Q RESULTS BRUSSELS, 25 OCTOBER 2018

Transcription

1 Q RESULTS BRUSSELS, 25 OCTOBER 2018 FEDERICO J. GONZÁLEZ, PRESIDENT & CEO KNUT KLEIVEN, DEPUTY PRESIDENT & CFO Radisson Blu Hotel, Lyon, France

2 Q3 Key Highlights Q Best EBITDA financial in results the company s at a glance history and all 5YP initiatives in line or ahead of plan Revenue 253.3m Reported Revenue, + 4.2m vs. LY (+1.7%) due to a strong LFL&R revenue increase (+7.1%) offset by the exit of eight leases last year and one lease this year - 8.2m (-3.3%) 253.3m LFL&R Revenue, m vs. LY (+7.1%) mainly driven by the strong performance in the Nordics + 8.5m (+8.8%) and Rest of Western Europe + 5.2m (+4.5%) EBITDA 40.2m Reported EBITDA, + 5.8m vs. LY (+16.9%) 15.9% EBITDA margin (+2.1 pp) due to strong LFL&R revenue increase and cost discipline RevPAR Guidance 2018 Reported RevPAR +5.6% despite the negative impact of new openings and exited hotels (-4.0%) RevPAR LFL&R +8.9% mainly driven by the strong performance in the Nordics, and the implementation of revenue management initiatives including the segmentation strategy with the clean-up of low profitable business We reiterate our guidance for the full year with LFL&R revenue, expected to grow % and with an EBITDA margin of ca 11% This means that in Q4 and in line with 5YP, the company will have higher operating costs (mainly restructuring) than in previous quarters Note: LFL&R is Like for like portfolio plus renovations at constant exchange rate 2

3 Q3 Key developments We are making excellent progress with the 5 Year Operating Plan (5YP) 1 Brand Standards: New standards have been redefined and are in progress of implementation in line with plan 2 New Brands: Very positive market response to Radisson Collection (with 19 signed properties by the end of the year), new Radisson (with 10 signings YTD) and new RED (with 5 new signing 2018 YTD) 3 Repositioning: Year end result for the hotels with Investments in 2017 and 2018 are higher than planned 4 Revenue Initiatives: Early results of revenue initiatives (marketing, sales, pricing) as well as results of revenue management are positive 5 Cost control: Good evolution of key cost saving initiatives 3

4 Q Highest Q3 EBITDA in the company s history (previous record at 35.8m in Q3 2015) Profits and Loss M Q Q Vs Last Year m % LFL&R Revenue Revenue Payroll (77.5) (82.2) Other OPEX (79.1) (74.8) (4.3) (5.7) EBITDAR % over Revenue 38.2% 37.0% 1.2 pp Rents & Guarantees (56.7) (57.9) Share of income in assoc EBITDA % over Revenue 15.9% 13.8% 2.1 pp Depreciations (11.8) (10.1) (1.7) (16.9) Write-downs (8.6) (3.1) (5.5) (177.5) EBIT (1.0) (4.8) % over Revenue 7.8% 8.4% (0.5 pp) 7.8% Net financial expenses (5.7) (0.9) (4.8) (512.6) Income tax (5.0) (5.5) Net Income (5.3) (36.8) Revenue increased by + 4.2m (+1.7%) to 253.3m. The increase is mainly due to a strong LFL&R revenue increase of m (+7.1%) and openings of + 2.7m (+1.1%), partly offset by exits of m (-4.1%) and FX of - 5.2m (-2.1%) EBITDA increased by + 5.8m (16.9%) to 40.2m and the EBITDA margin increased by +2.1 pp to 15.9%. The increase is mainly due to the LFL&R revenue increase and a reduction in operating costs in leased hotels, lower restructuring costs and an increase in fee revenue. This was partly offset by higher costs for marketing (due to timing of activities). EBIT decreased by - 1.0m (-4.8%) to 19.8m. The increase in EBITDA is offset by higher costs for write-downs in line with plan, and increased depreciation costs due to higher capex Net Income decreased by - 5.3m (-36.8%) to 9.1m impacted by higher net financial expenses due to the bond issue and the subsequent consent solicitation process 4

5 Q m contribution to EBITDA from the LFL&R portfolio m Q Q Change m Change % FX Exits Entries One-Offs LFL&R Revenue % % EBITDAR % % EBITDA % % LFL&R (%) EBIT % % FX had negative impact of - 5.2m on revenue and - 1.3m on EBIT. The negative impact of FX on EBIT comes mainly from the fee business (mainly RUB and TRY) Exits include eight Park Inn leases and one Radisson Blu lease with negative impact on revenue of - 8.2m but no impact on EBIT. Exited managed and franchised hotels had a negative impact of - 1.9m on revenue and - 1.4m on EBIT Contribution of + 1.9m from new hotels to EBIT with a strong profit conversion Negative one-offs of - 3.4m mainly due to higher costs for write-downs of - 5.5m, partly offset by lower costs for restructurings of 1.7m On a LFL&R basis, revenue is up m (+7.1%) and EBIT is up + 3.2m (+13.2%) vs last year 5

6 YTD 2018 EBITDA is 21.4m (+32.8%) above last year, improving margin by 3.2 pp to 12.2% Profits and Loss M YTD 2018 YTD 2017 Vs Last Year m % LFL&R Revenue Revenue (12.5) (1.7) Payroll (263.3) (254.6) Other OPEX (221.9) (228.9) EBITDAR % over Revenue 35.8% 33.4% 2.4 pp Rents & Guarantees (168.4) (176.0) Share of income in assoc. 0.1 (0.9) EBITDA % over Revenue 12.2% 9.0% 3.2 pp Depreciations (34.8) (31.3) (3.5) (11.2) Write-downs (8.8) (13.7) EBIT % over Revenue 5.9% 2.6% 3.3 pp Net financial expenses (6.3) (1.9) (4.4) (231.6) Income tax (11.2) (6.6) (4.6) (69.7) Revenue on a comparable basis (LFL&R), increased by m (+4.2%). The decrease of m vs last year is due to exits of m and FX impact of m EBITDA increased by m (+32.8%), which is mainly due to the LFL&R revenue increase, reduction in operating costs in leased hotels and reduction in lease costs. The EBITDA margin increased by 3.2 pp to 12.2% EBIT increased by m (+122.8%) due to the EBITDA increase and 4.9m lower costs for write-downs, partly offset by higher depreciation costs as a consequence of the increase in capex Net Income increased by m (+136.5%). The increase in EBIT is partly offset by higher taxes, due to improved EBT, and higher net financial expenses due to the bond issue in July and the subsequent consent solicitation process in September 4 Net Income

7 YTD m contribution to EBITDA from the LFL&R portfolio m YTD 2018 YTD 2017 Change m Change % FX Exits Entries One-Offs LFL&R Revenue % % EBITDAR % % EBITDA % % LFL&R (%) EBIT % % FX had negative impact of m on revenue and - 3.4m on EBIT. The negative impact of FX on EBIT is mainly related to the fee business (mainly RUB and TRY) Exits include eight Park Inn leases and one Radisson Blu lease with negative impact on revenue of m but positive impact on EBIT of + 2.4m. Exited managed and franchised hotels had a negative impact of - 5.8m on revenue and - 4.1m on EBIT Contribution of + 4.1m from new hotels to EBIT with a strong profit conversion Positive one-offs of 12.3m is mainly due to lower costs for write-downs ( 4.9m), financial advisor fees ( 2.2m) and restructurings ( 2.0m) On a LFL&R basis, revenue is up m (+4.2%) and EBIT is up m (+32.1%) vs last year 7

8 Best Quarter of the year with LFL&R RevPAR increase of +8.9% Both core brands continued to show positive RevPAR developments L/L+R Average Room Rate L/L+R RevPAR 4.0% 4.7% 4.3% 2.4% -0.8% -2.0% L/L+R Occupancy Reported RevPar 8.9% 8.2% 5.6% 1.7% 1.6% -3.6% Reported RevPAR during Q3 achieved the strongest quarter this year with +5.6% above last year, including the negative impact of new openings and exited hotels (-4.0%). LFL&R RevPAR growth for the leased and managed hotels was also the strongest one over the last years with +8.9% mainly driven by room rate (+7.2%). All four regions reported RevPAR LFL&R growth over last year, with the strongest developments in Eastern Europe and the Nordics. All 3 months of the quarter showed positive development Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 NOTE: Like-for-like plus renovations: same hotels in operation plus renovations during same period last year compared at constant exchange rates 8

9 Good evolution of RGI vs competition RGI for both brand above fair-share and in-line with last year RGI DEVELOPMENT Q Q Diff % RGI Leased Hotel RGI Managed Hotel RGI L-f-L&R Managed & Leased Hotels with 3 rd Party RGI Data Positive RGI development vs. Q3 2017, with 2.7% RGI improvement. Best Change since two years. 60% of the hotels improving RGI (95 positive of 159) Leased Hotels RGI driving the growth with +5.4% versus Q3 2017, mainly driven by Nordics (+7.8%) and Central & Southern Europe (+7.5%) Managed RGI above last year by +1.0%, driven by Nordics (+5.2%) and META (+6.8%). BOOKING.COM & TRIPADVISOR RANKING Q Q Diff Booking Index (score) Booking online reviews 86, , % TripAdvisor TOP 10 (% Hotels) 54% 49% -5 pp TripAdvisor TOP 30 (% Hotels) 76% 70% -6 pp Positive trend for Booking.com, in terms of Index and number of online reviews The decrease of the TripAdvisor Top % hotels is due to the change of the TripAdvisor algorithm end Q1 to include apartments properties, thus increasing the number of competitors 9

10 Strong performance in all Areas L/L+R Occupancy L/L+R RevPAR 7.7% 7.2% 3.0% 0.6% 2.2% -1.0% Reported RevPAR was 5.7% above last year due to RevPAR LFL&R growth, partly offset by negative impact of FX (-4.1%). RevPAR LFL&R grew by 9.9%. NORDICS L/L+R Average Room Rate Reported RevPar 10.5% 9.9% 0.5% -4.8% 7.1% 5.7% Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Norway, with ca 52% of the LFL&R room revenue within the region, continued to be the growth driver (11.8%) and significantly outperformed the market, which was at 1.7%. The other two key countries also reported above market results; Sweden 9.1%, vs. 2.9% for the market, and Denmark 8.3%, vs. 1.8% for the market. L/L+R Occupancy L/L+R RevPAR 3.1% -2.0% 4.3% 3.7% 0.0% 2.9% Reported RevPAR was 2.6% above last year due to RevPAR LFL&R growth, partly offset by negative impact of Openings (-4.5%). RevPAR LFL&R grew 5.3%. ROWE 1.3% 0.0% L/L+R Average Room Rate Reported RevPar 0.5% -0.6% 5.3% 2.6% Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 The highest RevPAR LFL&R growth was noted in Belgium (23.9%) and France (11.1%). In the UK, with ca 30% of the LFL&R room revenue in the region, the RevPAR increased 1.5%, negatively impacted by two of our airport hotels. In Germany, with ca 23% of the LFL&R room revenue in the region, RevPAR grew by 4.4%, impacted by renovations and the fair cycle. 10

11 Strong performance in all Areas L/L+R Occupancy L/L+R RevPAR 12.6% 7.2% 9.4% 10.2% 8.7% 12.5% 12.5% 6.3% L/L+R Average Room Rate Reported RevPar 22.6% 12.5% 15.5% 6.1% Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Reported RevPAR was 6.1% above last year. The RevPAR LFL&R growth and the positive impact of exits (1.0%) was partly offset by the negative impact of FX (-7.4%) and openings (-3.1%). RevPAR LFL&R grew 15.5%. EASTERN EUROPE Russia, our key market in the region with ca 42% of the LFL&R room revenue, reported strong growth (26.3%) with the World Cup in July and related events being the key drivers. Turkey (51.6%) continued to recover from the negative impact of the terrorist attacks, attempted coup and unrest last year. MIDDLE EAST & AFRICA L/L+R Average Room Rate L/L+R RevPAR -0.2% 1.3% -0.1% -5.2% L/L+R Occupancy Reported RevPar 10.5% 0.5% 5.4% -6.0% -2.5% -13.3% -13.7% -14.3% Q2 17 Q3 17 Q4 17 Q1 18 Q Q3 18 Reported RevPAR was 10.5% above last year. The RevPAR LFL&R growth and the positive impact of exits (3.7%) and FX (5.4%) offset the negative impact of openings (-4.0%). RevPAR LFL&R grew 5.4% RevPAR LFL&R per market remain mixed, with recovery in several key markets (e.g. Tunisia 25.2% and Egypt 25.1%), but challenges in others (e.g. Saudi Arabia -15.8% and Oman -6.9%). 11

12 Strong like-for-like revenue development in the Lease Business in Q3 EBIT increased by + 5.9m excluding the increase for write-downs of fixed assets Nordics Revenue increased by + 3.9m (+4.1%) due to strong development in the LFL&R portfolio of + 8.4m (+9.1%), partly offset by the strengthening of the Euro (- 3.9m) and the exit of one property (- 0.6m) EBIT increased by + 4.6m (+82.1%). In addition to the positive development in revenue, we have successfully contained operating costs despite the 5.0 p.p. increase in occupancy. EBIT has also been positively affected by 2.2m lower costs for writedowns of fixed assets Rest of Western Europe Revenue decreased by - 2.7m (-2.3%), mainly due to the exit of eight leases at the end of 2017 (- 7.6m). Revenue LFL&R was up + 4.9m (+4.6%) EBIT decreased by - 4.5m (-84.9%), mainly due to 8.0m higher costs for write-downs of fixed assets Nordics Revenue Revenue LFL&R EBIT Q Q Var % Var Rest of Western Europe Revenue Revenue LFL&R EBIT Q Q Var % Var

13 Strong development in the Fee Business in Q3 Revenue increase of 2.8m (7.9%) and EBIT increase of 2.7m (11.3%) Rest of Western Europe Fee revenue increased by 0.2m (1.7%) while LFL&R Fee revenue increased by 0.4m (3.7%) EBIT decreased by 0.1m (-1.4%) Eastern Europe Fee revenue increased by 1.8m (13.0%) due to very strong LFL&R RevPAR development which resulted in a LFL&R Fee revenue increase of 2.9m (21.8%), partly offset by the strengthening of the Euro (- 1.3m) EBIT increased by 0.8m (7.3%) due to the revenue increase, partly offset by higher costs for bad debts Middle East, Africa & Others Fee revenue increased by 0.7m (10.8%), mainly due to new openings ( 0.8m) EBIT increased by 1.7m (41.5%) due to the revenue increase and lower costs for bad debts Revenue NO RoWE EE MEAO Total Q Q Var % Var EBIT NO RoWE EE MEAO Total Q Q Var 0.4 (0.1) % Var 26.7 (1.4)

14 Cash Flow and Balance Sheet Free Cash Flow 29.3m September YTD Sep YTD Cash flow before working capital changes Change in working capital Cash flow from operating activities Investments Free cash flow Financing activities Cash flow for the period In M Sep 31, 2018 Dec 31, 2017 Total assets Net working capital Net cash (net debt) Equity Free cash flow is 19.2m above the same period last year, due to the improved EBITDA, partly offset by higher investments in the lease portfolio Cash flow from financing activities of 210.5m. Proceeds from the bond issue of net 241.4m is partly offset by settlement of the liabilities to financial institutions Net cash position is negative ( -3.4m) by the end of the period. The bond of net 241.6m and the Prizeotel loan of 8.8m is offset by 247.0m in cash and cash equivalents 14

15 Strong expansion across various markets with 32 hotels signed YTD SIGNINGS Q Q YTD 2018 YTD 2017 Hotels Rooms 2,385 1,880 5,691 6,724 Radisson RED Liverpool, United Kingdom Radisson Hotel & Suites, Gdansk, Poland Executing our asset-right strategy: 3 leases signed in key gateway European cities: Rome, Madrid and Liverpool Solid growth of our new brands with 3 Radisson RED, 3 Radisson hotels and 1 Radisson Collection Strengthened our presence in Middle East & Africa with 6 new hotels Park Inn by Radisson Amsterdam City West, The Netherlands Radisson Blu Hotel, Bordeaux, France OPENINGS Q Q YTD 2018 YTD 2017 Hotels Rooms 1,167 1,573 3,133 3,895 Mature market growth: 5 new openings in EU New flagship hotel with Park Inn by Radisson Amsterdam City West Strengthening franchise portfolio with openings in Rome (Italy) Bordeaux (France), Bruges (Belgium), and Larnaca (Cyprus) 15

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17 FEDERICO J. GONZÁLEZ PRESIDENT & CEO, RADISSON HOSPITALITY AB (PUBL) CHAIRMAN, GLOBAL STEERING COMMITTEE RADISSON HOTEL GROUP

18 KNUT KLEIVEN DEPUTY PRESIDENT & CFO RADISSON HOSPITALITY AB (PUBL)

19 Forward Looking Statements This document contains forward looking statements relating to the prospects and growth strategy of Radisson Hospitality AB. These forward-looking statements generally can be identified by reference to future periods or by phrases such as Radisson Hospitality AB or its management believes, expects, anticipates, foresees, forecasts, estimates or other words or phrases of similar meaning. Similarly, statements in this document that describe Radisson Hospitality AB s business strategy, outlook, objectives, plans, intentions, scenarios or goals are also forward-looking statements. We may also make forward-looking statements in other reports, in presentations, in material delivered to shareholders and in press releases. In addition, our representatives may from time to time make oral forward-looking statements. All such information and forecasts involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future and should therefore not be interpreted as guarantees of the future occurrence of such facts and data. Although we believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions, there are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements and Radisson Hospitality AB can give no assurance that our expectations will be attained or that results will not materially differ. The data, assumptions and estimates may change as a result of uncertainties related to the economic, financial, competitive or regulatory environment. Furthermore, past performance is no guide to future performance and persons needing advice should consult an independent financial adviser. The forward-looking statements contained in this document are made only as of the date hereof. Radisson Hospitality AB expressly disclaims any obligation or undertaking to release publicly any updates of any forward-looking statements contained in this document to reflect any change in its expectations or any change in events, conditions or circumstances on which any forward-looking statement contained in this document is based. Radisson Hospitality AB operates in a competitive and rapidly changing environment. It is therefore not in a position to predict all of the risks, uncertainties or other factors that may affect its business, their potential impact on its business, or the extent to which the occurrence of a risk or a combination of risks could have results that are significantly different from those included in any forward-looking statement. The financial information should not be viewed in isolation or as an alternative to actual annual results of operations as presented in accordance with IFRS in our Consolidated Financial Statements. None of these forward-looking statements constitute a guarantee of actual results.