Q & Full Year RESULTS BRUSSELS, 22 nd February 2019

Transcription

1 Q & Full Year RESULTS BRUSSELS, 22 nd February 2019 FEDERICO J. GONZÁLEZ, PRESIDENT & CEO KNUT KLEIVEN, DEPUTY PRESIDENT & CFO Radisson Collection Strand Hotel, Stockholm

2 Q4 Key developments Radisson applies for de-listing from Nasdaq Stockholm Following its Mandatory Tender Offer, the Jin Jiang and SINO-CEEF consortium holds more than 90% of the RH AB shares and votes in Radisson Hospitality AB (publ) The consortium has requested the initiation of a compulsory redemption process regarding the remaining shares Radisson Hospitality AB (publ) Board of Directors has resolved to apply the de-listing of the company shares from Nasdaq Stockholm Last trading day will be announced as soon as receiving the confirmation from Nasdaq Stockholm A Nominating Committee will not be appointed ahead of the Company s Annual General Meeting 2

3 Key Highlights Q Revenue financial and EBITDA results margin at a in glance line with guidance Revenue 959.2m Reported Revenue, - 8.1m vs. LY (-0.8%) due to a strong LFL&R revenue increase (+4.5%) offset by the exit of eight leases in 2017 and two leases in 2018 (- 36.2m) as well as FX (- 22.7m) 962.0m LFL&R Revenue, m vs. LY (+4.5%) mainly driven by the strong performance in the lease portfolio in the Nordics m (+6.3%) RevPAR Reported RevPAR +1.8%, negatively impacted by FX RevPAR LFL&R +5.8% mainly driven by the strong performance in the Nordics (supported by ramp-up of hotels under renovation 2017) and Eastern Europe EBITDA 103.7m Reported EBITDA, m vs. LY (+26.3%) 10.8% EBITDA margin (+2.3 p.p.) Strong operational performance supported by cost advantage initiatives in the 5-year operating plan Dividends The Board of Directors proposed that no dividend is distributed Guidance 2019 We expect Revenue LFL&R to increase % Weexpect to reach an EBITDA margin between % Implementation of IFRS 16 as from 1 st January 2019 will result in right-of-use assets of m and lease liabilities of m Note: LFL&R is Like for like portfolio plus renovations at constant exchange rate 3

4 Full Year 2018 EBITDA well ahead of last year and historically the highest Net Income affected by financial expenses due to the bond issuance and a tax provision Profits and Loss M FY 2018 FY 2017 vs. LY m % LFL&R Revenue Revenue (8.1) (0.8) Payroll (322.2) (347.8) Other OPEX (311.6) (304.9) (6.7) (2.2) EBITDAR % over Revenue 33.9% 32.5% 1.4 pp Rents & Guarantees (222.4) (231.7) Share of income in assoc. 0.7 (0.8) 1.5 N/A EBITDA % over Revenue 10.8% 8.5% 2.3 pp Depreciations (47.0) (42.2) (4.8) (11.4) Write-downs (23.9) (21.0) (2.9) (13.8) Termination of contracts etc. (1.1) (4.2) EBIT % over Revenue 3.3% 1.5% 1.8 pp Net financial expenses (12.9) (2.0) (10.9) (545.0) Income tax (15.2) (8.3) (6.9) (83.1) Net Income (0.8) (18.2) Revenue, on a comparable basis ( LFL&R ), increased by m (+4.5%). The decrease of - 8.1m vs. LY is due to exits of m and FX impact of m EBITDA is m (+26.3%) vs. LY, which is mainly due to the LFL&R revenue increase and reduction in operating costs in leased hotels, supported by cost advantage initiatives in the 5-year operating plan EBIT is m (+115.6%) vs. LY due to the EBITDA increase and lower costs for termination of lease contracts, partly offset by higher costs for depreciations and writedowns of fixed assets Net Income is - 0.8m (-18.2%) vs. LY. The increase in EBIT is offset by financial expenses due to the bond issuance (- 10.5m) and a tax provision in Sweden (- 6.5m) 4

5 Full Year m contribution to EBITDA from the LFL&R portfolio M FY 2018 FY 2017 Change % FX Exits New Hotels One-Offs LFL&R LFL&R (%) Revenue (8.1) (0.8%) (22.7) (36.2) % EBITDAR % (9.5) (10.0) 6.5 (1.2) % EBITDA % (4.6) (1.6) 6.5 (1.2) % EBIT % (3.9) (1.6) 6.5 (0.9) % FX had negative impact of m on revenue and - 3.9m on EBIT. The negative impact of FX on EBIT is mainly related to the fee business (mainly RUB and TRY) Exits include nine Park Inn leases and one Radisson Blu lease with negative impact on revenue of m, but positive impact on EBIT of + 3.4m. Exited managed and franchised hotels had a negative impact of - 7.2m on revenue and - 5.0m on EBIT Contribution of + 6.5m from new hotels to EBIT with a strong profit conversion Negative one-offs of - 0.9m is mainly due to higher costs for restructurings and IT transformation (- 4.1m), writedowns of fixed assets (- 3.2) and retention (- 0.9m), partly offset by lower costs for termination of leases (+ 3.2m), change of CEO last year (+ 2.0m) and financial advisory fees (+ 1.8m) On a LFL&R basis, revenue is up m (+4.5%) and EBIT is up m (+33.8%) vs. LY 5

6 Full Year 2018 LFL&R RevPAR +5.8% ahead of last year Both core brands continued to show positive RevPAR developments L/L+R Average Room Rate L/L+R RevPAR 4.7% 2.0% 2.4% -2.0% 4.3% -0.8% 1.6% 1.3% -3.6% 8.2% 2.4% 1.6% L/L+R Occupancy Reported RevPar 9.0% 3.3% 5.6% 2.8% 1.6% 5.8% 2.3% 1.9% 1.7% Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 FY 18 NOTE: Like-for-like plus renovations: same hotels in operation plus renovations during same period in 2017 compared at constant exchange rates Reported RevPAR in 2018 increased +1.7% vs. LY, with a significant recovery in the second semester, despite the negative impact of FX LFL&R RevPAR growth for the leased and managed hotels was +5.8% vs. LY, with a significant contribution of the second (+8.2%) and third semester (+9.0%) The growth was mainly driven by average rate (3.8%) reflecting the strategy to maximize the performance in unconstrained demand All Areas improving year on year RevPAR with an important growth in Easter Europe (+14.4%), supported by one-off events, and Nordics (+7.6%), supported also by the ramp up of 2017 renovations (+32.4%) 6

7 Full Year RGI Performance +1.4% above competition RGI development BOOKING.COM & TRIPADVISOR RANKING FY 2017 FY 2018 Diff % RGI Leased Hotel RGI Managed Hotel RGI L-f-L&R Managed & Leased Hotels with 3 rd Party RGI Data FY 2017 FY 2018 Diff Booking Index (score) 83.7% 84.2% +0.5 p.p. Booking online reviews TripAdvisor TOP 10 (% Hotels) 53.3% 47.8% - 5.5p.p. TripAdvisor TOP 30 (% Hotels) 76.4% 70.2% - 6.2p.p. Positive RGI development in 2018 by 1.4% with Q4 being the best quarter since the last two years 59% of the hotels improving RGI (95 positive of 162) Leased Hotels driving the growth with 1.6% versus 2017, mainly driven by Nordics (+3.1%) and Central & Southern Europe (+2.6%) Positive trend for Booking.com, in terms of Index and number of 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 Managed RGI Change increasing by +1.4% vs LY, driven by Middle East and Africa (+3.1%) and Nordics (+3.5%)

8 Full Year Strong performance in all Areas NORDICS ROWE L/L+R Occupancy L/L+R RevPAR L/L+R Average Room Rate Reported RevPar 7.7% 7.2% 3.0% 2.2% 0.5% 0.6% -1.0% -4.8% 10.5% 9.9% 8.3% 7.6% L/L+R Occupancy L/L+R RevPAR L/L+R Average Room Rate Reported RevPar 7.1% 5.7% 6.9% 4.1% Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 FY 18 Reported RevPAR +4.1% vs. LY due to RevPAR LFL&R growth of 7.6%, offset by negative impact of FX ( 4.7%) Norway (53% of the room revenue share) grew by 9.4%, strongly supported by the ramp up of 2017 renovations (+39%). Sweden and Denmark (30% and 15% of the share) grew +5.6% and +4.2%, both supported also by a strong performance of renovations (+5% and +22%) 3.1% 4.3% 3.7% -2.0% 0.0% 2.9% 1.3% 0.5% 5.3% 2.1% 2.3% 0.0% -0.6% 2.6% 1.5% 0.9% Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 FY 18 Reported RevPAR +0.9% vs. LY with a RevPAR LFL&R growth of 2.3%, offset by negative impact of FX ( 3.0%) Highest RevPAR LFL&R growth in Belgium (+14%), Italy (7%), France and Netherlands (+6% each). In the UK (ca 25% of the LFL&R share) the RevPAR was stable (+0.3%), negatively impacted by two of our airport hotels. In Germany (ca 22% of share) RevPAR came short -1.0% vs. LY, impacted by the renovations in Frankfurt and Cologne 8

9 Full Year Strong performance in all Areas EASTERN EUROPE MIDDLE EAST & AFRICA L/L+R Occupancy L/L+R Average Room Rate L/L+R RevPAR Reported RevPar 22.6% 15.5% 12.6% 9.4% 12.5% 12.5% 14.4% 7.2% 12.5% 6.1% 6.5% 3.0% 10.2% 8.7% 6.3% -1.9% 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% 10.3% 0.5% 5.4% 2.4% 0.5% 0.2% Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 FY 18 Reported RevPAR was 6.5% vs. LY, negatively impacted by FX (-7.5%) RevPAR LFL&R grew by 14.4%, entirely driven by average rate (+13.9%) and strongly supported by the World Cup in Russia. Russia, (with ca 56% of the LFL&R room revenue share) grew +24. Turkey (12% of the share) continued to recover with a +45% of growth -2.5% -6.0% -13.3% -13.7% -14.3% Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 FY 18 Reported RevPAR was 0.2% vs. LY, negatively impacted by FX (-7.0%) RevPAR LFL&R grew +0.5% mainly supported by a recovery in volumes (+5.2%) vs. LY RevPAR LFL&R per market remain mixed, with a recovery in several markets (e.g. Egypt 27%, Rwanda +82%, Kenya +19%, Morocco 42%), but challenges in key countries with UAE (16% of share) -4%, South Africa (13%) -0.8% and Saudi Arabia (10%) -13.5% 9

10 Full Year Strong LFL revenue development in the Lease Business EBIT increased by m Nordics Revenue increased by + 8.2m (+2.2%) due to strong development in the LFL&R portfolio of m (+6.9%), partly offset by the strengthening of the Euro (- 13.8m) and the exit of one property (- 1.0m) EBIT increased by m (+238.6%). In addition to the positive development in revenue, we have successfully contained operating costs despite the 2.8 p.p. increase in occupancy for LFL&R hotels. EBIT has also been positively affected by 14.2m lower costs for write-downs of fixed assets Rest of Western Europe Revenue decreased by m (-6.3%), mainly due to the exit of eight leases at the end of 2017 and one lease in 2018 (- 28.1m). Revenue LFL&R was up + 3.9m (+0.9%) EBIT decreased by - 7.6m, mainly due to m higher costs for write-downs of fixed assets, partly offset by increase in EBITDA of + 8.9m and lower costs for terminations of contracts of + 2.9m Nordics Revenue Revenue LFL&R EBIT FY FY Var % Var Rest of Western Europe Revenue Revenue LFL&R EBIT FY (6.5) FY Var (27.6) 3.9 (7.6) % Var (6.3) 0.9 N/A 10

11 Full Year Good development in the Fee Business Revenue increase of 4.4m (3.4%) and EBIT increase of 7.4m (9.3%) Rest of Western Europe Fee revenue increased by 1.5m (3.7%) while LFL&R fee revenue increased by 0.9m (2.6%) EBIT increased by 1.6m (7.0%), mainly due to the fee revenue increase Eastern Europe Fee revenue increased by 0.5m (1.1%). The LFL&R fee revenue increase of 5.2m (12.5%) is partly offset by the strengthening of the Euro versus the Russian Rouble and the Turkish Lira EBIT increased by 0.3m (0.9%) due to the fee revenue increase Middle East, Africa & Others Fee revenue increased by 1.0m (3.3%), mainly due to new openings ( 3.6m) EBIT increased by 4.2m (22.8%) due to the fee revenue increase and lower costs for bad debts Revenue ( m) NO RoWE EE MEAO Total FY FY Var % Var EBIT ( m) NO RoWE EE MEAO Total FY FY Var % Var

12 Full Year Cash Flow and Balance Sheet Free Cash Flow improved by 34.4m FY Cash flow before working capital changes Change in working capital Cash flow from operating activities Investments (86.4) (73.7) Free cash flow 33.1 (1.3) Financing activities Cash flow for the period (0.5) In M Dec 31, 2018 Dec 31, 2017 Total assets Net working capital (84.2) (48.6) Net cash (net debt) (0.5) (31.7) Equity Improved cash flow before working capital due to increase in EBITDA and less tax paid Positive change in working capital, mainly due to higher accrued expenses per end of 2018 More cash used in investing activities due to additional investments in the leased portfolio Cash flow from financing activities of 209.6m. Proceeds from the bond issuance of net 240.5m is partly offset by settlement of the liabilities to financial institutions Net cash position is negative (- 0.5m) by the end of the period. The bond of net 241.6m and the Prizeotel loan of 8.9m is offset by 249.9m in cash and cash equivalents 12

13 Remarkable expansion of new brands and destinations 40 hotels signed in 201 SIGNINGS FY 2018 FY 2017 Radisson Collection Hotel, Basilica Budapest, Hungary Radisson RED Vienna, Austria Hotels Rooms 7,196 7,476 Signings in line with strategy with 17 out of 40 new signings within the EU in 2018 FY Continuation of the asset-light strategy in emerging markets (13 feebased deals in ME, 8 in Africa, 2 in Rus. & CIS) 7 leases signed in total in 2018 Very strong growth of new brands (5 Collections, 8 REDs, 8 Radissons signed FY) OPENINGS FY 2018 FY 2017 Hotels Rooms 4,083 5,039 Nofa Resort Riyadh, A Radisson Collection Hotel, Saudi Arabia Radisson Blu Hotel Reussen, Andermatt, Switzerland 11 openings within EU in key locations (incl. Vienna, Amsterdam and Oslo) Emerging market growth: 6 new openings in Middle East & 3 in Africa (Nigeria) All openings in 2018 were asset-light (management & franchise) 13

14 Q4 Results

15 Q4 - Strong operational performance offset by one-off costs 1 Profits and Loss M Q Q vs. LY m % LFL&R Revenue Revenue Payroll (85.9) (93.2) (7.3) (7.8) 1 Revenue increased by + 4.4m (+1.8%) to 246.0m. Strong performance in LFL&R hotels is partly offset by exit of 8 leases in 2017 and 2 leases in 2018 as well as the strengthening of the Euro. LFL&R revenue increased by 12.3m (5.4%) 2 Other OPEX (89.7) (76.0) (13.7) (18.0) EBITDAR (2.0) (2.8) % over Revenue 26.8% 30.0% (3.2 pp) Rents & Guarantees (54.0) (55.7) Share of income in assoc EBITDA % over Revenue 6.9% 7.0% (0.1 pp) Depreciations (12.2) (10.9) (1.3) (11.9) Write-downs (15.1) (7.3) (7.8) (106.8) 2 3 EBITDA increased by + 0.2m (+1.2%) to 17.0m, which is due to the LFL revenue growth and reduction of operating costs in leased hotels, offset by one-offs (mainly restructuring and IT transformation). EBITDA adjusted for one-offs is 8.3m vs. LY EBIT decreased by - 6.2m (-147.6%) to m. The decrease is mainly due to higher costs for write-downs of fixed assets 3 Termination of contracts etc. (0.1) (2.8) EBIT (10.4) (4.2) (6.2) (147.6) % over Revenue (4.2%) (1.7%) (2.5 pp) Net financial expenses (6.6) (0.1) 6.5 (650.0) Income tax (4.0) (1.7) (2.3) (135.3) 4 Net Income decreased by m (-250.0%) to m, due to the decrease in EBIT, higher financial expenses due to the bond issuance ( -4.9m), write-downs of financial investments ( -1.2m) and a tax provision in Sweden ( -6.5m) 4 Net Income (21.0) (6.0) (15.0) (250.0) 15

16 Q4-6.4m contribution to EBITDA from the LFL&R portfolio M Q Q Change % FX Exits New Hotels One-Offs LFL&R LFL&R (%) Revenue % (2.4) (8.9) % EBITDAR (2.0) (2.7%) (1.0) (2.2) 2.4 (8.1) % EBITDA % (0.5) (8.1) % EBIT (10.4) (4.2) (6.0) (150.2%) (0.4) (13.1) % FX had negative impact of - 2.4m on revenue but only - 0.4m on EBIT Exits include nine Park Inn leases and one Radisson Blu lease with negative impact on revenue of - 7.4m but positive on EBIT of + 1.0m. Exited managed and franchised hotels had a negative impact of - 1.5m on revenue and - 1.0m on EBIT Contribution from new hotels of + 2.4m to EBIT with a strong profit conversion Negative one-offs of m is mainly due to higher costs for restructurings, IT transformation and write-downs of fixed assets On a LFL&R basis, revenue is up m (+5.4%) and EBIT is up + 4.9m (+37.2%) vs. LY 16

17 Q4 - LFL&R RevPAR +3.4% ahead of last year Both core brands continued to show positive RevPAR developments L/L+R Average Room Rate L/L+R RevPAR 4.7% 2.0% 2.4% -2.0% 4.3% -0.8% 1.6% 1.3% -3.6% 8.2% 2.4% 1.6% L/L+R Occupancy Reported RevPar 9.0% 5.6% 1.6% 3.3% 2.8% 2.3% Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 NOTE: Like-for-like plus renovations: same hotels in operation plus renovations during same period in 2017 compared at constant exchange rates Reported RevPAR during Q4 increased +2.8% vs. LY, being the second strongest quarter in 2018, despite the negative impact of FX LFL&R RevPAR growth for the leased and managed hotels was +3.3% vs. LY, with a significant contribution of Leased (+5.4%) The growth was mainly driven by volumes (2.3%) reflecting the strategy to improve occupancy in constrained days without losing average rate (+1.1%) Full Year RevPAR LFL&R grew, with the strongest developments in Eastern Europe and the Nordics All 3 months of the quarter showed positive results 17

18 Q4 - Strong like-for-like revenue development in the Lease Business EBIT increased by + 6.5m excluding the increase for write-downs of fixed assets Nordics Revenue increased by + 2.8m (+3.0%) due to strong development in the LFL&R portfolio of + 5.6m (+6.0%), partly offset by the strengthening of the Euro (- 2.2m) and the exit of one property (- 0.6m) EBIT increased by + 7.7m (+1,540%). In addition to the positive development in revenue, we have successfully contained operating costs despite the 4.9 p.p. increase in occupancy for LFL&R hotels. EBIT has also been positively affected by 6.3m lower costs for write-downs of fixed assets Rest of Western Europe Revenue decreased by - 4.9m (-4.6%), mainly due to the exit of eight leases at the end of 2017 and one lease in 2018 (- 6.8m). Revenue LFL&R was up + 1.6m (+1.6%) EBIT decreased by - 9.0m (-391.3%), mainly due to m higher costs for write-downs of fixed assets, partly offset by increase in EBITDA + 2.8m and lower costs for terminations of contracts of + 2.9m Nordics Revenue Revenue LFL&R EBIT Q Q Var % Var ,540 Rest of Western Europe Revenue Revenue LFL&R EBIT Q (11.3) Q (2.3) Var (4.9) 1.6 (9.0) % Var (4.6) 1.6 (391.3) 18

19 Q4 - Continued strong development in the Fee Business Revenue increase of 3.8m (11.7%) and EBIT increase of 2.9m (14.1%) Rest of Western Europe Fee revenue increased by 0.6m (5.9%) while LFL&R fee revenue increased by 0.3m (3.3%) EBIT was flat vs. LY Eastern Europe Fee revenue increased by 0.3m (2.7%). The LFL&R fee revenue increase of 0.8m (7.4%) is partly offset by the strengthening of the Euro versus the Russian Rouble and the Turkish Lira EBIT was flat vs. LY, since the positive impact of the revenue increase and lower costs for bad debts is offset by exceptional marketing costs of 2.1m Middle East, Africa & Others Fee revenue increased by 1.8m (22.5%), mainly due to new openings ( 1.3m) EBIT increased by 1.8m (34.6%) due to the fee revenue increase and lower costs for bad debts Revenue ( m) NO RoWE EE MEAO Total Q Q Var % Var EBIT ( m) NO RoWE EE MEAO Total Q Q Var % Var

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21 FEDERICO J. GONZÁLEZ PRESIDENT & CEO

22 KNUT KLEIVEN DEPUTY PRESIDENT & CFO

23 Forward Looking Statements This document contains forward looking statements relating to the prospects and growth strategy of Radisson AB. These forward-looking statements generally can be identified by reference to future periods or by phrases such as Radisson 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 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 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 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 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.