 22.7 23.4 18.7 24.1 20.5
OTC 17.5 15.4 14.7 17.4 16.1 16.2 16.4 16.3
Horse overround
per runner 1.50 1.54 1.58 1.57 1.55 1.60 1.72 1.75
%1st/2nd favs 48.8 49.1 48.9 49.3 49.0 50.9 54.0 52.4
% margin lost at Aintree / Epsom Derby
0.6 - - n/a
*all figures exclude Jack Brown
28
UK Retail Gross Win Margin %2005 2005 2004 2003 02-04
3 year Av.
Q4 Q3 Q2 Q1
Horses 14.4 14.0 12.2 15.6 13.9 14.2 13.9 14.2
Football 26.4 14.3 28.4 22.7 23.4 18.7 24.1 20.5
OTC 17.5 15.4 14.7 17.4 16.1 16.2 16.4 16.3
Horse overround
per runner 1.50 1.54 1.58 1.57 1.55 1.60 1.72 1.75
%1st/2nd favs 48.8 49.1 48.9 49.3 49.0 50.9 54.0 52.4
% margin lost at Aintree / Epsom Derby
0.6 - - n/a
*all figures exclude Jack Brown
29
30
Shop Development – UK & IrelandNo. Shops ’05 ’06
pipeline
Acquisitions 191 ?
New licences 30 43
Relocations 81 84
Extensions 12 28
Refurbishments 178 55
Total 492 210
31
eGamingYear to 31 December 2005 2004 Variance
%B(W)
Average monthly active player days(000’s)
- Sportsbook 471 417 13
- Poker 411 195 111
- Casino 64 56 14
- Games 54 39 38
Average weekly Poker rake £793k £443k 79
Average weekly Casino drop £749k £644k 16
Sportsbook gross win £33.0m £26.5m 25
Gross win conversion 33.6% 23.9%
32
33
Taxation and Regulation
FOBTs
– Amusement Machine Licence Duty
– Gaming Machines From Autumn 2007
REMOTE GAMING
– Regulation
– Taxation
£500 Jackpot Machines from Autumn 2007
34
Outlook
35
Our Future• International experience in 200 countries,
18 currencies, 12 languages
• Ladbrokes, the strongest brand
• Management skills and people
• Huge retail footprint 2,583 shops
• Leading edge technology
36
37
Casino Developments• 17 New Casinos – 2005 Act
• Ladbrokes Casino and Sports Bar
• Ladbrokes Palace of Light, Blackpool
38
Brand Awareness - Sweden
0
10
20
30
40
50
60
70
80
90
100
2001 2002 2003 2004 2005
% BrandAwareness
39
40
Our Future• Strong International brand
• Depth and breadth of management
• Clear focused strategy
• Expansion
• Cash generative
41
2005 Preliminary Results23 February 2006
42
Appendix
43
Taxation
Normal tax charge:
Tax charge at 15% on Group profit before tax
and non-trading items 62.1
Allocated :
Continuing Operations 40.9
Discontinued Operations 21.2
Non-trading tax charge:
Tax charge on non-trading items : 0.9
Total tax charge 63.0
£m
44
Hotels - Like for Like Profit
Reported profit (1) 187.5 171.3 9.5%
IFRS adjustment to 2004 numbers - (12.3)
Revised profit 187.5 159.0 17.9%
Non comparable entities at constant currencies (9.6) (10.0)
St Lucia Termination payment (2.3) -
Foreign exchange (0.9) -
Like for like profit (1) 174.7 149.0 17.3%
(1) Before goodwill amortisation and exceptional items
2005£m
2004£m
VarianceB(W) %
Year to 31 December
45
Hotels - Cost Management
(1) Before non-trading items
Total Hilton
£m
Hotels Increasing
revenue£m
Hotels Declining revenue
£m
Revenue increase / (decrease) 155.3 189.9 (33.9) (0.7)
GOP increase / (decrease)(1) 83.3 109.9 (23.0) (3.6)
Incremental conversion 53.6% 57.9% 32.2%
Rental & Owners return (49.1)
Property taxes / rates (4.7)
Other (3.8)
Operating profit increase (1) 25.7
LivingWell
& Subs£m
Like for Like Hotels, Constant Currencies
Year to 31 December
46
Europe (Hilton brand) - Revpar By Country
£30
£35
£40
£45
£50
£55
£60
£65
£70
Germany France Benelux
Rev
par
2004 2004 20042005 2005 2005
+1.2%
+9.2%
+6.4%
Like for Like Hotels, Constant Currencies
47
Scandic Revpar 2005 vs 2004
13.5%
8.5%7.3%
12.2%
7.4%8.0%8.7%
6.1%
8.3%
2.1%
9.7%
(2)%
0%
2%
4%
6%
8%
10%
12%
14%
Jan Feb Mar/Apr May June July Aug Sep Oct Nov Dec
Occupancy % pts growthRate growthRevpar growth
March and April results have been combined due to the timing of Easter.
Like for Like Hotels, Constant Currencies, Scandic Acquired
Revpar growth 2005 vs 2004
48
Worldwide Revpar by Ownership Type
£30
£35
£40
£45
£50
£55
Owned & Fixed lease Contingent lease Management contract
Rev
par
+4.4%
+8.4%
+8.1%
2004 2004 20042005 20052005
Like for Like Hotels, Constant Currencies
Revpar growth 2005 vs 2004
49
£50
£55
£60
£65
£70
£75
£80
£85
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Rev
par
0%
2%
4%
6%
8%
10%
12%
Rev
par
Pre
miu
m
Hilton Revpar Premium 2005 Hilton Revpar 2005 Market Revpar 2005
Yield Premium - Hilton vs London Market
Market Source: PKF Hotel Consultancy ServicesMarket is 8 competitor chains - Marriott International, InterContinental, De Vere, Millennium & Copthorne, Thistle, Le Meridien, Whitbread, Sheraton
Cumulative Year to Date Revpar Premium
50
Market Source: PKF Hotel Consultancy ServicesMarket is 8 competitor chains - Marriott International, InterContinental, De Vere, Millennium & Copthorne, Thistle, Le Meridien, Whitbread, Sheraton
Cumulative Year to Date Revpar Premium
£30
£35
£40
£45
£50
£55
£60
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Rev
par
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
Rev
par
Pre
miu
m
Hilton RevPAR Premium 2005 Hilton RevPAR 2005 Market RevPAR 2005
Yield Premium - Hilton vs UK Provincial Market
51
Revenue 541.8 277.4 912.9 1,133.1 5.5 52.7 2,923.4
Gross operating profit 171.1 104.1 317.2 429.8 5.5 18.2 1,045.9
Less: Rental/owners return (8.9) (65.9) (197.6) (382.6) - (4.3) (659.3) Depreciation (39.6) (19.7) (28.4) - - (5.0) (92.7) Other costs/income (25.2) (5.9) (37.4) - (1.5) (4.7) (74.7)
2005 Profit 97.4 12.6 53.8 47.2 4.0 4.2 219.2
2004 Profit 99.7 6.6 36.5 38.0 2.7 6.3 190.0
Hotels - Analysis by Contract Type
TotalManaged LivingWell
No. of hotels 41 39 154 127 29 n/a 390
No. of rooms 13,475 8,919 33,538 37,052 8,807 n/a 101,791
OwnedFixed Lease
Contingent Lease
£m
FranchiseYear to 31 December
52
Geographical Revpar by Ownership TypeLike for Like Hotels, Constant Currencies
Owned & Fixed Lease
Contingent Lease Managed
UK 1.4% 1.5% 0.6%
Europe & Africa 7.3% 10.5% 4.6%
Middle East & Asia Pacific 0.0% 7.1% 9.2%
Americas 2.3% 18.4% 18.2%
Total 4.4% 8.4% 8.1%
53
Appendix
54
UK Retail - Shop Numbers
1,929
2,134
14147
23
(6)
1,500
1,750
2,000
2,250
01-Jan-05 Jack Brown Otheracquisitions
Newlicences
Closures /disposals
31-Dec-05
Plus:
• 73 relocations
• 172 refurbs
• 11 extensions
Num
ber
of
shop
s
55
Ireland & Belgium2005£m
2004£m
Variance% B(W)
Gross win 71.0 69.0 2.9
Betting tax (17.2) (17.4)
Other costs (42.1) (38.4) (9.6)
Operating profit 11.7 13.2 (11.4)
Shop numbers - Ireland 148 138 7.2
Shop numbers - Belgium 301 310 (2.9)
Year to 31 December
56
Vernons
Gross win 19.3 20.2 (4.5)
Gross profits tax (2.8) (3.0)
Other costs (10.7) (11.4) 6.1
Operating profit 5.8 5.8 -
Customer recruitment (000’s):
New customers 71 72 (1.4)
Reactivated customers 68 83 (18.1)
2005£m
2004£m
Variance% B(W)Year to 31 December
57
eGaming - KPIs
2005 2004Variance% B(W)
Year to 31 December
(1) Total successful registrations
Total registrations (000’s) (1) 479 375 28
Average monthly active player days (000’s)
Sportsbook 471 417 13
Casino 64 56 14
Poker 411 195 111
Games 54 39 38
Customer acquisition costs (2) £32.10 £44.25 27
(2) Marketing costs less CRM costs divided by total successful registrations
58
eGaming - KPIs
Sportsbook stake per bet £17.01 £14.44 18
Sportsbook margin 6.8% 8.3%
Average weekly Poker rake £793k £443k 79
Average weekly Casino drop £749k £644k 16
Average weekly Games drop £185k £118k 57
2005 2004Variance% B(W)
Year to 31 December