Brian Wallace Group Finance Director

Brian WallaceBrian WallaceGroup Finance DirectorGroup Finance Director

Brian WallaceBrian WallaceGroup Finance DirectorGroup Finance Director

Hilton International 111.0 96.0

Betting & Gaming 51.3 63.5

Central costs and income (6.8) (9.8)

Operating profit 155.5 149.7

Goodwill amortisation (18.5) (9.7)Interest (46.7) (32.1)

Profit before tax 90.3 107.9

Tax (22.9) (26.7)

Profit after tax 67.4 81.2

Hilton International 111.0 96.0

Betting & Gaming 51.3 63.5

Central costs and income (6.8) (9.8)

Operating profit 155.5 149.7

Goodwill amortisation (18.5) (9.7)Interest (46.7) (32.1)

Profit before tax 90.3 107.9

Tax (22.9) (26.7)

Profit after tax 67.4 81.2

Half Year to30 June 2000

£m


£m

Proforma Half Yearto 30 June 1999

£m


£m

EBITDA before exceptional items206.5 197.6Profit before tax, goodwill,FRS15 & exceptional items 120.5 127.5

EBITDA before exceptional items206.5 197.6Profit before tax, goodwill,FRS15 & exceptional items 120.5 127.5

Hilton Group plc Hilton Group plc - Summary of - Summary of PerformancePerformanceHilton Group plc Hilton Group plc - Summary of - Summary of PerformancePerformance

Operating profitas reported 111.0 96.0 15.6%

Net effect of UK propertychanges (mainly disposals) (1.5) (9.4)

Inclusion of overheadstreated centrally in 1999 - (5.0)

Effect of treating Stakis asacquired on 1 January 1999 - 19.9

Adjusted operating profit 109.5 101.5 7.9%

Operating profitas reported 111.0 96.0 15.6%

Net effect of UK propertychanges (mainly disposals) (1.5) (9.4)

Inclusion of overheadstreated centrally in 1999 - (5.0)

Effect of treating Stakis asacquired on 1 January 1999 - 19.9

Adjusted operating profit 109.5 101.5 7.9%

IncreaseIncreaseHalf Year to30 June 2000

£m


£m


£m


£m

Hilton International - Underlying Hilton International - Underlying PerformancePerformanceHilton International - Underlying Hilton International - Underlying PerformancePerformance

UK 281.3 65.1 226.0 63.8 9.1%

Europe 267.4 30.0 235.0 20.114.8%

Middle Eastand Africa 103.0 6.6 93.8 6.2 (1.2)%

Asia / Australasia243.4 4.2 230.4 2.2 8.8%

Americas 114.4 10.0 97.9 10.4 4.9%

LivingWell 19.4 2.0 9.0 0.9 -

1,028.9 117.9 892.1 103.6 9.0%Central & non-operating Items (6.9) (7.6)

111.0 96.0 15.6%

UK 281.3 65.1 226.0 63.8 9.1%

Europe 267.4 30.0 235.0 20.114.8%

Middle Eastand Africa 103.0 6.6 93.8 6.2 (1.2)%

Asia / Australasia243.4 4.2 230.4 2.2 8.8%

Americas 114.4 10.0 97.9 10.4 4.9%

LivingWell 19.4 2.0 9.0 0.9 -

1,028.9 117.9 892.1 103.6 9.0%Central & non-operating Items (6.9) (7.6)

111.0 96.0 15.6%

Turnover Profit Turnover Profit * Revpar£m £m £m £m Growth

Turnover Profit Turnover Profit * Revpar£m £m £m £m Growth

* At constant currencies and including full 6 months of Stakis results.

20002000 1999 Proforma

1999 Proforma

Hilton InternationalHilton InternationalHilton InternationalHilton International

Total Sales 281.3 287.4

Comparable sales 265.3 255.9Comparable GOP 123.4 117.9

GOP percentage 46.5% 46.1%Incremental conversion 59%

Other costs (46.5) (36.0)FRS15 depreciation (8.3) (8.1)

Comparable profit 68.6 73.8Costs treated centrally (5.0) -FRS15 on disposed properties - (0.6)Stakis first quarter profit - (18.8)Non comparable profit 1.5 9.4

Reported profit 65.1 63.8

Total Sales 281.3 287.4

Comparable sales 265.3 255.9Comparable GOP 123.4 117.9

GOP percentage 46.5% 46.1%Incremental conversion 59%

Other costs (46.5) (36.0)FRS15 depreciation (8.3) (8.1)

Comparable profit 68.6 73.8Costs treated centrally (5.0) -FRS15 on disposed properties - (0.6)Stakis first quarter profit - (18.8)Non comparable profit 1.5 9.4

Reported profit 65.1 63.8

2000£m

2000£m

Proforma 1999*£m

Proforma 1999*£m

* Including Stakis for 6 months

UK Hotels - P&L OverviewUK Hotels - P&L OverviewUK Hotels - P&L OverviewUK Hotels - P&L Overview

1999 costs (36.0)

Depreciation (1.7)

Owners return / rental (1.6)

Pensions (0.5)

Insurance / rates (0.8)

Training (1.0)

Sales & marketing / brand relaunch (5.4)

Inflation (1.5)

(12.5)

Savings 2.0

2000 costs (46.5)

1999 costs (36.0)

Depreciation (1.7)

Owners return / rental (1.6)

Pensions (0.5)

Insurance / rates (0.8)

Training (1.0)

Sales & marketing / brand relaunch (5.4)

Inflation (1.5)

(12.5)

Savings 2.0

2000 costs (46.5)

£m£m £m£m

UK Hotels UK Hotels - "Other Costs" Movement- "Other Costs" MovementUK Hotels UK Hotels - "Other Costs" Movement- "Other Costs" Movement

2828

3333

3838

4343

48482000 2000

1999 1999

Like for Like GOP%Like for Like GOP%

AmericasAmericas Asia PacificAsia Pacific& Australia& Australia

Middle EastMiddle East& Africa& Africa

ContinentalContinentalEuropeEurope

UKUK TotalTotal

%%

Gross Operating Profit by AreaGross Operating Profit by AreaGross Operating Profit by AreaGross Operating Profit by Area

First Year 14 95

Second Year 9 252

Third Year 5 356

First Year 14 95

Second Year 9 252

Third Year 5 356

Year of operationYear of operation Average contributionper hotel in 2000

£000

Average contributionper hotel in 2000

£000

No. HotelsNo. Hotels

Note: Excludes Hanoi projected loss of £1.5m in 2000Note: Excludes Hanoi projected loss of £1.5m in 2000

Managed Hotels - New OpeningsManaged Hotels - New OpeningsManaged Hotels - New OpeningsManaged Hotels - New Openings

30 June 1999 40.1 13.2 3.8 3.7 2.7 63.5

High roller activity (8.9) (8.9)

Sale ofGolden Gate Fields (3.9) (3.9)

Stakis Q1 2.6 2.6

Adjusted profit 40.1 4.3 (0.1) 6.3 2.7 53.3

30 June 2000 43.4 (4.7) 2.9 6.8 2.9 51.3

Movement 3.3 (9.0) 3.0 0.5 0.2 (2.0)

Analysed as:-UK Retail Betting 1.9Other businesses 1.4

3.3

30 June 1999 40.1 13.2 3.8 3.7 2.7 63.5

High roller activity (8.9) (8.9)

Sale ofGolden Gate Fields (3.9) (3.9)

Stakis Q1 2.6 2.6

Adjusted profit 40.1 4.3 (0.1) 6.3 2.7 53.3

30 June 2000 43.4 (4.7) 2.9 6.8 2.9 51.3

Movement 3.3 (9.0) 3.0 0.5 0.2 (2.0)

Analysed as:-UK Retail Betting 1.9Other businesses 1.4

3.3

RetailBettingRetail

BettingTelephoneBetting /Internet

TelephoneBetting /Internet

AmericasAmericas CasinosCasinos VernonsVernons TotalTotal

£m£m £m£m £m£m £m£m £m£m £m£m

Betting & Gaming Half Year Profit Betting & Gaming Half Year Profit ComparisonComparisonBetting & Gaming Half Year Profit Betting & Gaming Half Year Profit ComparisonComparison

Turnover 842.4 860.2 (17.8)

Gross profit

(including AWP’s) 155.5 146.7 8.8

Gross profit %

- including AWP’s 18.5% 17.0% 1.5%

- excluding AWP’s 16.9% 15.4% 1.5%

Operating costs (116.6) (109.7) (6.9)

Net profit 38.9 37.0 1.9

Turnover 842.4 860.2 (17.8)

Gross profit

(including AWP’s) 155.5 146.7 8.8

Gross profit %

- including AWP’s 18.5% 17.0% 1.5%

- excluding AWP’s 16.9% 15.4% 1.5%

Operating costs (116.6) (109.7) (6.9)

Net profit 38.9 37.0 1.9

2000£m

2000£m

1999£m

1999£m

Variance£m

Variance£m

UK Retail Betting - Comparative UK Retail Betting - Comparative AnalysisAnalysisUK Retail Betting - Comparative UK Retail Betting - Comparative AnalysisAnalysis

Horses 16.0 10.3 15.2 14.3

Greyhounds 21.1 16.9 20.5 19.2

Numbers 29.2 27.2 29.0 27.9

Other Sports 10.6 24.5 12.6 14.6

Football 25.0 6.3 21.3 7.2

Total 17.8 11.7 16.9 15.4

Horses 16.0 10.3 15.2 14.3

Greyhounds 21.1 16.9 20.5 19.2

Numbers 29.2 27.2 29.0 27.9

Other Sports 10.6 24.5 12.6 14.6

Football 25.0 6.3 21.3 7.2

Total 17.8 11.7 16.9 15.4

20002000Week 1-26Week 1-26

19991999Week 1-23Week 1-23 Week 24-

26Week 24-

26Week 1-26Week 1-26

Gross Betting Margin Before Gross Betting Margin Before Costs (%)Costs (%)Gross Betting Margin Before Gross Betting Margin Before Costs (%)Costs (%)

Levy 1.0

Pension 1.0

Sunday opening 0.9

Marketing 0.9

Other 3.1

Total 6.9

Levy 1.0

Pension 1.0

Sunday opening 0.9

Marketing 0.9

Other 3.1

Total 6.9

2000£m

2000£m

Retail Betting - Analysis of Cost Retail Betting - Analysis of Cost IncreaseIncreaseRetail Betting - Analysis of Cost Retail Betting - Analysis of Cost IncreaseIncrease

Analysis of Telephone Betting / Internet - Half Analysis of Telephone Betting / Internet - Half Year ProfitsYear ProfitsAnalysis of Telephone Betting / Internet - Half Analysis of Telephone Betting / Internet - Half Year ProfitsYear Profits

UK

- Telephone Betting 0.1 1.9 (1.8)

- Internet Betting (3.5) - (3.5)

International

- Elite Telebetting 0.3 2.4 (2.1)

- Other Telebetting (1.3) - (1.3)

- High Roller activity 0.7 8.9 (8.2)


(4.7) 13.2 (17.9)

UK

- Telephone Betting 0.1 1.9 (1.8)


International

- Elite Telebetting 0.3 2.4 (2.1)

- Other Telebetting (1.3) - (1.3)

- High Roller activity 0.7 8.9 (8.2)


(4.7) 13.2 (17.9)

2000£m

2000£m

1999£m

1999£m

Variance

£m

Variance

£m

UK Telebetting

UK Telebetting

GibraltarCall CentreGibraltar

Call CentreGibraltar

EliteGibraltar

EliteTotalTotal

2000

£m

2000

£m

1999

£m

1999

£m

2000

£m

2000

£m

1999

£m

1999

£m

2000

£m

2000

£m

1999

£m

1999

£m

2000

£m

2000

£m

1999

£m

1999

£mTurnover

Gross profit

Costs

Net profit

No. of calls

Stake per call

Gross profit %

Turnover

Gross profit

Costs

Net profit

No. of calls

Stake per call

Gross profit %

49.3

3.9

(3.8)

0.1

1.3m

£33.88

7.9%

49.3

3.9

(3.8)

0.1

1.3m

£33.88

7.9%

69.8

4.8

(2.9)

1.9

1.3m

£49.24

6.9%

69.8

4.8

(2.9)

1.9

1.3m

£49.24

6.9%

32.0

1.1

(2.4)

(1.3)

0.5m

£68.73

3.4%

32.0

1.1

(2.4)

(1.3)

0.5m

£68.73

3.4%

-

-

-

-

-

-

-

-

-

-

-

-

-

-

33.0

1.2

(0.9)

0.3

32k

£1,030

3.6%

33.0

1.2

(0.9)

0.3

32k

£1,030

3.6%

45.3

3.1

(0.7)

2.4

27k

£1,655

6.8%

45.3

3.1

(0.7)

2.4

27k

£1,655

6.8%

114.3

6.2

(7.1)

(0.9)

1.8m

£61.70

5.4%

114.3

6.2

(7.1)

(0.9)

1.8m

£61.70

5.4%

115.1

7.9

(3.6)

4.3

1.4m

£84.64

6.9%

115.1

7.9

(3.6)

4.3

1.4m

£84.64

6.9%Note: Excludes high roller activity in Gibraltar

Telebetting AnalysisTelebetting AnalysisTelebetting AnalysisTelebetting Analysis

00FebruaryFebruary MarchMarch AprilApril MayMay JuneJune JulyJuly AugustAugust

to dateto date

70,00070,000

60,00060,000

50,00050,000

40,00040,000

30,00030,000

20,00020,000

10,00010,000

Cumulative Internet Cumulative Internet RegistrationsRegistrationsCumulative Internet Cumulative Internet RegistrationsRegistrations

00FebruaryFebruary MarchMarch AprilApril MayMay JuneJune JulyJuly

1414

1212

1010

88

66

44

22

£m£m Monthly turnoverMonthly turnoverCumulative turnoverCumulative turnover

Internet TurnoverInternet TurnoverInternet TurnoverInternet Turnover

Central costs reported 6.8 9.8

Include Stakis first quarter costs - 3.5

Year 2000 costs - (1.5)

Costs reallocated to hotels division - (5.0)

Comparable costs 6.8 6.8

Central costs reported 6.8 9.8

Include Stakis first quarter costs - 3.5

Year 2000 costs - (1.5)

Costs reallocated to hotels division - (5.0)

Comparable costs 6.8 6.8

1999£m

1999£m

2000£m

2000£m

Central Costs AnalysisCentral Costs AnalysisCentral Costs AnalysisCentral Costs Analysis

Inflow from operating activities 176.8 136.5

Interest paid (26.9) (19.2)

Tax paid (22.0) (8.6)

Dividends paid (75.2) (130.6)

Free cash flow 52.7 (21.9)

Capital expenditure (216.2) (180.0)

Proceeds from asset sales 0.9 67.7

Acquisitions, disposals 4.8 (350.9)(157.8) (485.1)

Exchange & other movements (19.5) (4.9)

Opening net debt (1,336.8) (949.5)

Closing net debt (1,514.1) (1,439.5)

Inflow from operating activities 176.8 136.5

Interest paid (26.9) (19.2)

Tax paid (22.0) (8.6)

Dividends paid (75.2) (130.6)

Free cash flow 52.7 (21.9)

Capital expenditure (216.2) (180.0)

Proceeds from asset sales 0.9 67.7

Acquisitions, disposals 4.8 (350.9)(157.8) (485.1)

Exchange & other movements (19.5) (4.9)

Opening net debt (1,336.8) (949.5)

Closing net debt (1,514.1) (1,439.5)

2000£m

2000£m

1999£m

1999£m

Group Cash FlowGroup Cash FlowGroup Cash FlowGroup Cash Flow

OverseasSao Paulo 24.1Munich Park 12.8Caribe 11.8Other 12.7

61.4 28%UK

Caledonian 45.2London Metropole 21.3Park Lane 6.0Nottingham 5.0Other 50.0

127.5 57%LivingWell 13.3 6%

Refurbishment / relocation 5.4BS2000 EPOS system 3.5E-commerce 4.5Other 6.5

19.9 9%222.1

OverseasSao Paulo 24.1Munich Park 12.8Caribe 11.8Other 12.7

61.4 28%UK

Caledonian 45.2London Metropole 21.3Park Lane 6.0Nottingham 5.0Other 50.0

127.5 57%LivingWell 13.3 6%

Refurbishment / relocation 5.4BS2000 EPOS system 3.5E-commerce 4.5Other 6.5

19.9 9%222.1

HiltonHilton

Betting & GamingBetting & Gaming

Note: Includes £5.9m of accrued expenditure

Analysis of Capital ExpenditureAnalysis of Capital ExpenditureAnalysis of Capital ExpenditureAnalysis of Capital Expenditure£m£m £m£m

Consensus analyst forecast at May 1999 for 2000 380

Consensus analyst forecast at August 2000 for 2000 300Movement 80

Factors (estimates)UK revenue growth shortfall (£15m) 10Hotel closing / delays (eg Caribe, Nottingham) 5Hilton TV campaign, marketing and training 6Foreign exchange 4Accounting changes 4Absence of high staking Gibraltar activity 12Investment in E-Gaming (marketing, set up costs, etc) >10Below expectation Euro 2000 / major race events in June 13Increased UK pension costs 4Other 12

80

Consensus analyst forecast at May 1999 for 2000 380

Consensus analyst forecast at August 2000 for 2000 300Movement 80

Factors (estimates)UK revenue growth shortfall (£15m) 10Hotel closing / delays (eg Caribe, Nottingham) 5Hilton TV campaign, marketing and training 6Foreign exchange 4Accounting changes 4Absence of high staking Gibraltar activity 12Investment in E-Gaming (marketing, set up costs, etc) >10Below expectation Euro 2000 / major race events in June 13Increased UK pension costs 4Other 12

80

£m£m

Note: This is not a company forecast !

Profit Before Tax - Profit Before Tax - Analysts Analysts Forecasts for 2000Forecasts for 2000Profit Before Tax - Profit Before Tax - Analysts Analysts Forecasts for 2000Forecasts for 2000

Profit Analysis by Contract TypeProfit Analysis by Contract Type

No. of hotels 97 16 28 79 N/A 220

No. of rooms 20,999 5,928 9,914 25,699 N/A 62,540

No. of hotels 97 16 28 79 N/A 220

No. of rooms 20,999 5,928 9,914 25,699 N/A 62,540

Hilton InternationalHilton InternationalHilton InternationalHilton International

Turnover 320.6 121.8 151.9 415.2 19.4 1,028.9Gross Operating Profit126.2 45.6 61.4 148.1 19.4 400.7

Less:Rental / Owners return (2.6) (19.6) (39.3) (133.5) - (195.0)Depreciation (25.0) (7.6) (1.1) - (1.6) (35.3)Other Costs / Income (23.3) (6.1) (7.3) - (15.8) (52.5)

Half year to 30 June 2000 75.3 12.3 13.7 14.62.0 117.9Proforma to 30 June 1999 71.0 7.4 13.8 10.50.9 103.6

Turnover 320.6 121.8 151.9 415.2 19.4 1,028.9Gross Operating Profit126.2 45.6 61.4 148.1 19.4 400.7

Less:Rental / Owners return (2.6) (19.6) (39.3) (133.5) - (195.0)Depreciation (25.0) (7.6) (1.1) - (1.6) (35.3)Other Costs / Income (23.3) (6.1) (7.3) - (15.8) (52.5)

Half year to 30 June 2000 75.3 12.3 13.7 14.62.0 117.9Proforma to 30 June 1999 71.0 7.4 13.8 10.50.9 103.6

OwnedOwned FixedFixedLeaseLease

ContingentContingentLeaseLease

MgmtMgmtContractContract

LivingWellLivingWell TotalTotal

£m£m £m£m £m£m £m£m £m£m £m£m

David MichelsDavid MichelsGroup Chief ExecutiveGroup Chief Executive

David MichelsDavid MichelsGroup Chief ExecutiveGroup Chief Executive

New Executive TeamNew Executive TeamNew Executive TeamNew Executive Team

David MichelsDavid Michels Anthony HarrisAnthony Harris

Bryan TakerBryan Taker Brian WallaceBrian Wallace

Charles AnsonCharles Anson Ian PayneIan Payne

Chris BellChris Bell

More falls to the bottom line

These businesses are as customer-friendly aswe can make them

That our physical hotel estate lives up to Hilton’s perceived reputation

That our e-gaming investment is sensibly directed

That we expand the group

To improve the long term return on capital ofthe group as a whole

More falls to the bottom line

These businesses are as customer-friendly aswe can make them

That our physical hotel estate lives up to Hilton’s perceived reputation

That our e-gaming investment is sensibly directed

That we expand the group

To improve the long term return on capital ofthe group as a whole

ObjectivesObjectivesObjectivesObjectives

20002000

London 74.9 69.7 7.5%7.5%

Provinces 46.6 42.5 9.6% 9.6%

Total UK 57.3 52.5 9.1% 9.1%

Continental Europe 56.4 52.0 8.5% 14.8%

Africa / Middle East 31.4 31.3 0.3% (1.2)%

Total EMEA 46.9 44.1 6.3% 10.7%

Asia / Australasia 47.9 40.9 17.1% 8.8%

The Americas 43.7 40.1 9.0% 4.9%

Overall - Occupancy 68.1% 65.8% - Average room rate72.3 68.4 5.7% 5.3%- Revpar 49.2 45.0 9.3% 9.0%

London 74.9 69.7 7.5%7.5%

Provinces 46.6 42.5 9.6% 9.6%

Total UK 57.3 52.5 9.1% 9.1%

Continental Europe 56.4 52.0 8.5% 14.8%

Africa / Middle East 31.4 31.3 0.3% (1.2)%

Total EMEA 46.9 44.1 6.3% 10.7%

Asia / Australasia 47.9 40.9 17.1% 8.8%

The Americas 43.7 40.1 9.0% 4.9%

Overall - Occupancy 68.1% 65.8% - Average room rate72.3 68.4 5.7% 5.3%- Revpar 49.2 45.0 9.3% 9.0%

19991999 GrowthGrowthUnderlying

GrowthUnderlying

Growth

Note: The 1999 figures include results of Stakis for the full 6 months for comparability purposes

Half Year to JuneHalf Year to June

Revenue Per Available Room Revenue Per Available Room (Comparable Stakis)(Comparable Stakis)Revenue Per Available Room Revenue Per Available Room (Comparable Stakis)(Comparable Stakis)

-8-8

-6-6

-4-4

-2-2

00

22

44

66

88

1010

1212

1414

JanJan FebFeb MarMar AprApr MayMay JunJun JulJul AugAug SepSep OctOct NovNov DecDec JanJan FebFeb MarMar AprApr MayMay JunJun JulJul

19991999 20002000

%%

Hilton UK -Hilton UK - Year on Year Revpar Year on Year Revpar GrowthGrowthHilton UK -Hilton UK - Year on Year Revpar Year on Year Revpar GrowthGrowth

UK 205 30

Europe, Middle East & Africa 52 15

Asia / Australasia 7 5

Americas 54 5

LivingWell 42 5

Total 360 60

UK 205 30

Europe, Middle East & Africa 52 15

Asia / Australasia 7 5

Americas 54 5

LivingWell 42 5

Total 360 60

2000Total£m

2000Total£m

2001Maintenance

£m

2001Maintenance

£m

Hilton InternationalHilton International - Forecast Capital - Forecast Capital ExpenditureExpenditureHilton InternationalHilton International - Forecast Capital - Forecast Capital ExpenditureExpenditure

UKUK 1.91.9

InternationalInternational 0.70.7

TotalTotal 2.62.6

£bn£bn

Value of Hotel PortfolioValue of Hotel PortfolioValue of Hotel PortfolioValue of Hotel Portfolio

OwnedOwned

UK 76 2 3 3 84

Continental Europe 11 10 12 12 45

Africa / Middle East 2 0 5 25 32

Asia / Australasia 1 3 2 28 34

The Americas 7 1 6 11 25

Total 97 16 28 79 220

UK 76 2 3 3 84

Continental Europe 11 10 12 12 45

Africa / Middle East 2 0 5 25 32

Asia / Australasia 1 3 2 28 34

The Americas 7 1 6 11 25

Total 97 16 28 79 220

FixedLeaseFixedLease

ContingentLease

ContingentLease

ManagementContract

ManagementContract TotalTotal

Number of Hotels by TypeNumber of Hotels by TypeNumber of Hotels by TypeNumber of Hotels by Type

Openings 5 5 3 10 7 8 15 20 10

Signings 8 7 11 20 20 10 18 - -

Openings 5 5 3 10 7 8 15 20 10

Signings 8 7 11 20 20 10 18 - -

19941994 19951995 19961996 19971997 19981998 19991999 2001200120002000 20022002

Signings & OpeningsSignings & OpeningsSignings & OpeningsSignings & Openings

Hilton Reservations Worldwide

Hilton.com

Conrad

HHonors

Joint sales and marketing

Joint database

Promus effect

Hilton Reservations Worldwide

Hilton.com

Conrad

HHonors

Joint sales and marketing

Joint database

Promus effect

Hilton AllianceHilton AllianceHilton AllianceHilton Alliance

Total current members 8.5m

Current active members 4.6m

Since 1999

Jan 1 - June 30 stays 3.2m

Improvement on last year

Split of active membership US 3.3m

Non-US 1.3m

Total current members 8.5m

Current active members 4.6m

Since 1999

Jan 1 - June 30 stays 3.2m

Improvement on last year

Split of active membership US 3.3m

Non-US 1.3m

As at June 30 2000As at June 30 2000

HHonorsHHonorsHHonorsHHonors

+77%+77%

+74%+74%

Strategic Objectives:Strategic Objectives:

Retain / regain control over inventory

Retain direct relationship with customers

Grow incremental revenues

Reduce distribution cost

Share cost of investment in technology

Retain / regain control over inventory

Retain direct relationship with customers

Grow incremental revenues

Reduce distribution cost

Share cost of investment in technology

Europe on Line - Europe on Line - Accor / Forte / Hilton Accor / Forte / Hilton Web SiteWeb SiteEurope on Line - Europe on Line - Accor / Forte / Hilton Accor / Forte / Hilton Web SiteWeb Site

2000 Total investment - $13m

Hilton International investment - $2m

180,000 reservations in first half

Two-fold increase on previous year

2000 Total investment - $13m

Hilton International investment - $2m

180,000 reservations in first half

Two-fold increase on previous year

Hilton.comHilton.comHilton.comHilton.com

Existing Conrad Hotels:Existing Conrad Hotels:

Hong Kong

Brussels

Dublin

London

Hong Kong

Brussels

Dublin

London

Istanbul

Singapore

Egypt (x3)

Bali

Istanbul

Singapore

Egypt (x3)

Bali

ConradConradConradConrad

Average numberof shops

PBIT £m 24.6 26.8 22.8 29.1 37.1 42.8 34.4 35.6

PBIT pershop £k 12.8 14.1 12.1 15.9 19.6 23.0 18.1 19.0

Average numberof shops

PBIT £m 24.6 26.8 22.8 29.1 37.1 42.8 34.4 35.6

PBIT pershop £k 12.8 14.1 12.1 15.9 19.6 23.0 18.1 19.0

19931993 19941994 19951995 19961996 19971997 19981998 2000200019991999

Investment, productivity and product mixhave stimulated growth

Investment, productivity and product mixhave stimulated growth

1,921 1,899 1,878 1,831 1,892 1,892 1,901 1,8701,921 1,899 1,878 1,831 1,892 1,892 1,901 1,870

UK Shop First Half PerformanceUK Shop First Half PerformanceUK Shop First Half PerformanceUK Shop First Half Performance

RunnersRunners MarginMargin Per Per RunnerRunner

19951995 9.69.6 120.7120.7 2.162.16

19961996 10.210.2 122.2122.2 2.182.18

19971997 9.89.8 121.3121.3 2.172.17

19981998 10.110.1 122.3122.3 2.212.21

19991999 10.410.4 120.6120.6 1.981.98

20002000 10.410.4 121.1121.1 2.032.03

Theoretical margins are returning towards historic levels

Theoretical margins are returning towards historic levels

On-Course Theoretical MarginsOn-Course Theoretical MarginsOn-Course Theoretical MarginsOn-Course Theoretical Margins

Gambling is for adults aged 18 and over

Maintain high levels of probity and socialresponsibility requirements of operators

Careful review of existing legislation and regulation e.g. opening hours, number of slot machines and pay-out levels

Legislation and regulation to apply to both ‘bricks’ and ‘clicks’

Create a single regulator to manage future industryrules and guidelines

Create a competitive taxation regime that satisfies UKand international customers

Gambling is for adults aged 18 and over

Maintain high levels of probity and socialresponsibility requirements of operators

Careful review of existing legislation and regulation e.g. opening hours, number of slot machines and pay-out levels

Legislation and regulation to apply to both ‘bricks’ and ‘clicks’

Create a single regulator to manage future industryrules and guidelines

Create a competitive taxation regime that satisfies UKand international customers

The UK gambling industry is a world leaderAppropriate modernisation is required

The UK gambling industry is a world leaderAppropriate modernisation is required

Gambling Review Body - Gambling Review Body - Hilton Hilton SubmissionSubmissionGambling Review Body - Gambling Review Body - Hilton Hilton SubmissionSubmission

PlatformPlatformInternet Ladbrokes.com Launched

Ladbrokes.co.uk LaunchedBet.co.uk LaunchedVernons.co.uk October

Digital TV Cable Telewest Best Bets LaunchedCWC Matchball; Lucky Clover; Launched

Best BetsNTL In discussion

Satellite BSkyB In discussionOpen November

Terrestrial On-Digital In discussion

Mobile WAP BT Cellnet LaunchedGPRS BT Summer

2001

Hotel Bedrooms Hilton Web & ADSLOn test

Internet Ladbrokes.com LaunchedLadbrokes.co.uk LaunchedBet.co.uk LaunchedVernons.co.uk October

Digital TV Cable Telewest Best Bets LaunchedCWC Matchball; Lucky Clover; Launched

Best BetsNTL In discussion

Satellite BSkyB In discussionOpen November

Terrestrial On-Digital In discussion

Mobile WAP BT Cellnet LaunchedGPRS BT Summer

2001

Hotel Bedrooms Hilton Web & ADSLOn test

ChannelChannel TimingTiming

E-Gaming - Distribution ChannelsE-Gaming - Distribution ChannelsE-Gaming - Distribution ChannelsE-Gaming - Distribution Channels

Teamtalk UK Soccer June

Big Brother Channel 4 TV - Busiest site in UK August

QXL Auction on-line August

ITN News August

Umbro Sportswear August

Teamtalk UK Soccer June

Big Brother Channel 4 TV - Busiest site in UK August

QXL Auction on-line August

ITN News August

Umbro Sportswear August

PartnerPartner ActivityActivity TimingTiming

E-Gaming PartnershipsE-Gaming PartnershipsE-Gaming PartnershipsE-Gaming Partnerships

Video streamed greyhounds August 2000

Full audio service September 2000

Fantasy sports games October 2000

Casino & slots October 2000

Vernons Pools October 2000

Bingo & numbers games Mid 2001

Video streamed casino games End 2001

Video streamed greyhounds August 2000

Full audio service September 2000

Fantasy sports games October 2000

Casino & slots October 2000

Vernons Pools October 2000

Bingo & numbers games Mid 2001

Video streamed casino games End 2001

Develop a best of breed betting and gaming portalDevelop a best of breed betting and gaming portal

ActivityActivity TimingTiming

E-Gaming Future DevelopmentsE-Gaming Future DevelopmentsE-Gaming Future DevelopmentsE-Gaming Future Developments

Media Rights Now - March 2002- SIS- RCA

Horse Race Levy replacement Now - 2003- Media Rights- Duty

General Betting Duty Now - ongoing- Gross Profits Tax- Place of Consumption

Gambling Review Now - 2001- Regulation - Legislation

Media Rights Now - March 2002- SIS- RCA

Horse Race Levy replacement Now - 2003- Media Rights- Duty

General Betting Duty Now - ongoing- Gross Profits Tax- Place of Consumption

Gambling Review Now - 2001- Regulation - Legislation

TimingTiming

Industry DevelopmentsIndustry DevelopmentsIndustry DevelopmentsIndustry Developments

UK ProvincesUK Provinces ::21 Clubs21 Clubs

LondonLondon :: 6 Clubs6 Clubs

OverseasOverseas :: 4 Clubs4 Clubs

Ladbroke CasinosLadbroke CasinosLadbroke CasinosLadbroke Casinos

Current Membership Numbers : over Current Membership Numbers : over 100,000100,000

Sutton Coldfield

Nottingham

Malta

Carlisle

Sutton Coldfield

Nottingham

Malta

Carlisle

Ashford

Inverness

York

Perth

Barnsley

Burton on Trent

Peterborough

Ashford

Inverness

York

Perth

Barnsley

Burton on Trent

Peterborough

Dresden

Weimar

Berlin

Mainz

Sydney

Prague

Dresden

Weimar

Berlin

Mainz

Sydney

Prague

Planned Openings:Planned Openings:

LivingWellLivingWellLivingWellLivingWell

20020000

20020011

Brian Wallace Group Finance Director

Documents

Transcript of Brian Wallace Group Finance Director