INTERIM REPORT January-June 2013

Transcription

1 INTERIM REPORT January-June 2013 Second quarter, 2013 Like-for like ( L/L ) RevPAR was up by 6.0%. Revenue increased by 4.2% to MEUR (238.9). On a L/L basis Revenue increased by 7.0%. EBITDA amounted to MEUR 34.9 (22.7), and the EBITDA margin was 14.0% (9.5). Profit after tax amounted to MEUR 17.4 (6.2). Basic and diluted Earnings Per Share was EUR 0.12 (0.04). Ca 1,800 new rooms were contracted and ca 800 new rooms opened. Half year, 2013 L/L RevPAR was up by 5.9%. Revenue increased by 2.3% to MEUR (445.8). On a L/L basis Revenue increased by 3.9%. Contents Comments from the CEO 2 RevPAR development 3 Income statement 4 Comments by region 5 Balance sheet 6 Cash flow and liquidity 6 Financial statements 10 EBITDA amounted to MEUR 32.1 (17.7), and the EBITDA margin was 7.0% (4.0). Profit after tax amounted to MEUR 6.2 (-7.9). Basic and diluted Earnings Per Share was EUR 0.04 (-0.05). Cash flow from operating activities amounted to MEUR 6.6 (-10.7). Ca 2,900 new rooms were contracted and ca 1,700 new rooms opened. MEUR Q Q H H Revenue EBITDAR EBITDA EBIT Profit/loss for the period EBITDAR margin, % 39.0% 34.4% 34.1% 31.6% EBITDA margin, % 14.0% 9.5% 7.0% 4.0% EBIT margin, % 10.5% 4.9% 3.6% -0.2%

2 Comments from the CEO Continued strong RevPAR development; EBITDA margin expansion in line with Route 2015 turnaround plan We see a modest, demand driven, recovery in the EMEA hotel market despite continued macroeconomic uncertainties. During the quarter, the Nordics posted a strong RevPAR performance benefitting from the Easter timing. Western and Eastern Europe also showed good developments. The markets in the Middle East and Africa continued to show a positive trend, and witnessed a double digit RevPAR growth. Our Route 2015 turnaround plan has continued to deliver positive results. We gained further market share and noted solid improvement in profitability. EBITDA margin increased by 4.5 percentage points and resulted in the best Q2 performance since The Easter timing contributed an estimated 1 percentage point to the margin uplift. Our investment program also gained momentum in line with our plans. During the quarter, we added 1,800 rooms to the pipeline and opened 800 rooms. More than 90% of the new rooms were under fee based contracts, which support our asset-light strategy. The visibility for the next quarter and the rest of the year is still low. Maintaining cautious optimism, we remain strongly focussed on capturing market share, tight cost control, asset management and growth in emerging markets. Wolfgang M. Neumann, President & CEO Market development May YTD hotel market RevPAR in Europe is slightly ahead of last year. As per STR Global, RevPAR in Europe grew by 1.7% May YTD (at constant exchange rates) driven via increased occupancy (1.8%). The European performance remains well below the strong development reported for the US market where RevPAR was up 6.3% May YTD; the US RevPAR was driven not only by increased occupancy (2.0%) but also via increased room rates (4.2%). Overall European RevPAR development continues to be negatively impacted by the on-going economic instability with May impacted by additional public holidays in a number of key countries. The results vary greatly by country from a low of -6.7% in Finland to a high of +11.9% in Ireland with key countries such as Germany (+1.1%) and the UK (-1.9%) having modest movements. The Middle East and Africa continues to experience a strong RevPAR development, 8.3% May YTD, driven by both occupancy and room rates. The best performing countries within the region were Oman (17.5%), Bahrain (11.2%) and the UAE (11.0%) all having double-digit RevPAR growth. Second quarter summary Rezidor s L/L RevPAR increased by 6.0% in the second quarter. As in previous quarters, most of the increase was a result of higher occupancy. On a like-for-like basis revenue grew by 7.0%. Both RevPAR and overall revenue was positively impacted by the timing of Easter. The revenue improvement, including a 17% growth in fees from managed and franchised hotels, resulted in an EBITDA increase of MEUR 12.2 to MEUR 34.9 and the EBITDA margin improved by 4.5 percentage points to 14.0%. EBIT increased by MEUR 14.5 to MEUR 26.2 and the EBIT margin by 5.6 percentage points to 10.5% Q3 Q4 Q Revenue by quarter Q2 Q3 Q4 Q Q2 p. 2/23

3 Strategies and development Rezidor is focused on hotel management and operates the Radisson Blu, Park Inn by Radisson, Hotel Missoni and Regent Hotels & Resorts brands. Rezidor s strategy is to grow with management and franchise contracts and only exceptionally with leases. Rezidor is operating in 56 countries and the strategy is to further expand in the emerging markets of Russia/CIS and Africa. In the second quarter, Rezidor opened three new hotels with ca 450 rooms and ca 350 rooms were added to existing hotels. Four hotels with ca 380 rooms left the system. Contracts were signed for 11 new hotels with ca 1,800 rooms. All openings and signings were under management or franchise contracts. RevPAR development Second quarter, 2013 L/L RevPAR for leased and managed hotels improved by 6.0% versus last year primarily via increased occupancy. L/L RevPAR for leased hotels grew by 6.0%. The strongest month in the quarter was April which was negatively impacted last year by Easter and the related holidays. All four geographic segments reported L/L RevPAR growth over last year. The strongest development was seen in the Middle East and Africa region, as travel continues to return to most of the countries suffering from unrest last year, combined with double-digit growth in South Africa and the United Arab Emirates. The Nordics also had a strong performance in the quarter primarily linked to the reverse of the Easter and related holidays impact in April last year with Norway leading the growth. Eastern Europe RevPAR development was also positive at a similar pace as in the first quarter with the Baltics and Russia being the key drivers. ROWE had a RevPAR growth of 4.2% in the quarter, with May below last year based on the impact of additional public holidays this year as the main key factor. RevPAR development for the quarter is presented in the table below. RevPAR Q H L/L growth 6.0% 5.9% FX impact -1.8% -1.3% Units out 1.7% 2.6% New openings -2.4% -2.6% Reported growth 3.6% 4.5% Q Change Nordics Rest of Western Europe Eastern Europe Middle East, Africa & Others L/L RevPAR 8.8% 4.2% 1.2% 13.5% 6.0% L/L Occupancy 4.2% 4.3% 5.1% 9.6% 5.4% L/L Room Rates 4.5% -0.2% -3.7% 3.6% 0.5% Reported RevPAR 11.8% 3.3% -5.3% 12.0% 3.6% Group L/L Occupancy growth by quarter L/L Room Rates growth by quarter L/L RevPAR growth by quarter 7% 6% 5% 4% 3% 2% 1% 0% Q3 Q4 Q Q2 Q3 Q4 Q Q2 4% 3% 3% 2% 2% 1% 1% 0% -1% -1% -2% Q3 Q4 Q Q2 Q3 Q4 Q Q2 7% 6% 5% 4% 3% 2% 1% 0% Q3 Q4 Q Q2 Q3 Q4 Q Q2 p. 3/23

4 Income statement Second quarter, 2013 Total revenue grew by 4.2%, or MEUR 10.0, compared to last year. If adjusted for the exit of nine leased hotels at the end of 2012, revenue from leased hotels grew in line with the RevPAR growth. Fee revenue however was up 16.6% mainly due to strong RevPAR growth in Middle East and Africa. Revenue was also positively impacted by the timing of Easter, estimated at MEUR 7. The change in revenue compared to the same period last year is presented in the table below. MEUR L/L New Out FX Change Rooms Revenue F&B Revenue Other Hotel Revenue Total Leased Revenue Fee Revenue Other Revenue Total Revenue EBITDAR improved by MEUR 14.7 to MEUR 97.0 and the EBITDAR margin increased by 4.6 percentage points to 39.0% versus 34.4% in Q The main reasons for the improvement were the revenue growth noted above, the impact of the cost reduction initiatives, the 2012 Q2 writedown of a receivable of MEUR 2.3 related to a management agreement in ROWE and lower central marketing costs of MEUR 1.0. EBITDA improved by MEUR 12.2 to MEUR 34.9 and the EBITDA margin by 4.5 percentage point to 14.0% due to a combination of the above and the impact from the exit of nine leased hotels at the end of last year. Rent as a percentage of leased hotel revenue decreasead from 29.4% to 29.2%. Following the EBITDA margin improvement, EBIT was MEUR 26.2 versus MEUR 11.7 in Q and the EBIT margin improved by 5.6 percentage points to 10.5%. Profit after tax amounted to MEUR 17.4 compared to MEUR 6.2 last year. Further financial information per region is provided on page 5. Six months ended June 30, 2013 Total revenue increased by 2.3%, or MEUR 10.2, compared to last year. As for the quarter, revenue was negatively impacted by the exit of nine leased hotels at the end of The increase was also the result of a strong growth in the fee business (14.8%) which is a direct result of the increased number of hotels under management contracts but also from good RevPAR development in Eastern Europe, the Middle East and Africa. The change in revenue compared to the same period last year is presented in the table below. MEUR L/L New Out FX Change Rooms Revenue F&B Revenue Other Hotel Revenue Total Leased Revenue Fee Revenue Other Revenue Total Revenue EBITDAR improved by MEUR 14.9 to MEUR as a result of the growth in revenue combined with additional high-margin fee revenue. The increase in EBITDAR versus last year was also helped by a MEUR 2.3 write-down of fee receivables following the termination of a loss-making management contract with performance guarantee in Q Furthermore, the net costs related to central marketing was MEUR 2.9 below the same period last year. The EBITDAR margin increased by 2.5 percentage points to 34.1%. EBITDA increased by MEUR 14.4 to MEUR 32.1 for the first six months of the year, broadly in line with the increase in EBITDAR. Rental expenses as a percentage of leased hotels revenue was reduced by 0.4% to 30.4%. Shortfall guarantees was MEUR 5.4 versus MEUR 4.8 last year. EBIT for the period was MEUR 16.2 versus MEUR -0.8 for the same period last year. Write-downs of fixed assets amounted to MEUR 1.2 for the period and relates to a few leased hotels in Rest of Western Europe. In Q2 2012, a write-down of MEUR 3.9 was done, primarily related to one leased hotel in the same geographical segment. Profit after tax amounted to MEUR 6.2 compared to a loss after tax of MEUR 7.9 in last year. EBITDAR, MEUR EBITDAR-margin, % EBITDA, MEUR EBITDA-margin, % EBIT, MEUR EBIT-margin, % Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q % 40% 35% 30% 25% 20% 15% 10% 5% 0% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q % 10% 5% 0% -5% Q3 Q4 Q Q2 Q3 Q4 Q Q2 15% 10% 5% 0% -5% -10% p. 4/23

5 Q2 Comments by Region Nordics MEUR Q Q Change L/L RevPAR, EUR % Total Revenue % EBITDA % EBITDA margin, % 17.3% 13.5% 3.8 pp EBIT % EBIT margin, % 13.5% 9.4% 4.1 pp L/L RevPAR grew by 8.8% with the key factor being the timing of the Easter and related public holidays impacting April positively this year. May was soft in terms of RevPAR development, mainly due to additional public holidays. All three key countries had RevPAR growth in the quarter led by Norway with 13.1%. Total revenue increased by MEUR 7.7 (or 7.1%) compared to last year. The increase was mainly related to the strong RevPAR development, but also due to a hotel being under renovation last year. Due to the substantial increase in revenue, the margins improved and EBIT was MEUR 5.5 above the same period last year. Rest of Western Europe MEUR Q Q Change L/L RevPAR, EUR % Total Revenue % EBITDA % EBITDA margin, % 10.4% 5.9% 4.5 pp EBIT ,900.0% EBIT margin, % 6.9% 0.3% 6.6 pp L/L RevPAR grew by 4.2% driven by an increase in occupancy of the same size. As for the hotels in the Nordics, only May was below last year as it was negatively impacted by additional public holidays and lower fairrelated business, particularly in Germany. All of the key markets in Rest of Western Europe noted a RevPAR rise with Switzerland leading the way with 13.5%. Belgium was the only key market with a RevPAR decline. Leased revenue increased by MEUR 0.6 (or 0.6%) compared to last year. The exit of the seven leased hotels in France on December 31, 2012 had a negative impact on revenue, but a positive impact on the margins and results. EBIT increased by MEUR 7.6 to MEUR 8.0. Besides above mentioned factors, the increase was also impacted by the write-down of fee receivables of MEUR 2.3 as well as MEUR 2.7 in higher write-downs of fixed assets in Eastern Europe MEUR Q Q Change L/L RevPAR, EUR % Total Fee Revenue % EBITDA % EBITDA margin, % 76.6% 77.5% -0.8 pp EBIT % EBIT margin, % 75.7% 76.5% -0.8 pp The hotels in Eastern Europe experienced a modest growth in L/L RevPAR of 1.2% in the second quarter. Overall occupancy was up 5.1%, but room rates were reduced by 3.7 %. Russia led the way, with RevPAR growth of 8.0%, followed closely by the Baltics. Poland, which grew RevPAR in the first quarter, dropped versus last year in the second quarter. The main reason was EURO 2012, the European Soccer Championship. Ukraine experienced the same trend. Fee revenue increased by MEUR 0.5 versus last year, due to the growth of the portfolio. Profits and profit margins developed in line with the revenue increase. Middle East, Africa and Others MEUR Q Q Change L/L RevPAR, EUR % Total Fee Revenue % EBITDA % EBITDA margin, % 70.3% 65.5% 4.8 pp EBIT % EBIT margin, % 68.8% 63.6% 5.2 pp L/L RevPAR improved by 13.5% driven mainly by occupancy, but also with an increase in room rates. South Africa led the way with a RevPAR growth of 19.0%. The United Arab Emirates and Saudi Arabia also experienced strong RevPAR growth. Fee revenue increased by MEUR 0.9 mainly as a result of the RevPAR growth. EBITDA and EBITDA-margin came in above last year as a result of the strong increase in RevPAR. Central costs Central costs for the quarter amounted to MEUR 10.0 and were MEUR 0.2 lower than last year. p. 5/23

6 Comments to the balance sheet Non-current assets were in line with year-end Net working capital, excluding cash and cash equivalents, but including current tax assets and liabilities, at the end of the period was MEUR (-51.6 at year-end 2012). Cash and cash equivalents decreased by MEUR 1.2 from year-end 2012 to MEUR 7.4 at the end of the quarter. Bank overdrafts increased by MEUR 11.7 to MEUR 37.8 as a result of the decrease in working capital and investments carried out during the first six months of the year. Compared to year-end 2012, equity increased by MEUR 0.7 to MEUR MEUR 30-Jun Dec 12 Balance sheet total Net working capital Net debt (net cash) Equity Cash flow and liquidity Due to the improved operating performance, cash flow from operations (before change in working capital) amounted to MEUR 21.2 in H1 2013, an improvement of MEUR 15.9 compared to the same period last year. Cash flow from change in working capital amounted to MEUR -14.6, which was MEUR 1.4 better than in H Cash flow from investing activities was MEUR -20.6, compared to MEUR during the same period last year. At the end of Q2 2013, Rezidor had MEUR 7.4 in cash and cash equivalents. The total credit facilities available for use by the end of the quarter amounted to MEUR MEUR 1.9 was used for bank guarantees and MEUR 37.8 was used for overdrafts, leaving MEUR 70.3 available for use. The tenor of its committed overdraft facility and credit line ranges between one and four years, combined with customary covenants. Net interest bearing liabilities amounted to MEUR 19.9 (6.3 at year-end 2012). The change was primarily due to use of overdrafts to cover the seasonally weakest first quarter of the year. Net debt/cash, defined as cash & cash equivalents plus short-term interest-bearing assets minus interest-bearing financial liabilities (short-term & long-term), amounted to MEUR (-17.5 at year-end 2012). MEUR H H Cash flow before working capital changes Change in working capital Cash flow from investing activities Free cash flow Subsequent events There are no significant post balance sheet events to report. Material risks and uncertainties No material changes have taken place during the period and reference is therefore made to the detailed description provided in the annual report for The general market, economic and financial conditions as well as the development of RevPAR in various countries where Rezidor operates, continue to be the most important factors influencing the company s earnings. Management is continuously analysing ways to improve the performance of the hotel portfolio, currently with a particular focus on how to increase the profitability of the leased business in ROWE. Future cash flow projections related to leases or management agreements with performance guarantees are sensitive to changes in discount rate, occupancy and room rate assumptions. Changes in such assumptions may lead to a renewed assessment of the value of certain assets and the risk for loss making contracts. The financial impact of exiting lossmaking contracts is uncertain and it cannot be ruled out that an exit could lead to a cash outflow which is currently not fully reflected in the reported liabilities of the Group. The Parent Company performs services of a common Group character. The risks for the Parent Company are the same as for the Group. Seasonal effects Rezidor is active in an industry with seasonal variations. Sales and profits vary by quarter and the first quarter is generally the weakest. For quarterly revenue and margins, see table on page 21. Sensitivity analysis With the current business model and portfolio mix Rezidor estimates that a EUR 1 RevPAR variation would result in a MEUR 6 8 change in EBITDA. Future cash flow projections related to leases or management agreements with performance guarantees are sensitive to changes in discount rates, occupancy and room rate assumptions. Changes in such assumptions may lead to a renewed assessment of the value of certain assets and the risk for loss making contracts. p. 6/23

7 Presentation of the Q2 results On July 17, 2013 at 10:00 (Central European Time) a combined telephone conference and live webcast (in English) concerning the report will be presented by the President & CEO, Wolfgang M. Neumann and Deputy President & CFO, Knut Kleiven. To follow the webcast, please visit To access the telephone conference, please dial: Sweden: +46 (0) Sweden toll-free: UK: +44 (0) UK toll-free: France: +33 (0) France toll-free: US: US toll-free: Confirmation code: For a replay of the conference call please visit Financial calendar 2013 Q results: October 22, 2013 Q results: February 7, 2014 Q results: April 24, 2014 This quarterly report comprises information which Rezidor Hotel Group AB (publ) is required to disclose under the Securities Markets Act and/or the Financial Instruments Trading Act. It was released for publication at 07:30 Central European Time on July 17, For further information, contact Knut Kleiven Deputy President & CFO Tel: Fax: knut.kleiven@carlsonrezidor.com The Rezidor Hotel Group Corporate Office Avenue du Bourget 44 B-1130 Brussels Belgium Tel: Fax: Website: About the Rezidor Hotel Group The Rezidor Hotel Group is one of the most dynamic and fastest growing hotel companies in the world. The group currently features a portfolio of 434 hotels with 95,000 rooms in operation and under development in 70 countries across Europe, the Middle East and Africa. Rezidor operates the core brands Radisson Blu and Park Inn by Radisson, as well as Regent Hotels & Resorts, and Hotel Missoni, a lifestyle brand which is developed worldwide following a licence agreement with the iconic Italian fashion house Missoni. Rezidor is a member of the Carlson Rezidor Hotel Group. For more information, visit p. 7/23

8 Statement from the Board of Directors and the CEO The Board of Directors and the CEO declare that the half-year report provides a fair view of the development of the Group s and the Parent Company s financial position and result of operations and describes material risks and uncertainties facing the Parent company and the companies included in the Group. Stockholm, July 17, 2013 Trudy Rautio Chairman of the Board Staffan Bohman Vice Chairman of the Board Wendy Nelson Board Member Göte Dahlin Board Member Anders Moberg Board Member Douglas M. Anderson Board Member Göran Larsson Employee Representative Wolfgang M. Neumann President & CEO p. 8/23

9 Report on review of interim report Introduction We have reviewed the accompanying interim consolidated balance sheet of Rezidor Hotel Group AB (publ) (Corp. i.d. no ) as of 30 June 2013 and the related interim consolidated statements of income, changes in equity and cash flows for the half-year then ended. Management is responsible for the preparation and presentation of this consolidated interim financial information in accordance with International Accounting Standard 34 Interim financial reporting and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this interim financial information based on our review. Scope of Review We conducted our review in accordance with the recommendation SÖG 2410 issued by the Institute for the Accounting Profession in Sweden which is substantially consistent with International Standard on Review Engagements 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the accompanying consolidated interim financial information is not prepared, in all material respects, in accordance with International Accounting Standard 34 and, for the Parent Company the Swedish Annual Accounts Act. Stockholm, July 17, 2013 Deloitte AB Thomas Strömberg Authorized Public Accountant p. 9/23

10 Condensed consolidated statement of operations MEUR Q Q H H Revenue F&B and other related expenses Personnel cost and contract labour Other Operating expenses Insurance of properties and property tax Operating profit before rental expense and share of income in associates and depreciation and amortisation and gain on sale of fixed assets (EBITDAR) Rental expense Shares of income in associates and joint ventures Operating profit before depreciation and amortisation and gain on sale of fixed assets (EBITDA) Depreciation and amortisation Write-downs Operating profit/loss (EBIT) Financial income Financial expense Profit/loss before tax Income tax Profit/loss for the period Attributable to: Owners of the company Non-controlling interests Profit/loss for the period Basic average no. of shares outstanding 146,320, ,320, ,320, ,320,902 Diluted average no. of shares outstanding 148,351, ,320, ,351, ,320,902 Earnings per share, in EUR Basic Diluted Consolidated statement of comprehensive income Profit/loss for the period Other comprehensive income: Items that will not be reclassified subsequently to profit or loss: Actuarial gains and losses Tax on actuarial gains and losses Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of foreign operations Tax on exchange differences recognised directly in equity Fair value gains and losses on cash flow hedges Tax on fair value gains and losses on cash flow hedges Other comprehensive income for the period, net of tax Total comprehensive income for the period Attributable to: Owners of the company Non-controlling interests p. 10/23

11 Condensed consolidated balance sheet statements MEUR 30-Jun Dec 2012 ASSETS Intangible assets Tangible assets Investments in associated companies and joint ventures Other shares and participations Pension funds, net Other long-term receivables Deferred tax assets Total non-current assets Inventories Other current receivables Derivative financial instruments Other short term investments Cash and cash equivalents Total current assets TOTAL ASSETS EQUITY AND LIABILITIES Equity attributable to equity holders of the parent Non-controlling interests Total equity Deferred tax liabilities Retirement benefit obligations Other long-term liabilities Total non-current liabilities Liabilities to financial institutions Other current liabilities Total current liabilities TOTAL EQUITY AND LIABILITIES Number of ordinary shares outstanding at the end of the period 146,320, ,320,902 Number of ordinary shares held by the company 3,681,138 3,681,138 Number of registered ordinary shares at the end of the period 150,002, ,002,040 p. 11/23

12 Consolidated statement of changes in equity MEUR Opening balance as of Jan 1, 2012 as previously reported Share capital Other paid in capital Other reserves Retained earnings incl. net profit/loss for the period Attributable to equity holders of the parent Noncontrolling interests Total equity Impact of change in accounting policy Restated opening balance as of Jan 1, Loss for the period, as restated Other comprehensive income: Currency differences on translation of foreign operations Tax on exchange differences recognised in other comprehensive income Total comprehensive income for the period Transactions with owners: Long term incentive plan Restated ending balance as of Jun 30, Loss for the period, as restated Other comprehensive income: Actuarial gains and losses on defined benefit plans Tax on actuarial gains and losses on defined benefit plans Currency differences on translation of foreign operations Tax on exchange differences recognised in other comprehensive income Total comprehensive income for the period Transactions with owners: Long term incentive plan Restated ending balance as of Dec 31, Profit for the period Other comprehensive income: Actuarial gains and losses on defined benefit plans Tax on actuarial gains and losses on defined benefit plans Currency differences on translation of foreign operations Tax on exchange differences recognised in other comprehensive income Fair value gains and losses on cash flow hedges Tax on fair value gains and losses on cash flow hedges Total comprehensive income for the period Transactions with owners: Long term incentive plan Ending balance as of Jun 30, p. 12/23

13 Condensed consolidated statement of cash flow MEUR Q Q H H Operating profit/loss Non cash items Interest, taxes paid and other cash items Change in working capital Cash flow from operating activities Purchase of intangible assets Purchase of tangible assets Other investments/divestments Cash flow from investing activities External financing, net Cash flow from financing activities Cash flow for the period Effects of exchange rate changes on cash and cash equivalents Cash and cash equivalents at beginning of the period Cash and cash equivalents at end of the period p. 13/23

14 Parent Company, condensed statement of operations MEUR Q Q H H Revenue Personnel cost Other operating expenses Operating loss before depreciation and amortization Depreciation and amortization expense Operating loss Financial income Financial expense Profit/loss before tax Income Tax Profit/loss for the period Parent Company, statement of comprehensive income Profit/loss for the period Other comprehensive income: Total comprehensive income for the period Parent Company, condensed balance sheet statement MEUR 30-Jun Dec 2012 ASSETS Intangible assets Tangible assets Shares in subsidiaries Deferred tax assets Total non-current assets Current receivables Total current assets TOTAL ASSETS EQUITY AND LIABILITIES Equity Current liabilities Total current liabilities TOTAL EQUITY AND LIABILITIES p. 14/23

15 Parent Company, statement of changes in equity MEUR Share capital Share premium reserve Retained earnings incl. net profit/loss for the period Total equity Balance as of Dec 31, Long term incentive plan Total comprehensive income for the period Balance as of Jun 30, Long term incentive plan Total comprehensive income for the period Balance as of Dec 31, Long term incentive plan Total comprehensive income for the period Balance as of Jun 30, Comments to income statement The primary purpose of the Parent Company is to act as a holding company for the Group s investments in hotel operating subsidiaries in various countries. In addition to this main activity, the Parent Company also serves as a Shared Service Centre for all hotels in Sweden. The main revenue of the company is internal fees charged to the hotels in Sweden for the related administrative services provided by the Shared Service Centre. In Q and YTD 2013 the intercompany revenue of the Parent Company amounted to MEUR 0.9 (0.8) and MEUR 1.7 (1.6) respectively. The intercompany costs in Q and YTD 2013 amounted to MEUR 1.7 (2.4) and MEUR 3.7 (5.0) respectively. In Q and YTD 2013, financial income was mainly related to group contribution received of MEUR 3.5 (5.9) and MEUR 4.9 (7.4) respectively. Comments to balance sheet At the end of the quarter the intercompany receivables amounted to MEUR 0.1 (14.1 at year-end 2012) and the intercompany liabilities to MEUR 37.4 (46.6 at year-end 2012). The changes in the balance sheet since year-end are mainly related to changes in short-term intercompany borrowing and lending. Notes to condensed consolidated financial statements Basis of preparation The interim report has been prepared in accordance with the Swedish Annual Accounts Act and International Accounting Standard (IAS) 34 Interim Financial Reporting. The interim report has been prepared using accounting principles consistent with International Financial Reporting Standards (IFRS). The interim report for the Parent Company has been prepared in accordance with Swedish Annual Accounts Act and Recommendation RFR 2, Accounting for Legal Entities, issued by Swedish Financial Accounting Standards Council. The same accounting policies, presentation and methods of computation have been followed in this interim report as were applied in the company s annual report for the year ended December 31, 2012, except for the impact of the adoption of the standards and interpretations described below. Amended and new standards are IAS 1 Presentation of Financial Statements (concerning presentation of items of other comprehensive Income only), IFRS 13 Fair Value Measure-ment and the revised IAS 19 Employee Benefits. IFRS 13 Fair Value Measurements The new standard provides guidance on fair value measurements including additional disclosure requirements in interim reports as required by the amendments to IAS 34. The implementation of IFRS 13 did not have any impact on the company s valuation method for availablefor-sale assets. The carrying value of these instruments amounts to MEUR 6.1 as of June 30, Revised IAS 19 Employee Benefits The company has adopted the revised standard IAS 19 Employee Benefits in the current year. The amendments to IAS 19 change the accounting for defined benefit plans and termination benefits. The most significant change relates to the accounting for changes in defined benefit obligations and plan assets. The amendments require all actuarial gains and losses to be recognised immediately through other comprehensive income, which means that the corridor approach is eliminated in order for the net pension asset or liability recognised to reflect the full value of the plan deficit or surplus. Furthermore, the interest cost and expected return on plan assets used in the previous version of IAS 19 are replaced with a net interest amount, which is calculated by applying the discount rate to the net defined benefit liability or asset. The IAS 19 amendments have been applied retrospectively and comparative information for 2012 have been restated. Unrecognised actuarial gains and losses at January 1, 2012 have been recognised directly in equity as a changed accounting principle. The impact of the application of the amendments to IAS 19 is presented in the table on the next page. p. 15/23

16 MEUR As previously reported IAS 19R Adjustments As restated Jan 1, 2012 Pension funds, net Retirement benefit obligations Deferred tax, net asset Equity (12 months) Loss for the period Other comprehensive income, net of tax Total comprehensive income for the period Dec 31, 2012 Pension funds, net Retirement benefit obligations Deferred tax, net Equity H (6 months) Loss for the period Other comprehensive income, net of tax Total comprehensive income for the period Incentive programmes The AGM in 2011 has approved a long-term equity settled performance-based incentive programme to be offered executives within Rezidor. Based on the outcome of certain performance criteria, defined as growth in earnings per share and total shareholder return relative to a defined peer group, the participants of the programme may be awarded shares in the company at the end of the vesting period (2014). The maximum number of shares that can be awarded in the 2011 programme is 867,000. A second long-term equity settled incentive program was approved by the AGM on April 24, The program is comprised of both matching shares and performance shares. Participants qualifying for the matching part of the program must meet certain requirements, including a share holding requirement of at least three years and continuing employment with the company. Exemptions may be prescribed in specific cases. Participiants qualifying for the performance part of the program must also meet the requirement regarding continuing employment. In addition, a performance target based on Rezidor Group s cumulative earnings per share for the financial years 2013 to 2015 must be met. The maximum number of shares that can be awarded in the 2013 programme is 1,163,248. The subscription period is still open at the date of this report. More information will be given in the report for the third quarter. Share buy-back The number of treasury shares held by the company at the end of the quarter was 3,681,138, corresponding to 2.5% of all registered shares. The average number of its own shares held by the company during Q2 was 3,681,138 (3,681,138). The shares have been bought back in 2007 and 2008 following authorisations at the AGMs in the same years. A majority of the shares bought back are held to secure delivery of shares in the incentive programmes and the related social security costs. On April 24, 2013 the AGM resolved on transfer of in total no more than 1,219,341 shares already held by Rezidor to participants in the 2013 incentive program (LTIP). Furthermore, the AGM also authorised the Board of Directors to resolve on transfer of no more than 243,868 shares already held by Rezidor on a regulated market to cover social security contributions and other costs related to the 2013 LTIP. p. 16/23

17 Related party transactions Related parties with significant influence are the Carlson Group (Carlson) owning 51.3% of the outstanding shares. Rezidor also has some joint ventures and associated companies. On June 30, 2013 Rezidor had no receivables related to Carlson (none as at December 31, 2012) and ordinary current liabilities of MEUR 1.0 (1.0 as at December 31, 2012). The business relationship with Carlson mainly consisted of operating costs related to the use of the brands and the use of the Carlson reservation system. During Q2 2013, Rezidor had operating costs towards Carlson of MEUR 3.5 (3.1). Carlson also charged MEUR 2.9 (2.7) for points earned in the Loyalty programme Club Carlson and reimbursed MEUR 0.9 (0.7) for points redeemed. Furthermore, Carlson recharged MEUR 1.6 (1.6) of costs incurred from third parties, mainly internet based reservation channels. Moreover, Rezidor paid commissions towards the travel agencies network of Carlson amounting to MEUR 0.2 (0.1). For these specific commissions Rezidor had current liabilities of MEUR 0.1 (0.2 as at December 31, 2012). Information on the long-term equity settled performancebased incentive programmes is included on page 16. Pledged assets and contingent liabilities Asset pledged, MEUR Securities on deposits (restricted accounts) 30-Jun Dec Contingent liabilities, MEUR 30-Jun Dec 2012 Miscellaneous guarantees provided Total guarantees provided p. 17/23

18 RevPAR development by brand (leased & managed hotels) L/L Occupancy L/L Average Room Rates L/L RevPAR Reported RevPAR In EUR Q vs Q vs Q vs Q vs Radisson Blu 72.8% 3.4pts % % % Park Inn by Radisson 68.9% 4.4pts % % % Group 71.7% 3.7pts % % % H vs H vs H vs H vs Radisson Blu 68.1% 3.2pts % % % Park Inn by Radisson 63.1% 5.4pts % % % Group 66.7% 3.8pts % % % RevPAR development by region (leased & managed hotels) L/L Occupancy L/L Average Room Rates L/L RevPAR Reported RevPAR In EUR Q vs Q vs Q vs Q vs Nordics 73.8% 3.0pts % % % Rest of Western Europe 75.6% 3.1pts % % % Eastern Europe 68.7% 3.3pts % % % Middle East, Africa & Others 67.0% 5.9pts % % % Group 71.7% 3.7pts % % % H vs H vs H vs H vs Nordics 68.9% 2.8pts % % % Rest of Western Europe 70.0% 3.1pts % % % Eastern Europe 60.1% 3.3pts % % % Middle East, Africa & Others 68.4% 6.7pts % % % Group 66.7% 3.8pts % % % RevPAR development by region (leased hotels) L/L Occupancy L/L Average Room Rates L/L RevPAR Reported RevPAR In EUR Q vs Q vs Q vs Q vs Nordics 73.0% 2.5pts % % % Rest of Western Europe 74.0% 3.4pts % % % Group 73.6% 3.0pts % % % H vs H vs H vs H vs Nordics 68.8% 2.8pts % % % Rest of Western Europe 69.5% 3.1pts % % % Group 69.2% 3.0pts % % % Revenue per area of operation MEUR Q Q Change % H H Change % Rooms revenue % % F&B revenue % % Other hotel revenue % % Total hotel revenue (leased) % % Fee revenue (manged & franchised) % % Other revenue % % Total revenue % % p. 18/23

19 Total fee revenue MEUR Q Q Change % H H Change % Management Fees % % Incentive Fees % % Franchise Fees % % Other Fees (incl. marketing, reservation fee etc.) % % Total fee revenue % % Revenue per region MEUR Nordics Rest of Western Europe Eastern Europe Middle East, Africa & Other Q Leased Managed Franchised Other Total Total MEUR Nordics Rest of Western Europe Eastern Europe Middle East, Africa & Other H Leased Managed Franchised Other Total Total Central marketing fees and expenses (including leased hotels) MEUR Q Q Change % H H Change % Marketing fee % % Marketing expense % % Net % % Rental expenses MEUR Q Q Change % H H Change % Fixed rent % % Variable rent % % Rent % % Rent as a % of leased hotel revenue 29.2% 29.4% -20bps 30.4% 30.8% -40bps Shortfall guarantees 1) % % Rental expense % % 1) Shortfall guarantees also include provisions for onerous contracts p. 19/23

20 Operating profit before depreciation and amortization and gain on sales of fixed assets (EBITDA) MEUR Nordics Rest of Western Europe Eastern Europe Middle East, Africa & Others Central costs Total Q Leased Managed Franchised Other 1) Central costs Total MEUR Nordics Rest of Western Europe Eastern Europe Middle East, Africa & Others Central costs Total H Leased Managed Franchised Other 1) Central costs Total ) Other also includes share of income from associates and joint ventures. Operating profit (EBIT) MEUR Nordics Rest of Western Europe Eastern Europe Middle East, Africa & Others Central costs Total Q Leased Managed Franchised Other 1) Central costs Total MEUR Nordics Rest of Western Europe Eastern Europe Middle East, Africa & Others Central costs Total H Leased Managed Franchised Other 1) Central costs Total ) Other also includes share of income from associates and joint ventures. Reconciliation of profit/loss for the period MEUR Q Q H H Total operating profit/loss (EBIT) for reportable segments Financial income Financial expense Group s total profit/loss before tax p. 20/23

21 Balance sheet and investments MEUR 30-Jun 2013 Nordics 31-Dec 2012 Rest of Western Europe 30-Jun 31-Dec Eastern Europe 30-Jun 31-Dec Middle East, Africa & Others 30-Jun 31-Dec Jun 2013 Total 31-Dec 2012 Assets Investments (tangible & intangible assets) Quarterly key figures MEUR Q Q Q Q Q RevPAR Revenue EBITDAR EBITDA EBIT Profit/loss after Tax EBITDAR Margin % 39.0% 34.4% 32.5% 34.8% 32.8% EBITDA Margin % 14.0% 9.5% 6.5% 8.6% 4.1% EBIT Margin % 10.5% 4.9% 3.1% 7.0% -0.5% MEUR Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 RevPAR Revenue EBITDAR EBITDA EBIT Profit/loss after Tax EBITDAR Margin % 39.0% 28.3% 32.6% 34.3% 34.4% 28.2% 32.8% 33.9% 32.5% EBITDA Margin % 14.0% -1.4% 6.5% 7.4% 9.5% -2.4% 6.3% 6.7% 6.5% EBIT Margin % 10.5% -4.8% -3.6% 3.6% 4.9% -6.0% -1.8% 2.7% 3.1% p. 21/23

22 Hotel and room openings and signings Openings Signings Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms Q Q H H Q Q H H By region: Nordics Rest of Western Europe Eastern Europe ,301 Middle East, Africa & Others ,141 Total , , ,872 By brand: Radisson Blu , ,198 Park Inn by Radisson , ,674 Hotel Missoni & Others Total , , ,872 By contract type: Leased Managed , ,442 Franchised Total , , ,872 In Q2 2013, 4 hotels and 383 rooms left the system, resulting in a net opening of 388 rooms. Hotels and rooms in operation and under development (in pipeline) In operation Under development Hotels Rooms Hotels Rooms 30-Jun, By region: Nordics ,524 14, ,363 Rest of Western Europe ,898 30, ,730 3,265 Eastern Europe ,501 16, ,424 8,132 Middle East, Africa & Others ,700 11, ,657 9,160 Total ,623 72, ,589 21,920 By brand: Radisson Blu ,703 50, ,762 11,373 Park Inn by Radisson ,128 20, ,079 9,679 Hotel Missoni & Others Total ,623 72, ,589 21,920 By contract type: Leased ,695 17, Managed ,314 38, ,839 20,057 Franchised ,614 16, ,720 1,792 Total ,623 72, ,589 21,920 p. 22/23