Q Results. Wolfgang M. Neumann, President & CEO Knut Kleiven, Deputy President & CFO July 17, Brussels. Radisson Blu Hotel, Istanbul Pera

Transcription

1 Q2- Results Wolfgang M. Neumann, President & CEO Knut Kleiven, Deputy President & CFO July 17, Brussels Radisson Blu Hotel, Istanbul Pera

2 The macro-economic climate in Europe remains fragile and emerging economies are driving growth Growth of GDP, constant prices (Source: World Bank) Current Projections (%) Europe 0.0 Market RevPAR Performance May YTD Germany 0.6 France -0.1 United Kingdom 0.7 Sweden 1.0 Norway 2.5 Central & Eastern Europe 2.2 Russia 3.4 Turkey 3.4 Sub-Saharan Africa 5.6 South Africa 2.8 EUROPE : +0.7% 12% 10% 8% 6% 4% 2% 0% -2% Percent change from May YTD 0,7% Europe 0,1% -0,5% Eastern Europe Northern Europe 3,3% Southern Europe 0,2% Western Europe Nigeria 7.2 Middle East & North Africa 3.1 Saudi Arabia 4.4 United Arab Emirates 3.1 Modest, positive expectations for GDP growth in Scandinavia; emerging economies continue to be growth drivers; challenging outlook for Euro zone RevPAR growth profile reflects similar pattern with the Middle East & North Africa being the key drivers MIDDLE EASTAFRICA : +8.3% 12% 10% 8% 6% 4% 2% 0% -2% Percent change from May YTD 8,3% Middle EastAfrica 9,7% Middle East 5,4% -0,8% Northern Africa Southern Africa 2 Q2- Results Source: STR Global

3 Q2 : Rising RevPAR, Rising Margins 68.7 RevPAR +6.0% (LL) 14% EBITDA Margin +4.5pp 35m EBITDA + 12m 6.0% LL RevPAR growth, driven by occupancy rise 8.8% LL RevPAR growth in Nordics, boosted by Easter effect 16.6% fee revenue increase, with Middle East and Africa leading the recovery Strict cost control and the terminations of unprofitable leases led to solid conversion of revenue to EBITDA 54% Q2 EBITDA improvement, and 81% in H1 26m EBIT + 15m 124% EBIT improvement 9 MEUR Free Cash Flow improvement in H1 3 Q2- Results

4 Performance growing steadily since 2009 and nearing 2008 peak; accelerating due to Route 2015 initiatives 40 H1 Historical Performance 35 MEUR H1 typically the weaker half of the year, due to Easter effect and slow months of January and February Portfolio in 2008 included 50,100 rooms in operation, compared to 74,600 today After 5 years, there is still a 5.2 MEUR EBITDA and 8.0 MEUR EBIT gap, reflecting the slow pace of the recovery Peak EBITDA: 37.3 MEUR Peak EBIT: 24.2 MEUR EBITDA EBIT 4 Q2- Results

5 More resilience due to shift in business model and launch of Route 2015 REVPAR (EUR) EBITDA (MEUR) Gradually becoming more resilient due to shift in business model RevPAR 15% below the 2007 peak (20% adjusted for inflation) EUR 1 change in RevPAR = MEUR 6-8 change in EBITDA (ca 85% from leases) 5 Q2- Results

6 6 consecutive quarters of occupancy-driven RevPAR growth and increased market penetration (RGI) LL Occupancy LL Average Room Rate LL RevPAR 10% 8% 6% 4% 2% 6.5% 3.0% 2.3% 3.2% 5.6% 5.9% 4.6% 4.2% 5.7% 6.0% 0% -2% 6 Q2- Results

7 Middle East and Africa continue to surge; Nordics up substantially due to Easter effect NORDICS REST OF WESTERN EUROPE 20% LL Occupancy LL Average Room Rate LL RevPAR 20% LL Occupancy LL Average Room Rate LL RevPAR 15% 10% 5% 0% -5% 10.0% 2.4% -1.2% 2.3% 1.7% 1.8% 0.8% 3.4% 0.7% 8.8% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q % 10% 5% 0% -5% 8.6% 10.7% 4.4% 1.5% 3.1% 2.0% 3.6% 2.2% 1.2% 4.2% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q EASTERN EUROPE MIDDLE EAST & AFRICA 20% 15% 10% 5% 0% -5% LL Occupancy LL Average Room Rate LL RevPAR 19.1% 15.3% 17.3% 11.5% 12.2% 11.9% 6.1% 5.7% 4.0% 1.2% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q % 20% 10% 0% -10% -20% -30% -6.1% LL Occupancy LL Average Room Rate LL RevPAR -12.8% -4.2% 10.8% 17.1% 13.0% 7.9% 20.5% 13.5% -27.8% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q Q2- Results

8 Revenue generating initiatives and synergies with Carlson have powered substantial growth in market penetration (RGI) YTD May *omparable Managed & Leased Hotels with 3 rd Party RGI data 8 Q2- Results

9 Hotel signings in line with, with continued focus on fee-based growth in Emerging Markets SIGNINGS Q2 Q2 H1 H1 Hotels Rooms 1,800 2,500 2,900 3,900 Park Inn by Radisson Abuja Kaura, Nigeria Q2 >75% Emerging Markets 100% Fee-based >65% Park Inn Park Inn by Radisson Kigali, Rwanda Q2 Highlights: Park Inn expansion in Sub-Saharan Africa (Kigali, Abuja) and Middle East (Oman, Bahrain) 3 projects to open within 12 months Extension of the profitable Radisson Blu Aarhus, Denmark lease 9 Q2- Results

10 Hotel openings reflect a mix of Mature and Emerging Markets, with emphasis on conversions OPENINGS Q2 Q2 H1 H1 Hotels Rooms 770 1,300 1,700 2,200 Radisson Blu Hotel, Bremen Q2 90% Fee-based Contracts 50% Mature Markets 88% Radisson Blu Park Inn by Radisson Glasgow City Center Q2 Highlights: Conversions: Park Inn Glasgow City Centre (former office building), Radisson Blu Hotel Bremen Opening of our 4 th hotel in Istanbul and 7 th in Turkey (Radisson Blu Hotel Istanbul Pera) 90% fee based (some additional rooms added to existing leased hotel) 10 Q2- Results

11 Our focus on Emerging Markets and Asset Light growth go hand in hand Contract Type Brand Region Pre % 44% 34% 1% 99% 16% 11% 30% 43% Lease driven growth in Nordics Single brand strategy Focus on home markets % 45% 27% 52% 48% 18% 8% 9% 65% Fast expansion in RoWE Growing the Park Inn brand % 10% 69% 32% 3% 65% 25% 38% 9% 29% Switch to Asset Light Strategy Focus on Emerging Markets Leased Managed Franchised Radisson Blu Park Inn Others NOR RoWE EE MEAO 11 Q2- Results

12 Our efforts have resulted in a primarily fee-based portfolio with a greater presence in Emerging Markets In Operation Q2 Pipeline Q2 Total Rezidor Portfolio Q2 by % 16% 19% 40% 47% 4% 13% 38% 50% Emerging Markets 22% 28% 16% 34% 50% Mature Markets NOR RoWE EE MEAO NOR RoWE EE MEAO NOR RoWE EE MEAO 24% 22% 8% 20% 18% 54% 92% 62% Leased Managed Franchised Leased Managed Franchised Leased Managed Franchised 12 Q2- Results 337 Hotels 75,000 rooms 100 Hotels 20,000 rooms Hotels 90-95,000 rooms

13 The combined Carlson-Rezidor presence gives us international exposure and critical mass 10 th Largest in the World 5 th Largest in Europe RANK COMPANY HOTELS ROOMS RANK COMPANY HOTELS ROOMS 1 INTERCONTINENTAL 4, ,000 2 HILTON 3, ,000 3 MARRIOTT 3, ,000 4 WYNDHAM 7, ,000 5 CHOICE 6, ,000 6 ACCOR 3, ,000 7 STARWOOD 1, ,000 8 BEST WESTERN 4, ,000 9 HOME INNS 1, , CARLSON REZIDOR 1, ,000 1 ACCOR 2, ,000 2 BEST WESTERN 1,312 90,600 3 INTERCONTINENTAL ,200 4 GROUPE DU LOUVRE (*) ,400 5 CARLSON REZIDOR (**) ,800 6 NH HOTELES ,800 7 WHITBREAD ,700 8 HILTON ,600 9 MELIA , MARRIOTT ,600 SOURCE I MKG Hospitality (*) Louvre Hotels Group + Concorde Hotels (**) Rezidor + Park Plaza + Radisson Edwardian 13 Q2- Results

14 Financial Update Knut Kleiven, Deputy President & CFO Radisson Blu Hotel, Istanbul Pera

15 Strong revenue increase and solid conversion led to the best H1 performance since 2008 MEUR Q2 Q2 H1 H1 Revenue EBITDAR EBITDAR Margin % 39.0% 34.4% 34.1% 31.6% EBITDA EBITDA Margin % 14.0% 9.5% 7.0% 4.0% EBIT EBIT Margin % 10.5% 4.9% 3.6% -0.2% Financial Net Tax NET RESULTS Q2 Highlights: +10 MEUR in revenue: 16 MEUR in LL revenue growth compensated for negative FX impact (-1.6) and 9 lease terminations (-7.3) 17% increase in fee revenue +15 MEUR in EBITDAR: 10 MEUR higher revenue -4 MEUR operating expenses +12 MEUR in EBITDA: Reduced rent payments from 9 lease terminations +15 MEUR EBIT 3 MEUR reduction in writedowns High tax rate due to losses which are difficult to utilize 15 Q2- Results

16 Flow-through Q2 vs Q2 LL growth driving EBITDA and EBIT improvement Q2- vs Q2- Reported Change FX Hotel Exits New Hotels One-offs Change in Marketing Net Spend LL Revenue EBITDAR EBITDA EBIT FX effect minimal, but could have a larger impact in the coming months Hotel exits had positive impact on margins One-offs in relate to the exit from a management agreement and write downs of fixed assets (both in RoWE) Healthy flow through in the LL portfolio 16 Q2- Results

17 9 MEUR Free Cash Flow improvement in H1 vs Q2 Q2 H1 H1 Cash flow before working capital Change in working capital Cash flow from operating activities Investments Free Cash Flow Positive development in cash flow from operations Working capital improved over Higher maintenance and investments in leased hotels 17 Q2- Results

18 Q2 Leased business Stable revenue, but increased EBIT due to exits 250 Leased Revenue MEUR Nordics: 200 Strong RevPAR growth from Easter effect All three key countries reported RevPAR growth, with Norway leading at 13% 2 leased hotels converted to franchises NO RoWE Total Q2 Q2 Rest of Western Europe: Revenue stable, despite 7 leases converted to management Improvement across all countries, except Belgium EBIT margin increased by 4 p.p., due to exits and fewer write-downs, reaching break-even level EBIT MEUR NO RoWE Total Q2 Q2 18 Q2- Results

19 Q2 Fee business Emerging markets continue to drive the growth Eastern Europe: Continued positive RevPAR development Russia leading recovery with 8% RevPAR growth Declines in Poland and Ukraine due to Euro Fee Revenue MEUR Q2 Q2 5 Middle East, Africa & Others: 0 NO RoWE EE MEAO Total 14% LL RevPAR growth led to 16% improvement in fee revenue Strongest performing region, with significant growth in South Africa, UAE and Saudi Arabia 26% EBIT improvement EBIT MEUR Q2 Q2 5 Rest of Western Europe EBIT negatively impacted by 1.5 MEUR write-down 0 NO RoWE EE MEAO Total 19 Q2- Results

20 3pp EBITDA margin expansion in H1 in line with Route 2015 Goals FOCUS AREAS EBITDA MARGIN UPLIFT OUR FINANCIAL TARGETS Revenue initiatives Fee based room growth Cost savings Rezidor s Initiatives 6-8% Profitability Target Balance Sheet EBITDA margin of 12% over a business cycle Small positive average net cash position Asset management deleveraging CapEx + Asset Management Dividend Policy Approximately one third of annual after-tax income to be distributed to shareholders + Market Recovery over and above inflation Assumes RevPAR growth covers inflation 20 Q2- Results

21 Q&A Park Inn by Radisson Amsterdam Airport Schiphol