Q RESULTS BRUSSELS, 22 OCTOBER 2015 WOLFGANG M. NEUMANN, PRESIDENT & CEO KNUT KLEIVEN, DEPUTY PRESIDENT & CFO

Transcription

1 Q3 215 RESULTS BRUSSELS, 22 OCTOBER 215 WOLFGANG M. NEUMANN, PRESIDENT & CEO KNUT KLEIVEN, DEPUTY PRESIDENT & CFO Radisson Blu Azuri Resort & Spa, Mauritius 1 I Q3-215 Results

2 Q3-7 Q3-8 Q3-9 Q3-1 Q3-11 Q3-12 Q3-13 Q3-14 Q3-15 EBITDA ( m) EBITDA margin Q3 215: Second strongest quarter in Rezidor s history, fuelled by RevPAR growth and network expansion 4 EBITDA development since IPO 5% 3 4% 2 1 3% 2% 1% % -1-1% -2 EBITDA Margin -2% Strong RevPAR growth F&D Revenue increase Network expansion 2 I Q3-215 Results

3 Rest of Western Europe performed strongly as a result of market improvements, but also key initiatives taken in recent years ROWE EBITDA in 3 rd Quarter ( m) KEY DRIVERS RevPAR development: Key cities double digit growth (e.g. Amsterdam, Dublin, Frankfurt) Special events driving RevPAR, e.g. Milan Expo UK performance: Strong market performance in Regional UK Strengthening of GBP Asset Management Exit of leased portfolio in France in 212 Restructuring of leases (ie Brussels, London Heathrow) Fee income stream Expiry of loss making management agreements Reaching of Caps on Shortfalls Good flow through: Timing of marketing expenses One-offs: Lyon negatively impact Q3 214 Compensation payment for the renegotiation of a management agreement in Q I Q3-215 Results

4 A very good quarter for Rezidor with strong RevPAR growth in most key markets and good flow through to earnings L/L RevPAR +8.7% ( 8.) L/L RevPAR growth of +8.7% Rate (+4.5%) and Occupancy (+2.9pp) improved Radisson Blu +8.7%, Park Inn +9.6% Drivers: Sweden & Denmark, some Western & Eastern European countries Revenue +8.6% ( 261.4m) Reported Revenue was 261.4m up by 2.6m or 8.6% L/L Revenue increased by 8.4% ( 2.3m) Revenue increase from strong RevPAR development, increase in F&D revenue and 1.7m compensation payment EBITDA +35.6% ( 35.8m) EBITDA margin increased to 13.7% (+2.7pp) EBITDA 35.8m (+ 9.4m or +35.6%) Increase due to strong RevPAR development and good flow through in leased portfolio EBIT + 7.1m ( 24.4m) EBIT 24.4m (+ 7.1m or 41%) EBIT margin 9.3% (+2.1pp) Good flow through despite one-off cost related to termination of a lease and higher depreciation due to accelerated CapEx 4 I Q3-215 Results

5 Norway Sweden Denmark UK France Germany Russia Lithuania Poland UAE Saudi Arabia South Africa % Change Q3 215 vs. Q3 214 (local currency) Strong Market RevPAR development in Q3, especially in Europe NORDICS ROWE EASTERN EUROPE MEAO 4% 3% Occupancy ADR RevPAR 29.% 26.5% 2% 1% %.4% 14.9% 12.% 5.% 7.3% 5.1% 1.9% 2.6% 13.9% 7.6% -1% Europe sees solid performance (+12.1%) driven by France and recovery in Eastern European countries Nordics with exceptionally strong performance in Sweden & Denmark driven by rate & occupancy Western European countries show good RevPAR performance across the board Russia and other Eastern European countries showing impressive rebound on a constant rate basis Middle East & Africa impacted by still weak performance in UAE, but good growth in Saudi Arabia and South Africa 5 I Q3-215 Results SOURCE: Benchmark Alliance, STR Global

6 Rezidor Q3 RevPAR development strongest since Q3 21 driven by rate & occupancy growth L/L Occupancy L/L Average Room Rate L/L RevPAR 1% 8.7% 8% 6% 4% 2% 2.3% 3.2% 5.6% 5.9% 4.6% 4.2% 5.7% 6.% 5.9% 5.4% 5.% 2.7% 3.5%.9% 2.4% 4.9% % -2% Q3 Q4 Q1 Q2 Q3 Q Q1 Q2 Q3 Q4 213 Q1 Q2 Q3 214 Q4 Q1 Q2 215 Q3 NOTE: Like-for-like: same hotels in operation during same period last year compared at constant exchange rates 3 of 4 regions reported L/L RevPAR growth: Eastern Europe, ROWE and Nordics Strong rate improvement (at constant rate) driven by ROWE and Eastern Europe Occupancy growth driven by Eastern Europe Strongest RevPAR growth since Q I Q3-215 Results

7 Very strong performance in ROWE and good results across the Nordics NORDICS ROWE L/L Occupancy L/L Average Room Rate L/L RevPAR L/L Occupancy L/L Average Room Rate L/L RevPAR 25% 25% 15% 5% 3.8% 2.3% 4.4% -.8% 3.8% 9.2% 15% 5% 4.8% 5.5% 4.5% 4.9% 4.8% 4.3% 6.2% 7.% 9.4% -5% 3.9% -4.% -2.1% -5% -15% -15% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q Norway: occupancy driven growth, particularly strong July due to leisure demand Denmark: Occupancy led growth mainly via leisure transient & groups Sweden: Strong performance linked to events in Stockholm UK & Ireland: Good growth momentum with exceptionally strong results in Ireland Netherlands: Exceptional rate growth with business groups a key driver Belgium & France: Positive development in the majority of key segments Germany: Growth driven by congresses & fairs mainly in August 7 I Q3-215 Results

8 Solid improvements in Eastern Europe as situation in Russia stabilises, while Middle East impacted by weak performance in Saudi Arabia and UAE EASTERN EUROPE MIDDLE EAST & AFRICA L/L Occupancy L/L Average Room Rate L/L RevPAR L/L Occupancy L/L Average Room Rate L/L RevPAR 25% 17.4% 25% 15% 5% 8.4% 6.2% 4.6% -2.1% 11.9% 15% 5% 7.8% 8.9% 6.4% 9.6% 9.5% 5.1%.1% -5% -3.3% -5.5% 3.3% -5% -6.3% -4.2% -15% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q % Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q Russia: RevPAR improvement driven by occupancy growth from domestic demand Ukraine: Occupancy improving but from low base Baltics & Poland: Strong rate uplift supported by occ. growth Middle East: Drop in demand in Saudi Arabia and rate pressure in UAE Northern Africa: Rate improving in Egypt, weak demand in Tunisia Southern Africa: Strong occupancy growth in South Africa Turkey: Strong demand but at lower rate 8 I Q3-215 Results

9 Milestone achieved: 1, rooms in operations and under development across 8 countries in EMEA! 3, 2, 1, Nordics (15,1 rooms) 3, 2, 1, Eastern Europe (28,6 rooms) Rezidor Room Portfolio Under Development 22% 3, 2, In Operation ROWE (29,5 rooms) Under Development 3, Middle East (15,9 rooms) In Operation Under Development In Operation 78% 1, 2, In Operation 9 I Q3-215 Results Under Development 3, 2, 1, Radisson Blu Africa (11, rooms) In Operation Under Development Park Inn 1, In Operation Under Development Leading operator in Russia/CIS & Baltics (KPMG, E&Y) Largest pipeline in Africa with Radisson Blu (W Hospitality) Radisson Blu: Largest upscale brand in Europe (MKG) Radisson Blu: Strongest brand in Norway & Sweden combined (TRAX)

10 Q3 215 Strong momentum in Q3 & YTD signings, well ahead of last year SIGNINGS Q3 215 Q3 214 YTD 215 YTD 214 Hotels Rooms 2,3 1,3 7,1 4,5 Radisson RED Hotel, Glasgow >75% Emerging Markets 75% Managed >7% Radisson Blu Radisson Blu Hotel, Istanbul Ataköy 3 rd Radisson RED signing in EMEA Milestone: 2 th Hotel signed in Turkey, a key focus country Geographic expansion: Cyprus, Slovenia & Iraq 1 I Q3-215 Results

11 Q3 215 Good quarter for openings supported by conversions, Q3 & YTD well ahead of last year OPENINGS Q3 215 Q3 214 YTD 215 YTD 214 Hotels Rooms 1,3 6 2,8 2,6 Park Inn by Radisson Nizhny Tagil 85% Emerging Markets 1% Fee-based 6% Radisson Blu Radisson Blu Metropol Hotel, Helsingborg 6% are conversions of existing hotels 16 th Hotel in Sweden (Helsingborg) 3 Park Inn s for Eastern Europe (2 in Russia) No exits 11 I Q3-215 Results

12 Solid progress in evolution towards a more balanced portfolio with a larger geographic reach In Operation Q3 215 In Pipeline Q3 215 Total Portfolio Q % 12% 21% 53% 23% 88% 61% 18% Franchised Leased Managed Franchised Leased Managed Franchised Leased Managed 17% 19% 1% 12% 27% 15% 3% 34% 62% 25% 29% 29% NORD RoWE EE MEAO 351 hotels 78,2 rooms NORD RoWE EE MEAO 16 hotels 22,3 rooms NORD RoWE EE MEAO 457 hotels 1,5 rooms 12 I Q3-215 Results

13 producing high EBITDA margins in Emerging Markets from assetlight business model 9, EBITDA Mature Markets (ROWE & Nordics) 1% 9, EBITDA Emerging Markets (EE & MEAO) 1% 7, 8% 7, 8% 5, 3, 6% 4% 2% 5, 3, 6% 4% 1, % 1, 2% -1, % -1, % Nordics ROWE margin margin EE MEAO margin margin 53% of our rooms in operation, 13% of our pipeline Relatively stable size of portfolio High proportion of leases and committed contracts Franchise possible in some markets Nordics portfolio performing well, ROWE overall performance impacted by a few loss making leases Low EBITDA margin as mainly lease business CapEx obligations on leases 47% of our rooms in operation, 87% of our pipeline 9% CAGR in rooms since 21 Mainly management contracts Typically high RevPAR markets due to lack of internationally branded / quality hotel supply Relatively stable income (purely fee revenue) with some volatility related to nature of emerging markets High EBITDA margin as marginal direct costs (no central cost allocation) 13 I Q3-215 Results

14 Radisson Blu Hotel Lome, Togo FINANCIAL UPDATE KNUT KLEIVEN, DEPUTY PRESIDENT & CFO 14 I Q3-215 Results

15 Q3 Strong top line growth from RevPAR improvement flowing through to earnings IN m Q3 215 vs LY LFL RevPAR (L&M) Revenue EBITDAR EBITDAR Margin % 37.4% 1. pp EBITDA EBITDA Margin % 13.7% 2.7 pp EBIT EBIT Margin % 9.3% 2.1 pp NET INCOME Revenue up 8.6% due to 8.7% LFL RevPAR improvement Increase in F&D revenue 2 new leases in Oslo One-off fee income of 1.7m EBITDAR Margin improved due to strong RevPAR and good flow through in the leased business Rent expenses decreased further from 29.2% to 28.% of leased hotel revenue EBITDA also positively impacted by lower net costs for Lyon (closed for renovation) 1.2m higher depreciation / write downs, reflecting the increase in CapEx One-off cost to exit a lease agreement affects EBIT by - 1.1m 15 I Q3-215 Results

16 YTD Good Q3 uplift YTD results with a significant improvement in EBITDA margin to 9.3% IN m YTD Sep 215 vs LY LFL RevPAR (L&M) Revenue EBITDAR EBITDAR Margin % 34.2% -.5 pp EBITDA EBITDA Margin % 9.3% 1.2 pp EBIT EBIT Margin % 4.7%.4 pp Revenue up 6.% due to 5.% LFL RevPAR improvement Weakening of Euro 2 new leases in Oslo EBITDAR Margin impacted by timing of marketing costs, increased central costs and changes in provisions for bad debts Rent expenses decreased from 29.7% to 28.7% of leased revenue EBITDA improved by 21.4% due to improved flow-through and lower costs than in 214 related to Lyon EBIT increased by 15.9% affected by write down of renovation costs in one hotel in Rest of Western Europe and increase in depreciation NET INCOME I Q3-215 Results

17 Strong flow-through in the like-for-like portfolio driven by Rest of Western Europe Q3-215 vs Q3-214 Reported Change FX Hotel Exits New Hotels One-offs Change in Central Costs Impact of Change in Marketing Fund L/L Revenue EBITDAR EBITDA EBIT Q3 comments: Exits of hotels including Lyon had positive impact on the results New hotels contributed 3.3m in revenues and.2m on EBIT, including conversion of 2 hotels in Oslo One-offs positively impacted revenue and EBITDA with 1.7m (re-negotiated management agreement) but EBIT was impacted by only.6m due the exit of a lease agreement The increase of central costs reflects the higher accruals for variable remuneration and the growth of the portfolio The marketing expenses are 1.m lower than last year, mainly due to timing differences Strong flow-through to EBIT driven by the performance in Rest of Western Europe 17 I Q3-215 Results

18 Q3 - Leased Business Very strong improvement in Rest of Western Europe Leased Revenue, MEUR Nordics Revenue increased by 2.2m due to improved RevPAR development and two new leases in Oslo, Norway Weakening of NOK vs. EUR negatively impacted Revenue EBIT and EBIT margin decreased due to higher depreciations, write-downs and costs for exit of a lease agreement NO RoWE Total Q3 215 Q3 214 EBIT, MEUR 14 Rest of Western Europe Revenue increased by 12.8m due to the strong development in RevPAR in most countries Appreciation of GBP vs EUR had a positive impact on Revenue EBIT and EBIT margin increased significantly due to good flow through, lower net costs for the hotel closed for renovation in Lyon and net reversals of write-downs NO RoWE Total Q3 215 Q I Q3-215 Results

19 Q3 - Fee Business Fee revenue is up 13.1% due to good RevPAR development and oneoff fee Fee Revenue, MEUR Rest of Western Europe Fee revenue 3.2m higher than last year partly due to one-off income of 1.7m EBIT improved due to revenue increase and lower cost for shortfall guarantees Eastern Europe NO RoWE EE MEAO Total Q3 215 Q3 214 Fee revenue flat. Strong RevPAR development offset by weakening of Ruble 25 EBIT, MEUR EBIT in line with last year 2 Middle East, Africa & Others 15 1 Q3 215 Q3 214 Fee revenue increase due to growth in portfolio and weakening of Euro Increase in revenue has been offset by negative changes in provisions for bad debts 5 NO RoWE EE MEAO Total 19 I Q3-215 Results

20 Strong cash flow from operations YTD 215 vs YTD 214 YTD 215 YTD 214 Cash flow before working capital Change in working capital Cash flow from operating activities Investments Free Cash Flow MEUR Sep 3, 215 Dec 31, 214 Balance sheet total Net working capital Net cash (net debt) Equity Strong cash flow before working capital due to improved EBITDA Change in working capital positive due to changes in accounts receivables and accruals Solid step up in renovation of leased hotels The net cash position is positive ( 37.3m) by the end of the quarter. 2 I Q3-215 Results

21 Accelerated investment in leased portfolio to drive ROI Historic CapEx spent % 6% 5% 4% 3% 5% 5% 6% 7% 7% 6% 5% 4% 3% 2% 1% % Increased CapEx deployment over next 2-3 years, after which a normal 5% run rate will apply Timing of CapEx to consider seasonality and market development to limit displacement By 217, 46% of our leased portfolio will be renovated Nordics: 3,1 rooms ROWE: 4,8 rooms Going forward majority of CapEx plan to be spent on Nordics Majority spent on guest rooms & improvement of guest experience CapEx ( millions) % of Leased Hotel Revenue (in ) 214 YTD 214 YTD 215 Nordics 22.m 14.8m 13.7m ROWE 31.6m 17.5m 32.1m TOTAL 53.6m 32.3m 45.8m ROI expectation for CapEx projects: approx. 15% 21 I Q3-215 Results

22 Q&A 22 I Q3-215 Results Radisson Red Hotel Glasgow