Q & FULL YEAR RESULTS BRUSSELS, 10 FEBRUARY 2016

Transcription

1 & FULL YEAR RESULTS BRUSSELS, 10 FEBRUARY WOLFGANG M. NEUMANN, PRESIDENT & CEO KNUT KLEIVEN, DEPUTY PRESIDENT & CFO Radisson Blu Resort & Spa, Gran Canaria Mogan

2 Travel & Tourism remains one of the fastest growing economic sectors Industry fundamentals intact with growing numbers of international tourist arrivals Number of international tourist arrivals in millions Global 1,137 (5%) Global 1,189 (+4%) Global 1,235 (+4%) 580 (+4%) Europe 608 (+5%) Europe 620 (+2%) Europe FC th largest global industry 9.8% Global GDP contribution Accounting for 1 in 11 jobs 4% growth outperforming global economy 7th consecutive year of positive growth 46 million more tourist travelling internationally (+4%) in despite many challenges APAC leads global growth in arrivals (+8%) with all four sub-regions sharing in this growth Mixed results in Europe (+2%); Northern Europe (+6%) & Central / Eastern Europe (+4%) offsetting weaker Western Europe (0%) & Southern Europe / Mediterranean (1%) Africa grew 8% supported by strong rebound in SubSaharan Africa (+12%) and North Africa starting to pick up (+3%) +4% growth in arrivals in the Americas, led by South America and Central America (+6%) Middle East down (-4%) with mixed results among regions destinations Source: UNWTO World Tourism Barometer (January 2017), WTTC T&T Economic Impact 2

3 GDP growth outlook is overall positive Uncertainties related to patchy economic development in some countries, geopolitical tensions and terrorism threat Growth of GDP E 2017FC WORLD Eurozone Denmark France Germany Norway Sweden UK Poland Russia Turkey Egypt Saudi Arabia UAE CIS Sub-Saharan Africa Nigeria South Africa Middle East & North Africa EU crisis: Populism and referendum threats after Brexit vote might impact upcoming elections in France, Germany, and Netherlands and put the Union to test Euro crisis: Continues high sovereign debt levels while Greece continues to depend on repeated IMF support and Italy is faced with a severe banking crisis Oil / commodity prices: Depressed prices continue to put pressure on economies & governments of producing countries Geopolitical tensions: Increased uncertainty and volatility, not just in emerging markets Global terrorism threat: Volatility related to terrorist attacks and heightened security alert levels in key mature & emerging markets Currency fluctuations: Shifting tourism demand within main geographic regions and among EMEA markets Source: IMF, World Economic Outlook Database (Oct & Jan 2017) 3

4 Many markets back to peak with a mixed picture across regions & countries Ongoing challenges in many markets with some positive signals in others Europe % Oct 2008 % change in TTM RevPAR since peak 1.3% France % Oct % Germany % Oct % UK % Oct % % Jul % TTM RevPAR Spain TTM & change Peak Sweden SEK % Dec % Norway NOK % Apr % Denmark DKK % Feb % MEA -6.8% -14.2% Belgium H2 saw stabilisation & reversal of trend TTM results back to positive Norway Heavily impacted by the Paris & Nice attacks France Strong market performance TTM rate at peak with 72% occupancy Denmark Strong summer months (leisure demand) TTM occupancy & rate at peak Severely impacted by recent events including attempted coup Turkey Europe TTM RevPAR growth Occ% TTM Travel & tourism still heavily impacted by March attacks Main issue being Brussels Saudi Arabia Sweden Continues to struggle linked to price of oil & related business Cuts in government spending Russia ADR TTM RevPAR TTM Germany Strong recovery in local currency Rouble strengthening, oil price improvement and sanctions lift could further improve the situation Continues to be one of the strongest markets in W. Europe Trade fair calendar adds volatility Source: Morgan Stanley 4

5 Rezidor welcomes new majority shareholder HNA Tourism Group In December HNA closed the acquisition of Carlson Hotels, and with it the 51.3% shareholding in Rezidor Hotel Group TIMELINE OF EVENTS 27/04/: Announcement of acquisition of Carlson Hotels incl. 51.3% stake in Rezidor 07/12/: Founded in 1993 as regional airline based on Hainan Island (Hainan airlines) Closing of transaction triggering mandatory tender offer for outstanding shares in Rezidor 22/12/: Approx. USD 145bn of assets, USD 46bn annual revenues, and an international workforce of 410,000 across North America, Europe and Asia Announcement of mandatory cash tender SEK /02/2017: Publication of offer document Core subsidiary of HNA Group Global Fortune 500 company focused on 3 core businesses: tourism, logistics and financial services HNA Tourism Group Fully integrated global player with market-leading positions in aviation, hotels and travel services Ambition to build a world-class comprehensive tourism service provider Together with Carlson, owns or manages approx. 2,000 hotels with 330,000 rooms 03/02 10/03/2017: Acceptance period (5 weeks following publication) 24/02/2017: Publication of Board opinion about the offer (latest 2 weeks before end of acceptance period) 15/03/2017: Announcement of offer completion 07/04/2017: Settlement (may be postponed by 9 months from initiation of acceptance period) 5

6 L/L Revenue growth of 4.3% but exits and one-off effects impact results - financial results at a glance Revenue EBITDA Signings 243.1m Reported Revenue, down m (-4.8%) 23.1m EBITDA (- 9.4m) 12 hotels (+8) 9.5% EBITDA margin (-3.2pp) 1,800 rooms (+900) 11.1m L/L Revenue increase (+4.3%) Exit of 4 leases & 1 closure (- 14.2m) Higher marketing & sales costs and bad debt Unfavourable exchange rates (- 8.3m) benefited from revaluation (+ 2.8m) RevPAR Net profit Openings L/L RevPAR 70.5 (+2.4%) 16.9m up 2.6m (+18.2%) 4 hotels (-3) ADR (+0.2%) 7.0% net profit margin 900 rooms (-500) Occupancy 65.2% (+1.4pp) Positive impact from tax asset capitalisation ( 22.3m) 500 rooms net opening (+100) 6

7 L/L RevPar increase of 2.4% mainly from occupancy growth Rezidor RevPAR development L/L Occupancy L/L Average Room Rate L/L RevPAR Strong performance in line with sector & market performance 10% 8.7% 8% 5.7% 6.0% 5.9% 5.4% 6% 5.6% 5.3% 4.9% 5.0% 4.2% 3.5% 4% 4.0% 2.4% 2.7% 2% 3 of 4 regions reported L/L RevPAR growth: Nordics, Eastern Europe, and ROWE 2.4% 1.0% 0.9% 0% -2% 2012 Q1 Q2 Q Q1 Q2 Q Q1 Q2 Q3 Q1 Q2 Q3 NOTE: Like-for-like: same hotels in operation during same period last year compared at constant exchange rates 7

8 Strong performance in the Nordics and stable results in Rest of Western Europe NORDICS L/L Occupancy ROWE L/L Occupancy L/L Average Room Rate 20% 20% 10.0% 9.2% 10% 0% L/L Average Room Rate -0.5% 3.8% -4.0% 9.4% 6.6% 6.9% 10% 4.3% 6.2% 7.0% 5.6% 2.2% 4.8% 0.7% 2.8% 0% 0.5% -2.1% -10% Q Q2 Q3 Q1 Q2 Q3-10% Q Q2 Q3 Q1 Q2 Q3 Norway: Strong occupancy based growth Belgium & France: Still impacted by aftermath of attacks Denmark: Strong rate & occupancy growth UK & Ireland: Continuous positive development Sweden: Growth fuelled by rate growth Germany: Continuous good performance Netherlands: Stable performance 8

9 Continued improvement in Eastern Europe, while Middle East & Africa remains weak EASTERN EUROPE L/L Occupancy 20% MIDDLE EAST & AFRICA L/L Occupancy L/L Average Room Rate 17.4% 20% 17.3% 15.3% 11.9% 14.8% 10.1% 10% L/L Average Room Rate 5.8% 10% 3.3% 5.1% 0.1% 0% -10% 0% -5.5% Q % -3.7% -4.3% -4.5% -6.5% -5.8% Q2 Q3 Q1 Q2 Q3-4.2% Q2 Q3 Q1 Q2 Q3-10% Q Russia: Strong performance based on domestic & Asian business Middle East: Challenges continue in key markets Baltics: Occupancy driven growth via events in Estonia & Latvia Northern Africa: Slowly rebounding from low base Poland: Strong rate uplift from events Southern Africa: Benefitted from reduced visa restrictions and value of the Rand Turkey: Occupancy and rate negatively affected by ongoing events 9

10 Another strong year for signings with increased momentum in 4th Quarter 10% more deals signed SIGNINGS Hotels Rooms FY FY , ,200 7,900 Comments: Continuous strong momentum with 10% more deals vs. driven by Eastern Europe with 7 signings: - 2 Radisson RED signings (Vilnius, Tbilisi) - 2 signings in Russia (Rostov-on-Don, Moscow) due to open within 6 months - Radisson Blu expansion in Odessa, Brasov & Vilnius Expansion into new territory with Radisson Blu Resort Sal on Cape Verde Islands Purely fee-based growth (franchise & management contracts) Radisson RED Hotel, Vilnius, Lithuania Radisson Blu Resort, Sal, Cape Verde 10

11 openings impacted by emerging market delays Net openings in line with previous year OPENINGS Hotels Rooms FY FY ,400 3,600 4,200 Comments: Openings impacted by delays in emerging markets and slippage into 2017 openings focused on mature markets: Radisson Blu Hotel, Mannheim, Germany - Strengthening position in Riga with 2 Park Inn by Radisson properties - Expansion in Germany with Radisson Blu Mannheim - Resort network expansion with Radisson Blu Gran Canaria Mogan Limited exits resulting in positive Net Growth of 1,900 rooms in (vs. 2,000 in ) Park Inn by Radisson Residences Riga Barona, Latvia 11

12 results impacted by one-offs; 5th year of consecutive market share gain Full Year financial results at a glance Revenue EBITDA Signing 961.2m Reported Revenue, down 35.8m (-3.6%) 79.3m EBITDA (- 21.8m) 45 hotels (+4) 8.3% EBITDA margin (-1.8pp) 8,200 rooms (+300) 38.1m L/L Revenue increase (+3.8%) Incl. 5m restructuring costs Exit of 4 leases & 1 temporary closure (- 37.4m) revaluation gain (+ 2.8m) RevPAR Net profit Openings L/L RevPAR 75.8 (+3.2%) 26.4m down 7.8m (-22.8%) 18 hotels (-7) ADR (+2.8%) 2.7% net profit margin 3,600 rooms (-600) Occupancy 68% (+0.3pp) Positive impact from recognition of tax assets ( 22.3m) 1,900 rooms net opening (-100) 5th consecutive year of RGI improvement (+0.5%) Board proposes a dividend of 0.05/share 12

13 Traction in EBITDA margin improvement interrupted by strategic exits & one-offs Underlying EBITDA margin 10.2% % 8.8% 8.3% 7.6% 5.5% 4.1% -0.9% 10.0% Financial target of 12% EBITDA margin over a business cycle reported EBITDA below target but negatively impacted by 18m from special events: 8.0% 5.7% 6.0% 4.8% 3.3% 4.0% 0.3% -0.1% 0.0% 2012 EBITDA EBITDA margin - 5.4m restructuring costs - 2.9m variable salaries - 6.3m negative impact from hotels in cities affected by terrorist attacks (Brussels, Nice, Paris) - 3.1m negative impact of loss making leases leaving the system per end of August 2.0% -2.0% % Margin EBITDA (MEUR) Margin development Underlying EBITDA of 97m with a 10.2% margin EBIT margin 13

14 Asset management progressed with exit concluded for 6 loss making leases in UK Significant improvements made over the last 4 years ACHIEVEMENTS ACHIEVEMENTS Exit of 6 FRI leases in regional UK markets: Exit of 5 leases in Nordics: Exit cost of 15m (fully accounted in ) Effective latest end 2017; 1.8m EBITDA improvement p.a. as of 2018 (plus significant Capex savings) Extension and full renovation of 2 strategic hotels Radisson Blu Royal Viking Hotel, Stockholm, Sweden Radisson Blu Scandinavia, Oslo, Norway 1 in Sweden as of Jan (Radisson Blu Gothenburg, converted to franchise) 3 in Norway as of Sept (Radisson Blu Norge Bergen, Radisson Blu Kristiansand and Park Inn by Radisson Stavanger, the latest two converted to franchise) 1 in Denmark as of Jan 2017 (Radisson Blu Falconer) Restructure and extension of the Radisson Blu Cologne lease with ca. 1.1m EBITDA improvement already in Extension of F&B and meeting facilities of Radisson Blu Oslo Gardermoen Airport, a 5.5m annual EBITDA contributor ASSET MANAGEMENT IMPACT SINCE 2013: Cumulative EBITDA impact of 17.5m for 2017 Approx. 2 percentage points improvement in EBITDA margin 14

15 traction lays foundation for future profitability improvement Rezidor achievements & challenges in ACHIEVEMENTS 5th year of consecutive RGI/market share growth Further Asset Management deals concluded, including exit of 6 leases in UK CHALLENGES Increasing levels of terrorism (Brussels, Paris, Nice, Istanbul ) Weakening of NOK, GBP and Rand versus Solid progress in tax optimization Macro-economic & political environment in Turkey Entering economy segment through prizeotel acquisition (49% shareholding) Oil related business (Norway, Saudi Arabia) 1st Radisson RED hotel opened (Brussels) Accelerated Capex deployment Strong momentum for signings with 45 new hotels signed Oversupply in key Middle Eastern markets Opening delays in emerging markets pipeline Growing OTA s market share and related increase in distribution costs Largest pipeline in Africa solidified 160 certified Safehotels 15

16 FINANCIAL UPDATE KNUT KLEIVEN, DEPUTY PRESIDENT & CFO Radisson Blu Hotel, Lyon

17 Good L/L revenue development but results impacted by exits and one-offs In m vs LY Reported Revenue down 4.8% due to % - Conversion of 3 leases to franchise, exit of 1 lease and temporary closure of one lease for renovation Revenue Negative FX impact of 8.3m due to EUR strengthening vs mainly GBP EBITDAR LFL RevPAR (L&M) - One-off fee revenue 4.0m lower than last year L/L Revenue up 11.1m (4.3%) 32.4% -1.9 pp EBITDA Margin % 9.5% -3.2 pp EBIT EBIT Margin % -4.2% pp NET INCOME EBITDAR Margin % EBITDA EBITDA decreased mainly due to decrease in revenue, soft conversion, higher costs for sales & marketing and bad debts. Last year s numbers positively impacted by revaluation gain ( 2.8m) EBIT down 32.6m due to costs for termination of six lease contracts in the UK of 18.3m and higher costs for depreciation and write-downs of 4.5m Net income positively impacted by capitalisation of tax assets of 22.3m (net) 17

18 Results impacted by challenging trading in some key cities, exchange rate fluctuations & exit costs but helped by capitalisation of tax assets FY In m Reported Revenue down 3.6% due to FY vs LY % - Negative FX impact of 35.6m from EUR strengthening vs. GBP, NOK, RUB and CHF Revenue One-off fee revenue 5.8 lower than last year EBITDAR LFL RevPAR (L&M) EBITDAR Margin % 32.7% -1.5 pp - Conversion of 3 leases to franchise and exit of 1 lease L/L Revenue up 38.1m (3.8%) EBITDA decreased due to challenging trading in some key cities, lower one-off fees and higher central costs due to redundancies - 6.3m decline related to eight hotels in Brussels, Nice and Paris % -1.8 pp EBIT Margin % 0.3% -5.4 pp NET INCOME EBITDA EBITDA Margin % EBIT - 3.4m negative FX impact - Last year positively impacted by revaluation gain ( 2.8m) EBIT negatively impacted by termination costs of 28.9m (1.1) and higher costs for depreciation & write-downs of 6.2m, partly offset by gain on sale of shares in subsidiaries of 1.9m Net income positively impacted by capitalisation of tax assets of 22.3m (net) Board proposes a Dividend of EUR 0.05 per share 18

19 significantly impacted by one-offs FX Hotel Exits New Hotels Change in Write downs Capitalisation of tax assets Other one-offs L/L EBITDAR EBITDA vs - Reported Change Revenue EBIT NET INCOME Strengthening of EUR vs mainly GBP had negative impact of ca. 3% on revenue Hotel exits had a negative impact on the results New hotels include Radisson RED Brussels and Radisson Blu Lyon (hotels re-opened after renovation) Tax assets of 29.3m have been capitalised as a consequence of the adoption of a new TP model, partly offset by the write down of tax assets of 7.0m as a consequence of change of control. Pro-forma tax rate going forward ranging between 25 and 28% Other one-offs negatively impacted EBIT by 25.1m (one-off fee income 4.0m higher last year, revaluation investment Beijing 2.8m last year and termination cost exit of six hotels leases in the UK 18.3m) Weak Like-for-like development during the quarter, mainly due to higher costs for sales & marketing, bad debts, redundancies and depreciation, partly offset by positive income tax development 19

20 Leased results impacted by exits / temporary closure, termination costs and write downs Leased Business Nordics Leased Revenue, MEUR Revenue decreased by 9.6m due to conversion of 3 leases to franchise, exit of 1 lease and the closure of 1 hotel for renovation, partly offset by good L/L RevPAR development 300 EBIT decreased by 2.8m mainly due to relatively weak conversion as costs for sales & marketing, redundancies, rent adjustments and depreciation increased NO Rest of Western Europe Reported Revenue down 0.9m vs last year due to weakening of GBP, partly offset by positive L/L RevPAR development and reopening of Radisson Blu Lyon EBIT decreased by 21.9m, impacted by termination costs for six leases in the UK of 18.3m as well as 2.3m higher costs for write downs of fixed assets RoWE Total EBIT, MEUR 10 0 NO RoWE Total

21 Fee Revenue below last year due to less one-off fee income Fee Business Fee Revenue, MEUR Rest of Western Europe Fee revenue 3.9m lower mainly due to higher one-off fee revenue last year ( 3.7m) due to terminations / renegotiations and negatively impacted by weaker GBP EBIT decreased by 4.0m mainly due to decrease in oneoff fee revenue Eastern Europe NO Fee revenue 0.8m higher than last year due to strong RevPAR development and new hotels EBIT impacted by higher costs for bad debts RoWE Fee revenue 0.4m lower than last year due to L/L RevPAR decrease EE MEAO Total MEAO Total EBIT, MEUR 30 Middle East, Africa & Others EBIT impacted by higher costs for bad debts 0 NO RoWE EE 21

22 Free cash flow and net cash impacted by investments and exit costs FY vs FY Cash flow before working capital changes Change in working capital Cash flow from operating activities Investments Free Cash Flow Dec 31, Dec 31, Balance sheet total Net working capital Net cash (net debt) Equity MEUR Weaker cash flow before working capital mainly due to decrease in EBIT Change in working capital negative mainly due decrease in current liabilities Investments include the acquisition of 49% in prizeotel ( 14.7m) Resulting net cash position is negative ( -20.9m) by the end of the year, mainly due to investments and payment of exit costs 22

23 Accelerated Capex deployment into leased portfolio Supporting future performance & profitability improvement CAPEX DEVELOPMENT (LEASES) CapEx ( millions) 10.0% CapEx deployment of 71m (8.7% of leased revenue) in 8.0% Accelerated Capex Plan to end 2018, after which a normal 5% run rate should apply 6.0% 4.0% Majority spent on guest rooms / public areas 0.0% Higher RevPAR & market share expected from refurbished hotels, increasing total revenue and profitability % of Leased Hotel Revenue (in m) Nordics ROWE TOTAL Timing of CapEx to consider seasonality and market development to limit displacement 2.0% % % %6.3% 5.9% %5.0% 4.7% 3.9%3.5% %

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26 Wolfgang M. Neumann President & CEO

27 Knut Kleiven Deputy President & CFO