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The European specialist holiday groupThe European specialist holiday group1

The European The European specialist holiday groupspecialist holiday group

PRELIMINARY RESULTS 2005

The European specialist holiday groupThe European specialist holiday group2

Holidaybreak plcPRELIMINARY RESULTS 2005

• Bob Ayling (Chairman)- Overview

• Bob Baddeley (Finance Director)- Finance review

• Carl Michel (Chief Executive)- Divisional overview- Group strategy and opportunities

Q & A

The European specialist holiday groupThe European specialist holiday group3

Holidaybreak plcPRELIMINARY RESULTS 2005

- Best ever performance in terms of headline PBT and free cashflow

- Results in line with expectations

- Hotel Breaks and Adventure Travel Divisions now 2/3rds of Group sales

- Newly acquired Dutch businesses perform well

- Camping continues to deliver strong cash on reducedcapacity

- Current trading in line with expectations

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Holidaybreak plcPRELIMINARY RESULTS 2005

FINANCE DIRECTOR’S REVIEW

BOB BADDELEY

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Preliminary Results 2005FINANCIAL HIGHLIGHTS

• Turnover + 7.6% to £303.0m (2004: £281.6m)

• Profit before tax +14.3% to £32.0m (2004: £28.0m)

• Dividend + 10%

• Net debt increased by £10.4m

• 23% ROIC (2004: 24%)

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Preliminary Results 2005PROFIT &LOSS ACCOUNT

* All stated before goodwill amortisation and impairment and (in 2004 only) exceptional costs

2005 2004

£m £mTurnover 303.0 281.6 +7.6%Operating Profit * 35.8 31.4 +14.0%Profit before Tax * 32.0 28.0 +14.3%Earnings per Share * 48.8p 44.0p +10.9%Dividend per Share 26.6p 24.2p +10.0%Dividend cover * 1.8x 1.8x -

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Preliminary Results 2005DIVISIONAL RESULTS

Hotel Breaks Adventure Camping Group£m £m £m £m

Turnover 2005 126.7 62.6 113.7 303.0v 2004 +4.7% +67.3% -7.7% +7.6%

PBIT 2005 17.7 5.1 13.0 35.8v 2004 +22.0% +62.6% -5.4% 14.1%

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Preliminary Results 2005DIVISIONAL RESULTS -ACQUISITIONS

£m

Total Transaction Value: Bookit 31.6Turnover: Bookit 5.9

Djoser 19.1

25.0Operating Profit: Bookit 2.8

Djoser 1.4

4.2

Period from date of acquisition to 30 September 2005

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• Net debt increased by £10.4m, after acquisitions of BRC &

Djoser (£39.0m)

• Interest cover (pre-goodwill) 9.3 times (2004 : 9.4x)

• Currency and interest rate hedging in place

• Refinanced Bank Facilities to take advantage of market

conditions

Preliminary Results 2005CASH FLOW

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Preliminary Results 2005FREE CASH FLOW – by Division

2005 2004£m £m

Hotel Breaks 14.9 16.9Adventure 12.7 2.8Camping 21.9 8.9Interest & tax (11.4) (11.6)

Group 38.1 17.0

Free cash flow = Operating cash flow after net capex, interest & tax

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• Net debt increased to £22.9m- £39.0m (net) spent on acquisitions

- Gearing 60% (2004 :34%)

• Goodwill on acquisitions- Djoser £16.4m

- Bookit £22.3m

• £8.7m impairment of Eurosites Goodwill

Holidaybreak plcBALANCE SHEET

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• 2005 reduced capital expenditure (net of disposals)

• 2006 capex expected to be at similar levels

• Mobile-homes capacity reduced in 2005 by 11% to 9,708

• Freehold properties – sales and purchase

Preliminary Results 2005CAPITAL EXPENDITURE & DISPOSALS

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• Low fixed costs in Hotel Breaks and Adventure Travel

• Double digit margins – well above travel industry norms

• All divisions cash generative

• Healthy return on invested capital

Holidaybreak plcFINANCIAL SUMMARY

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Holidaybreak plcPRELIMINARY RESULTS 2005

CHIEF EXECUTIVE’S REVIEW

CARL MICHEL

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Holidaybreak plcPRELIMINARY RESULTS 2005

DIVISIONAL OVERVIEW

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• Portfolio of specialist businesses, all market leaders in their sectors

• Increasingly European

• Increasingly online

• Well placed to grow

• Emphasis on cash, margins and profitability

Holidaybreak plcOVERVIEW

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Holidaybreak plcHOTEL BREAKS

• 2.45m customers (2004: 1.70m)– Including 0.65m from Bookit, the #1 Dutch player

• London impacted by 7/7

• Bookit developing differentiated content (bungalows and small hotels)

• Business increasingly moving online (Bookit already at 85%, Superbreak at 25%)

• Strongly cash generative – no capacity commitments

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• 60,000 customers (2004: 41,000) – including 15,000 from Djoser, the #1 Dutch player

• Business model remains flexible– skill is in raising tour load factors

• Broader portfolio reduces destination risk

• Brand being extended – family, walking, cycle – 80 tours added (+20%) for current year

• Increasingly online– Explore now at 25%

– Djoser 65%

Holidaybreak plcADVENTURE TRAVEL

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• 523,000 customers (2004: 570,000)

• European business – one third of sales non-UK

• Strong repeat business– high call conversions

– customer satisfaction high

• Developing online capability

• Capital expenditure tightly controlled

• Highly cash generative

• For 2006, right-size the business – taking out further 16% capacity to reflect weaker low season

demand and shifts in consumer preferences

Holidaybreak plcCAMPING

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Holidaybreak plcCURRENT TRADING

• Hotel Breaks– Down 4% reflecting weakness in London market

• Adventure Travel– Up 9%

• Camping– Down 12% on capacity reduced by 16%

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Holidaybreak plcPRELIMINARY RESULTS 2005

THE CHANGING MARKET PLACE

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• Consumers increasingly aspirational – willing to travel further

• Greater confidence in buying – consumers able to unbundle and buy own components

– e.g. more low cost flights plus camping

• Fragmentation of holiday time – more short breaks

• Continuing channel shift to online

Holidaybreak plcCHANGES IN THE CUSTOMER ENVIRONMENT

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• Hotels – Main online leisure competitors are Octopus (Cendant) and

Hotelconnect– Growth in hotel groups own sites, with trend to further

concentration– Other intermediaries (Opodo, Hotels.com, Lastminute) not as

leisure focused

• Adventure Travel– Little direct competition due to strong sector growth and

fragmented nature of market

• Camping – Main competitor is Cendant– Huge self catering market

Holidaybreak plcCHANGES IN THE COMPETITIVE ENVIRONMENT

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• Fewer school age families– need to extend camping to other consumer groups esp. in low

season

• Later booking– important to have good availability and the systems to support

such flexibility

• Online travel agents marketing spend– focus for us is on search engine spend and white labels, not on

trying to outspend on advertising

Holidaybreak plcINDUSTRY TRENDS

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Holidaybreak plcPRELIMINARY RESULTS 2005

WHERE WE GO NOW

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• Attractive market positions

• Strong reasons why customers choose to buy from us

• Some unique & distinctive competencies

• Numerous distinct and exciting opportunities to grow our businesses

Holidaybreak plcFIRST IMPRESSIONS

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• Market leader in all UK/Dutch businesses

• Superbreak leader in retail trade sold short breaks

• Good packaging – reduces prospect of ‘disintermediation’

• Strong trade relationships = entry barriers

Holidaybreak plcATTRACTIVE MARKET POSITIONS

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• Hotel Breaks – well established relationships with UK hoteliers, best rates and availability

• Adventure Travel – tremendous breadth of product and complex itineraries that are hard to replicate. Significant brand awareness

• Camping – best sites, best emplacements on site, range of accommodation, operational back up in depth. Trusted brands

Holidaybreak plcSTRONG REASONS WHY CUSTOMERS CHOOSE TO BUY FROM US

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• Unique competencies– Hotel Division: low cost efficient distribution, high service to

trade– Adventure Travel: constructing complicated itineraries,

developing new products, raising tour load factors– Camping: efficiency in operations

• Other competencies

– Reputation with customers (Camping, Explore, Djoser, Bookit) and trade (Superbreak)

– Innovation (Explore, Superbreak)– Pan-European Marketing (Camping)

Holidaybreak plcSOME UNIQUE & DISTINCTIVE COMPETENCIES

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• Online – all businesses are adding functionality and improved design to

raise look-to-book ratio

• Product extensions– e.g Walking tours (Explore), chalets (Camping), small hotels

(Bookit)

• European acquisitions– ‘national’ model has better customer appeal and higher margins

Holidaybreak plcNUMEROUS DISTINCT AND EXCITING OPPORTUNITIES TO GROW

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• Business Development– identifying, prioritising and resourcing of emerging customer

requirements

• Emphasis on IT– new appointments in Camping and Explore. Now looking at

better ways to share best practice/develop synergies

• Europe– look at extending our footprint into other national markets, if

sensible opportunities arise

Holidaybreak plcFIRST STEPS………

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Holidaybreak plcPRELIMINARY RESULTS 2005

BACKGROUND INFORMATION

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Preliminary Results 2005DIVISIONAL RESULTS – excl. ACQUISITIONS

Hotel Breaks Adventure Camping Group£m £m £m £m

Turnover 2005 120.8 43.5 113.7 278.02004 120.9 37.4 123.2 281.6

Operating Profit 2005* 14.9 3.7 13.0 31.62004* 14.5 3.2 13.7 31.4

* All stated before goodwill amortisation

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Preliminary Results 2005BALANCE SHEET

2005 2004

£m £mFixed Assets 62.9 70.6Goodwill 62.3 36.2Net Current Liabilities (57.8) (51.7)Deferred Tax (6.1) (6.1)Net Debt (22.9) (12.5)Net Assets 38.4 36.5

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Preliminary Results 2005MOVEMENT IN NET DEBT

2005 2004£m £m

Operating Cash Flow 52.0 46.3Acquisitions (39.0) -Capital Expenditure (Net) (2.5) (13.5)Interest (4.4) (4.0)Tax (7.0) (7.5)Dividends (11.7) (10.7)Shares issued (net of purchases) 2.2 0.2(Increase) reduction in net debt (10.4) 10.8

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Preliminary Results 2005CAPITAL EXPENDITURE & DISPOSALS

£m Mobile- Camping Other Totalhomes Equipment Assets

Opening NBV 56.7 5.9 8.0 70.6Additions 4.3 2.3 6.0 12.6Disposals (4.0) 0 (2.6) (6.6)Depreciation (8.4) (3.5) (1.8) (13.7)Closing NBV 48.6 4.7 9.6 62.9