Q4 and Full-Year 2013 Results

Transcription

1 Q4 and Full-Year 2013 Results Wolfgang M. Neumann, President & CEO Knut Kleiven, Deputy President & CFO February 7, Amsterdam / Radisson Blu Hotel Amsterdam, Netherlands

2 An expanding portfolio in the Netherlands Amsterdam: Europe s 3 rd largest hotel market very attractive for both business and leisure travellers and a key development city for Rezidor Three hotels in operation and one to open in Q Both Radisson Blu and Park Inn represented at Schiphol Europe's 4 th busiest airport Radisson Blu Amsterdam City broke all records in 2013 after renovation The Carlson Rezidor Sales Wave Group-wide focus week fully dedicated to Sales and Revenue Generation - kicks off today, 7 th February Entire Management Team participation across Rezidor at all levels Approx 5,000 participants to do 30,000 sales meetings 2 / Q Results

3 Q4-2013: Continued strong RevPAR growth and margins well above last year RevPAR +5.4% (L/L) 11% EBITDA Margin +4.4pp 26m EBITDA + 10m 13m EBIT + 22m L/L RevPAR growth of 5.4%, driven by both occupancy and rate Revenue down 1.9% due to strengthening of the Euro and exit of leases in L/L Revenue was up 4.0% EBITDA margin up 4.4pp to 10.9% Strict Cost Control and the 2012 exit of unprofitable leases led to solid conversion of revenue to EBITDA EBIT margin up 9.0pp to 5.4% Four Asset Management deals signed in Q4, and yet another in January 3 / Q Results

4 Full Year 2013: Margins well above last year and in line with Route 2015 targets RevPAR +5.8% (L/L) 9% EBITDA Margin +3.3pp 81m EBITDA + 30m 44m EBIT + 45m L/L RevPAR growth of 5.8%, driven mainly by occupancy Strong growth in Market Share (RGI): up 1.6% Unchanged Revenue due to the strengthening of the Euro and the exit of leases in L/L Revenue was up 3.2% Fee Revenue up 11.0% due to a strong underlying performance in the emerging markets EBITDA margin up by 3.3pp to 8.8% EBIT margin up by 4.9pp to 4.8% Cash Flow from operating activities up by MEUR / Q Results

5 Strong Occupancy driven RevPAR growth in 2012 & H Average Rate growth increasing in H L/L Occupancy L/L Average Room Rate L/L 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% 5.9% 5.4% 0% -2% L/L Occupancy L/L Room Rates L/L RevPAR Reported RevPAR % % % / Q Results

6 Emerging Markets: South Africa, UAE, the Baltics and Poland were driving the RevPAR growth in Q4 NORDICS REST OF WESTERN EUROPE 25% L/L Occupancy L/L Average Room Rate L/L RevPAR 25% L/L Occupancy L/L Average Room Rate L/L RevPAR 15% 5% 1.7% 1.8% 0.8% 3.4% 0.7% 8.8% 3.8% 2.3% 15% 5% 3.1% 2.0% 3.6% 2.2% 1.2% 4.2% 4.8% 5.5% -5% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q % Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q 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% 15% 5% 12.2% 11.9% 6.1% 5.7% 4.0% 1.2% 8.9% 6.2% 25% 15% 5% 10.8% 17.1% 13.0% 7.9% 20.5% 13.5% 7.8% 8.9% -5% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q % Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q / Q Results

7 Revenue generating initiatives and synergies with Carlson have powered strong growth in Revenue Generation Index (RGI) 2013 Full Year +2.0% +1.6% +1.6% 64% of hotels RGI growth 69% of hotels RGI growth 63% of hotels RGI growth 7 / Q Results

8 Route 2015 yielded an estimated EBITDA-margin improvement of 2.6 pp in 2013 Key Areas Target 2012 EBITDA Margin Impact 2013 EBITDA Margin Impact 2013 Comment Revenue Generation Fee Based Growth 3-4% 0.6% 0.7% 2-2.5% 0.4% 0.3% RGI grew by 1.6% FY 2013 Carlson global partnership and synergies a key driver Increased focus on Global Sales, digital channels, distribution and RevGen optimisation 14 hotels with 3,300 rooms opened 32 hotels signed with 6,400 rooms 100% fee based pipeline of 100 hotels and 19,500 rooms Cost Savings 0.5-1% - 1.2% Cap Utilisation 0.5% 0.3% 0.0% Continued focus on Project FIT (cost & process optimisation) which is ahead of the communicated target of MEUR by 2015 Central Costs MEUR 42.3 (vs. MEUR 47.9 in 2012) 7 hotels filled their cap in 2012 with continued positive contribution from same hotels in 2013 Asset Management - 0.5% 0.4% 6 deals with an EBITDA impact of MEUR 4.1 Will contribute with MEUR 5.8 (+0.6 pp) in 2015 Clear strategy established to accelerate activities for further exits of loss making hotels Total 6-8% 1.8% 2.6% IN LINE WITH TARGET 8 / Q Results

9 MEUR 4.1 EBITDA contribution from Asset Management in 2013 In MEUR Signed in Q Upfront cost 2013 EBITDA Impact Two lease restructurings Signed in Q One lease restructuring One lease restructuring One lease restructuring One contract termination Total Signed in Q announced on Feb 7, 2014 One lease restructuring Total 2013 & Asset Management deals in 2012 (7 leases in France and 2 leases in Sweden) and 2013 had a combined positive effect on the EBITDA margin of ca 1.1 pp. 9 / Q Results

10 Q Q4 Signings: underlying conversion opportunities SIGNINGS Q Q FY 2013 FY 2012 Hotels Rooms 2,100 1,300 6,400 7,100 Radisson Blu Palace Hotel Noordwijk aan Zee, Netherlands 80% Emerging Markets 100% Fee-based 65% Radisson Blu Radisson Blu Le Vendome Hotel Cape Town, South Africa Q4 comments: 40% of the signed rooms in Q4 are conversions of existing hotels Dual brand property in central Moscow (now 11 hotels) in one of our key focus countries 10 / Q Results

11 Q Q4 Openings: in line with last year but FY impacted by delays in emerging markets OPENINGS Q Q FY 2013 FY 2012 Hotels Rooms 940 1,100 3,300 4,000 Park Inn Petrozavodsk, Russia >85% Emerging Markets 100% Fee based 50% Radisson Blu Radisson Blu Paradise Resort & Spa Sochi, Russia Q4 comments: Expansion in Russia with 3 new hotels; Sochi, Petrozavodsk, Yaroslavl Conversion in Germany with PI Göttingen 11 / Q Results

12 Solid turnaround results achieved in 2013, additional strategic opportunities for 2014 and beyond Rezidor reported strong results in 2013 Outperformed the market, thanks to strengthened revenue generation activities Improved profitability; both operational and financial margins, and well in line with our 2015 target Reduced central costs and procurement savings Optimised organisation and processes Successful steps within Asset Management 2012: 9 hotels were exited with annual EBITDA savings of MEUR 2.7 against termination costs of MEUR : 6 deals signed with annual EBITDA savings of MEUR 5.8 Momentum maintained with another deal signed in January Accelerated Capex spend Ca 6-7% of revenues in our leased portfolio, in excess of a run-rate over time of ca 5%. Continue investing at this accelerated rate over the next 2-3 years Market RevPAR rebound in 2013 The market anticipates a strengthening RevPAR growth in 2014 Modest supply growth supports the recovery RevPAR is still below the peak in a majority of the markets 12 / Q Results

13 Board intends to propose a rights issue of approximately MEUR 60 to accelerate strategy and profitability initiatives The capital raised will allow Rezidor to: Pursue additional opportunities within Asset Management Continue to invest in its leased hotel portfolio at an accelerated pace Further drive growth with particular emphasis on the Emerging Markets Given the intention to strengthen the balance sheet, no dividend will be proposed for 2013 Carlson intends to subscribe for its pro rata share of the rights issue Expected completion date April 24 in conjunction with the AGM of the company 13 / Q Results

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

15 Q4 and FY well ahead of last year and in line with Route 2015 targets MEUR Q Q FY 2013 FY 2012 Revenue EBITDAR EBITDAR Margin 33.7% 32.6% 34.5% 32.5% EBITDA EBITDA Margin 10.9% 6.4% 8.8% 5.5% EBIT EBIT Margin 5.5% -3.7% 4.8% -0.1% Tax NET RESULTS Q4 Highlights: Revenue: -5 MEUR Negative FX impact and exit of 9 leases in 2012 Fee revenue up 13% due to strong underlying performance in emerging markets EBITDAR margin: +1.1pp Cost reduction launched in Q Additional high-margin fee revenue EBITDA margin: +4.5pp Lower rent and shortfall guarantees EBIT margin: +9.2pp Besides the improvement in operating performance, the result was also positively impacted by: Lower write-downs of fixed assets vs 2012 Lower termination costs vs 2012 High tax rate due to losses which are not capitalized 15 / Q Results

16 Healthy flow through in the L/L portfolio Q vs Q Reported Change FX Hotel Exits New Hotels One-offs 2012 One-offs 2013 Change in Marketing Net Spend Revenue EBITDAR EBITDA EBIT L/L 2013 vs 2012 Revenue EBITDAR EBITDA EBIT Q4 comments: FX had a negative impact of MEUR 11.9 on revenue and MEUR 1.6 on EBITDA Hotel exits had a negative impact on revenue, but a positive impact on EBITDA and EBIT One-offs in 2013 and 2012 relate to provision and released provisions for onerous contracts, termination costs and write-downs of fixed assets 16 / Q Results

17 Q Leased Business Substantial EBIT improvement in ROWE Nordics: Revenue down due to FX and 2 leases converted to franchise contracts last year EBIT margin up 0.5pp to 9.6% despite the negative revenue development. Mainly explained by the MEUR 0.9 termination cost in Q Rest of Western Europe: Revenue impacted by FX and the exit of 7 leases last year Excluding the write down of Fixed Assets and the exit costs, EBIT improved from MEUR -4.5 in 2012 to MEUR 1.3 mainly due to reduced rent 17 / Q Results

18 Full Year Leased Business Overall lease business turned profitable in for the first time since 2008 Nordics: Revenue was stable vs Negatively impacted by FX EBIT improved by ca 10% to MEUR 29.5 Rest of Western Europe: Revenue was almost flat vs RevPAR developed favourably in several markets but Revenue was negative impacted by FX and the exit of 7 leases last year EBIT improved substantially but is still negative (MEUR -13.5) including MEUR 5 in one offs 18 / Q Results

19 Fee revenue and margins continues to grow in support of the shift in business model Fee Revenue Fee EBITDA Margin, % % 58% 73% 62% 54% 53% 52% 60% 80% 70% 60% 80 43% 50% 40% 60 30% 40 20% 20 10% % Total Fees grew by 11% to MEUR Management Fees increased by 5.8% to MEUR 34.9 Incentive Fees increased by 16.2% to broadly the same level MEUR 33.7 Licence Fee from our franchised hotels grew by 12.0% to MEUR 8.4 Marketing and Reservation Fees increased by 11.4% to MEUR / Q Results

20 Q4 - Fee Business Strong development in EBIT and EBIT margin Rest of Western Europe: Fee revenue increased due to additional franchised hotels and a general positive RevPAR development EBIT increased from MEUR 2.6 to MEUR 7.1 mainly due to release of provisions for onerous contracts Eastern Europe: Fee revenue improved due to opening of new hotels and good RevPAR development in several countries and markets EBIT-margin down 1.7pp to 54.0% due to increased provisions for bad debt Middle East, Africa & Others: Fee revenue up mainly due to strong RevPAR development in several key markets. EBIT margin followed; up 1.5pp to 53.6% 20 / Q Results

21 Full Year Fee Business Strong performance in fee business; EBIT increased by 29% Rest of Western Europe: Fee Revenue grew by 11% due to a combination of good RevPAR growth and increase in number of hotels Eastern Europe: Revenue and EBIT broadly in line with last year. Some negative impact from FX Middle East, Africa & Other: Good improvement in Revenue as a result of more hotels in operation and strong RevPAR growth in some key markets EBIT improved by MEUR 3.4 to MEUR 17.0 due to the above mentioned reasons 21 / Q Results

22 Strong development in cash flow from operations 2013 vs 2012 Q Q Cash flow before working capital Change in working capital Cash flow from operations Investments Free Cash Flow MEUR Dec 31, 2013 Dec 31, 2012 Balance sheet total Net working capital Net debt (net cash) Equity Good improvement in cash flow from operations Change in Working Capital negative impacted by change in business model Solid step up in renovation of leased hotels The cash position is negative (MEUR -10.5) by the end of / Q Results

23 Accelerated CapEx in 2013 to continue over the next 2-3 years CapEX, MEUR % of Leased Revenue 60 7% 50 6% % 4% 3% 2% 10 1% % CapEx in 2013 amounted to MEUR 47.7 Currently investing ca 6-7% of revenue in the leased portfolio Normal run-rate over time of ca 5% Done in close cooperation with property owners Refers mainly to refurbishment of guest rooms Largest project planned for 2014 Radisson Blu Lyon Radisson Blu Airport Hotel Oslo Radisson Royal Viking Hotel Stockholm Park Inn London Heathrow Radisson Blu Scandinavia Hotel Oslo 23 / Q Results

24 3.3pp EBITDA margin expansion in 2013 in line with Route 2015 goals FOCUS AREAS EBITDA MARGIN UPLIFT 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 Accelerated CapEx spend 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 24 / Q Results

25 Q&A Radisson Blu Resort & Congress Centre, Sochi /