1. Investor Day
19 October 2010

2. Agenda Introduction Group strategic development
Divisional strategic update
Financial update
Tour of Liddington site

3. Introduction
No new financial information for the 2010 financial year will be disclosed
Trading continues to be in line with management expectations
Board confident of delivering a good financial performance for the year
Remain encouraged by the resilience and financial performance of our business
There has been no significant change to the Group’s financial position since the Interim Results in May 2010
Full year results to be announced on Tuesday 30 November

4. Group strategic development

5. Where we are now Group strengths Sector positioning
Strength of business model
Complementary skills in exploratory, active and life-enriching travel
Common sense of purpose
Strategic organisation

6. Group strengths Strong business models and brands in niche positions
WHERE WE ARE NOW
Strong business models and brands in niche positions
First hand delivery of unique and valued products, with high customer loyalty
Core competences in safety, yield management, school and adult groups, families and management of the lifelong educational travel journey
Control of strategic assets
Strong commonalities and shared beliefs across Camping, Education and Adventure
Although there are synergies, Hotel Breaks is strategically distinct

7. Sector positioning Commodity Leisure Value-added Leisure
WHERE WE ARE NOW
Commodity Leisure
Mainstream tour operators
Disintermediation threat
Low growth
Superbreak
Bookit
Value-added Leisure
Tour leaders, first hand delivery
Increasing demand
Richer experience
Camping
Adventure
Out-of classroom Learning
Value-added
Non-leisure drivers
Social and political drivers
PGL
NST
Travelplus – High School
Education & Personal Development
Value-added
Non-leisure drivers
Language travel
Travelworks

8. Strength of business model
WHERE WE ARE NOW
Weaker
Brand strength
Product control
Defensibility
Competitive advantage
Bookit
Superbreak
Camping
Sector position
Djoser
Explore
Travelworks
Language
High
School
NST
Strong
PGL
Strong
Business Model
Weaker
Slide 7
Holidaybreak plc Investor Day

9. Complementary skills ü WHERE WE ARE NOW PGL NST / EST Camping Explore
Djoser
Travelplus
Superbreak
Bookit
Seasonal fill / yield ü
Personal development
Families / young adults
School children
Health and safety management
Tour operating
Value added leisure
Education content
Europe
School distribution
Groups

10. Common sense of purpose
Common business ethos:
Belief and pride in the product
Emotional attachment to the product and client experience
First-hand delivery
Common product ethos:
Discovery and authenticity
Sharing, contact and engagement
Active and outdoors

11. Structured for growth Value-added distribution Some unique niches
B2C web and direct sales
Packaged products
Medium-term assets
High margin
Strong customer database
Resilient
Loyal customer base
Long-term assets
High visibility
High margin
Resilient
Loyal customer base
Growth through roll-out
Asset-light
Strong cash flow cycle
Flexible cost base
Education and discovery
Resilient
Loyal customer base

12. Building shareholder value
WHERE WE ARE GOING
Strong cash flow
Strong profit margins
Resilient to recession
Earnings growth
Increased quality of earnings
Sustainable, strong margins
Progressive dividend policy
Conservative but efficient approach to debt
Organic growth – divisional strategy Corporate development – acquisition strategy

13. Acquisition strategy: Education
WHERE WE ARE GOING
Group development
Take core skills into new markets and products, particularly in Europe
Adjacency moves grounded in competitive advantage
Sector positioning
Less leisure-based and more developmental trips
Positive social and political drivers
Barriers to entry
Business model
Business adds and appropriates value
Control of strategic product, capabilities and resources
Gatekeeping and elements of exclusivity
Defensibility, scale, leadership, brand
Enhances shareholder value
Earnings growth, strong margins, quality of earnings, high ROI

14. Clear priorities Grow Education Grow International Presence
SUMMARY
WHERE WE ARE NOW
WHERE WE ARE GOING
Strong business models in niche positions
Strong complementary skills in exploratory and life-enriching travel
How we look as a group
Take core skills into new markets and products
Common sense of purpose
Grow International Presence
Where we compete
Leading, attractive and profitable travel niches
More educational and personal development revenue; positive social and political trends
More revenue from existing and new overseas markets
Grow Education
Distinctive, unique businesses
Entrepreneurial management teams
Ownership of unique and valuable PGL centres
How we compete
Control of and exclusive access to valuable products and resources
Strengthened competitive advantage
Grow Earnings
How we build shareholder value
Strong cash flow
Strong profit margins
Resilient to recession
Earnings growth
Increased quality of earnings
Progressive dividends
Sensible approach to debt

15. Divisional Strategic Update

16. Hotel Breaks

17. Core strengths
HOTEL BREAKS
Market leader in UK short breaks and leading online short break provider in the Netherlands
Excellent supplier relationships with UK hotels, rail and theatre / event providers
Unique ability to supply agents and consumers with flexible packaged products (c.56% of UK business)
New, highly motivated and focused senior management team

18. Organic growth drivers
HOTEL BREAKS
Focus on strengthening customer relationship by growing B2C market with newly re-launched bookable website and product development (e.g. ancillary services)
Grow packaged product mix by sourcing new, attractive add-ons (target c.75% of UK business)
Improve overseas city breaks product proposition

19. Camping

20. Core strengths Market leading brands in the European camping sector
Pan European distribution and natural hedging
Flexible offering – annual capacity adjustments across markets; trading allocation of capacity to highest yielding sales markets
Rigorous capacity planning and disciplined yield management

21. Organic growth drivers
CAMPING
Resilient in recession; and well-placed to grow when economy improves:
Affordable, flexible family holidays
Outdoor discovery
Authenticity
Focus on better customer segmentation to improve low season sales
Mobile-home life extension programme will improve cash generation in medium term

22. Education and Adventure

23. Core strengths Loyal customers - high retention
EDUCATION AND ADVENTURE
Loyal customers - high retention
PGL brand and product is an immense competitive advantage
Safety management
High earnings visibility – can grow capacity from known demand
Contracting power
Lobbying power - BAHA, STF
No government funding
Cross-over products in EST / NST and PGL / Explore
Sales teams
Travelplus is an entry point into German educational travel

24. Growth drivers PGL roll out NST market share gains
EDUCATION AND ADVENTURE
PGL roll out
Premium product
Careful fill and yield improvement (capacity increase at Liddington)
Market share gains
NST market share gains
Capitalise on structural overhaul
Focus on gross margin and profitable client acquisition
Contracting power and supplier synergies
Political and social macro-drivers
Product development - innovation to improve off-peak yields
Leverage range of capabilities – Explore delivers schools adventure product for PGL
Medium term recovery in overseas adventure travel
European expansion – acquisition and consolidation opportunities

25. Financial Update

26. Financial update
Management are focused on cash generation and cost control
Aim to reduce net debt / EBITDA at 30 Sept 2010 below 2x and benefit from reduced margin (250bps v 300bps)
Medium term capital expenditure reduction from mobile-home extension programme
Finance costs are 100% hedged
Actual interest rate paid was 8.1% p.a. but underlying rate was c.3.75% p.a.
Underlying finance charge is c.£8.0m p.a.
Interest hedges current value is £10.2m
60% run-off by September 2012
Remainder by October 2013

27. A common sense of purposeGo
Discover
Share
Enrichment
Discovery
Authenticity
Travel enriches lives
Discovery and authenticity
Sharing, contact and engagement
Active and outdoors
Freedom
Flexibility
Discovery
Atmosphere
Emotion
Active
Safe
Exciting
Educational
Inspire
Educate
Motivate
Engagement
Get involved
Discover
Experience