Operational and Financial Results:

Transcription

1 Operational and Financial Results: S e c o n d Q u a r t e r

2 Grupo Posadas, S.A.B. de C.V. & Subsidiaries Mexico City, July 27, 2012 Information presented with respect to the same quarter of last year under IFRS accounting standards: 2 Total revenues and EBITDA grew 16% and 6%, respectively Systemwide average RevPAR increased 8% in pesos Pipeline considers 25% more hotels and 19% more rooms throughout Mexico by December 2014 Agreement for the sale of the hotel business in South America We had a good second quarter. We experienced an important increase in the growth rate of the consolidated revenues and EBITDA was mainly driven by a very good performance of our hotels systemwide and in particularly our coastal hotels, said José Carlos Azcárraga, Posadas CEO. > Financial Highlights Million pesos as of Var. Accum. Var. June 30, Q12 % YoY % 2012 % YoY % Total revenues 2, , EBIT EBITDA Majority Net Result (5.6) (3) na On a comparable basis, EBITDA grew 5.5% during the 2Q12. Within this result, it is important to note that Owned & Leased hotels contributed with a significant 24.9% increase. Systemwide hotel performance continued improving during the second quarter of Our Revenue Per Available Room (RevPAR) increased 4.7and occupancy also increased by 1.8 percent points ( pp ), which resulted in a RevPAR growth of 7.8%. The operating margin for coastal hotels improved by 12.5pp versus the same quarter of These operational results are also due to the additional number of international tourists that are returning to our coastal hotels. Total debt in pesos declined $20.9 million when compared to the figure reported at the end of 1Q12. As of June 30, 2012, available cash was $473.4 million (US$35.4 million). Urban hotels which represent 84% of the total operated rooms, continue to perform better with an increase in RevPAR of 5.9. The operating margin improved by 1.1pp versus the same quarter of For a better understanding of the changes under IFRS, we have included the income statements and balance sheet for the 2Q11 under NIF (Mexican Financial Reporting Standards) and IFRS (Annex 1). On the other hand, our coastal hotels had an even better performance with a RevPAR increase of 19.7%. For more information please contact: Gerardo de Prevoisin Tel.: (5255) gerardo.deprevoisin@posadas.com

3 > Development Our pipeline is comprised of executed agreements to operate 46 new hotels with 6,280 rooms that represent an increase in capacity of approximately 31% in the number of rooms. South America is expected to account for 46% of the new openings. Of the 6,280 rooms, 81% are under the economy and business formats. These hotels represent a total investment of US$465 million of which less than 1% will be contributed by Posadas. We expect all of these to be operating before December 2014 according to commitments made with the different property owners. Brands Mexico South America Total % Hotels Rooms Hotels Rooms Hotels Rooms Fiesta Americana 3 Arrendados Posadas 7 Fiesta Inn Administrados Terceros Caesar Park Caesar Business Propios 8 1, , One hotels 16 1, , , Aqua TOTAL 26 3, , , Room distribution by contract Total Investment US $464 M 0.5% 98% 2% Leased Managed Own Third parties 99.5% Openings LTM No. of rooms Type FA Hacienda San Antonio El Puente 71 Managed One Guadalajara Periferico Norte 126 Managed FI San Cristobal de las Casas 80 Managed Caesar Business Puerto Montt 142 Managed One Culiacan Forum 126 Managed One Ciudad del Carmen 126 Managed FI Cancún las Américas 152 Leased Fi Puebla las Animas 140 Leased One Guadalajara Centro Historico 146 Managed Total 1,109

4 > Owned and Leased Hotels Total Urban Coastal % Var. % Var. % Var. 4 2Q12 (QQ) Average No. of Rooms 9, , , Average Daily Rate 1, , , Occupancy (Var. in pp) 64% % % 5.8 RevPAR Accum. Average No. of Rooms 9, , ,201 (4.9) Average Daily Rate 1, , , Occupancy (Var. in pp) 65% % % 3.2 Rev PAR During the quarter, revenues from this segment represented 49% of consolidated revenues. Against last year s same quarter, this segment had an 8.5% increase in revenues and a 24.9% increase in EBITDA that represents an improvement of 1.7 pp in margin which is attributable to a higher ADR of 7.1% and an increase of 1.3 pp in occupancy, resulting in a RevPAR increase of 9.3%. This growth rate is similar to the cumulative one for The average number of rooms available was higher by 2.9%. Results for urban hotels showed a significant improvement when compared with 2Q11; on average with 2.4% more rooms operated, a 6.3% increase in ADR and an increase in occupancy of 0.6pp, RevPAR improved by 7.3%. The average number of rooms available for coastal hotels was higher by 5.9% due to the opening of a Fiesta Inn hotel in Cancun. This segment showed an increase in ADR of 13.6% and in occupancy of 5.8pp. All of the above resulted in a RevPAR increase of 25.2% when compared with the same period of last year. This was in part due to the good performance of our hotels during the Holy Week vacation. The growth rate for this quarter is much higher than the performance reported in the previous five quarters and we attribute this very positive result to the acceptance and consolidation of the all inclusive format that has been in practice for three hotels ( Aqua Cancun, FA Condesa Cancun and FA Cozumel Reef) since November of 2010.

5 > Management Total Urban Coastal % Var. % Var. % Var. 2Q12 (QQ) Average No. of Rooms 19, , , Available Daily Rate 1, , , Occupancy (Var. in pp) 63% % % 5.1 RevPAR Accum. Average No. of Rooms 19, , , Available Daily Rate 1, , , Occupancy (Var. in pp) 62% % % 3.1 RevPAR Includes owned, leased and managed hotels Revenue for the Management business represented 30% of total revenue in the quarter, growing 39.1% over 2Q11 due in part to the strong performance of our hotels which continues improving. The average number of rooms operated recorded a 3.7% increase in the quarter, while Systemwide hotels reported a 4.7 % improvement in ADR, a 1.8pp increase in occupancy, and a RevPAR growth of 7.8%. 5 Systemwide urban hotels, had an increase in the average number of operated rooms of 3.0% with an improvement in ADR of 3.7%, along with a 1.3pp increase in occupancy to achieve a higher RevPAR by 5.9%. Coastal hotels showed an increase of 8.5% in the average number of available rooms, including the recent opening of a FI hotel in Cancun. In addition, ADR, occupancy and RevPar increased 9.6%, 5.1pp and 19.7%, respectively. During 2Q12, the Company has opened two new hotels and nine in the last twelve months, almost twice the number of hotels opened as of 2Q11 LTM. These nine hotels represent 1,109 additional rooms but only 13% of these belong to South America: Fiesta Americana Hacienda San Antonio El Puente, One Guadalajara Periferico Norte, Fiesta Inn San Cristobal de las Casas, Caesar Business Puerto Montt (in Chile), One Culiacan Forum, One Ciudad del Carmen, Fiesta Inn Cancun las Americas, FI Puebla las Animas and One Guadalajara Centro Historico.

6 > Vacational Club & Other The Vacation Club and Other business segment mainly include the Fiesta Americana Vacation Club (FAVC), which represented 92% of this segment revenues. Total revenues for the quarter amounted to 21% of consolidated ones, an increase of 9.8% compared to the same quarter of the previous year. During the second quarter of 2012, we observed a better performance in this business segment, mainly in the sale of memberships with the same period of Nevertheless, contribution decreased 15%, equivalent to $20.8 million. > EBITDA In 2Q12 an EBITDA of $296.9 million was recorded, equal to 14.2% of total revenues and representing a 5.5% increase when compared to 2Q11. The gap between revenues and EBITDA is due in part to the Vacation Club business and to Corporate expenses. For the last twelve months, EBITDA was $855.8 million, US$65.8 million at an average exchange rate of $13.00 MXN per USD, 3.4% higher than the $827.6 million of 2Q11 (LTM). 6 > Capital Expenditure Capital expenditures during the quarter were $14.9 million, 85% were used for maintenance of hotels and the remaining for corporate purposes.

7 > Comprehensive Financial Cost Concept 2Q12 2Q Interest income (3,006) (4,060) (5,633) (6,687) Accrued interest 124, , , ,761 Currency (profit) fluctuations 111,123 (28,763) (99,158) (97,236) Other financial costs (products) (12,838) (28,099) (167,881) (115,996) Other financial expenses 16,639 12,303 27,621 25,123 Total CFC 236,099 90,855 18,031 68,964 Figures in thousands of pesos At the end of the second quarter, on a comparable basis under NIF, net interest coverage was 2.1 times, 0.3 times lower than the observed figure for 2Q11. Under IFRS, net interest coverage was 1.6 times, 0.2 times lower than the observed figure of 2Q11. The foreign exchange unrealized loss was due to the 4.5% depreciation of the MXN against the USD from 1Q12 to 2Q12. 7 As of June 30, 2012, the derivatives notional amount (Cross currency swap) of US$30.8 million held collateral posted in cash of US$1.6 million. June 30, 2012 Indebtedness SWAPS Cross Currency Notional in: Date in: Date Concept: MXN 000 USD 000 Certificados Bursatiles (Posadas 08) 317,148 4Apr13 30,773 4Apr13 TOTAL 317,148 30,773 > Majority Net Result As a result of the foregoing, net loss for the quarter was $56.6 million and the net profit for 1H12 was $210.3 million.

8 > Financial Position During the second quarter, US$3.0 million of our Vacation Club business receivables were discounted under one of our existing credit facilities. As of June 30, 2012 our cash balance was $473.4 million. The main uses of cash during the quarter were, among other items: debt amortizations of $138 million and interests paid of $63 million. 8 Net debt at the end of 2Q12 was US$365 million under NIF and $421 million under IFRS. Net Debt to EBITDA ratio was 4.9 times which is 0.3 times higher than that observed figure of last year s same quarter under NIF and 6.6 times under IFRS, 0.9 times lower than the figure observed in 2Q11. Net Debt mix at the closing of the second quarter was as follows: 44% shortterm, 60% in U.S. dollars and 50% fixed rate. The average debt maturity was 2.0 years and 19% was secured and issued at a subsidiary level without recourse to the Holding company. As of the release date of this report, the existing ratings for the 9.25% Senior Notes 2015 and the Certificados Bursátiles issuance (POSADAS08) were: Fitch: global Issuer Default Rating (IDR) B and local (Caval) B+, both with negative outlook. Moody s global scale B3 and a negative outlook. S&P global CCC+ and local (Caval) mxb+, both with negative outlook under Credit Watch with positive implications. In compliance with article Frac. VIII of the Mexican Stock Exchange rules, Posadas informs that JP Morgan covers Grupo Posadas. > Subsequent Event Agreement for the sale of the hotel business in South America: Posadas agrees to sell its hotel business in South America to ACCOR SA for US$275 million. The transaction includes the real estate assets, management contracts, and the Caesar Park and Caesar Business brands. Proceeds will be used to repay existing indebtedness and improve the company s capital position. The transaction will allow Posadas to focus on its core business in Mexico and strengthen its position in the Mexican hotel industry. Mexico City, July 16, 2012, Grupo Posadas, S.A.B. de C.V. (BMV: POSADASA) informed that has reached an agreement with ACCOR SA, one of the world s leading hotel management companies, to sell its operations in South America for a total enterprise value of US$275mm. Accor will acquire all of Posadas assets in the region which include 15 owned, leased and managed hotels (four of which are owned), marks Caesar Park and Caesar Business and an undisclosed number of pipeline hotels in Brazil, Argentina and Chile.

9 Posadas will use the proceeds to repay indebtedness and improve the company s capital position. The transaction will allow Posadas to focus on its core business in Mexico and strengthen its position in the Mexican hotel industry. On July 17, 2012, the Company drew down $160 million from a short term secured credit line. These resources will be used for working capital purposes. 9 José Carlos Azcárraga, Posadas CEO mentioned: This is a very exciting transaction as it allows Posadas to realize an attractive valuation on our South American business while ensuring continuity of our hotels in the capable hands of Accor. We continue to focus on our leadership in Mexico where we operate 102 hotels with over 17,600 rooms in 50 urban and resort destinations. Rubén Camiro, CFO of Posadas said: With this transaction we continue to progress in the execution of strategic alternatives aimed at strengthening our capital structure initiated last year. Net proceeds will be used to significantly improve our financial profile and propel growth. The purchase and sale agreement provides for customary purchase price adjustments, including adjustments related to performance and other metrics under certain contracts. At closing, approximately 10% of the proceeds of the transaction will be placed into escrow to secure certain adjustments to the purchase price and other indemnification obligations of Posadas under the purchase and sale agreement. The transaction is subject to customary closing conditions and is expected to be completed in the fourth quarter of At the end of the second quarter of 2012, Posadas operated 3 Caesar Park hotels and 8 Caesar Business hotels in Brazil, 2 Caesar Park hotels in Argentina, and 2 Caesar Business hotels in Chile.

10 > Grupo Posadas as of June 30, 2012 Grupo Posadas is the largest LatinAmerican hotel operator. Posadas operates 117 hotels and 20,272 rooms in the most important and visited urban and coastal destinations in Mexico (86% of total rooms), Brazil(11%), the United States(1%), Argentina(1%) and Chile(1%). Approximately 84% of rooms are in urban destinations and 16% in coastal. Grupo Posadas operates under the following top of mind brands: Live Aqua, Fiesta Americana Grand, Fiesta Americana, Fiesta Americana Vacation Villas, Fiesta Inn, One Hotels in Mexico and Caesar Park, Caesar Business in Brazil, Argentina and Chile. Distribu by Rooms 48% 35% 17% Leased Managed Owned 3,476 Rooms 9,813 Rooms 6,989 Rooms 10 Brands Mexico Brazil USA Argentina Chile Total Hotels Rooms Hotels Roomss Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms Live Aqua Fiesta Americana 17 4, ,824 Fiesta Inn 61 8, ,871 Caesar Park Caesar Business 8 1, ,903 FA Vacation Villas One Hotels 17 2, ,159 Other Total , , ,272 % 86% 11% 1% 1% 1% 100%

11 > Income Statement IFRS (million pesos) 2Q12 2Q11 Var% Var% $ % $ % $ % $ % Total Revenues 2, , , , Owned and Leased Hotels Revenues 1, , , Direct Cost , , Contribution Management Revenues , Direct Cost Contribution FA Vacation y Other Revenues Direct Cost Contribution (15.0) (15.8) Corporate expenses Depreciation / amortization (15.0) Other expenses (revenues) (45.3) (27.8) EBIT EBITDA Comprehensive Fin. Cost (73.9) Result before taxes and other (65.1) (3.1) na Associated companies (21.2) (20.7) Result before taxes (64.4) (3.1) na Income taxes (106.0) (5.1) na (102.9) (2.5) na Deferred taxes Other na Consolidated net result (35.8) (1.7) na Minority interes , Net Majority Result (56.6) (2.7) na Grupo Posadas shares are quoted and traded on the Mexican Stock Exchange since 1992 under the ticker names POSADASA and POSADASL; in addition, Series A and L are quoted and traded in the U.S. PORTAL System under the ticker names GRPALP and GRPYP, respectively. posadas.com

12 > Consolidated Balance Sheet as of June 30, 2012 & 2011 IFRS (million pesos) Concept June 12 % June 11 % Var. (%) 12 ASSETS Current Cash & short term investments Notes & accounts receivable Inventories Other assets Total current assets Long Term Accounts and notes receivable Investments in shares of nonconsolidated subsidiaries and associates Property, plant and equipment, net Intangible and deferred assets Other longterm assets Total Assets , , , , , , , , , , , , (14.3) (6.7) (13.9) (0.7) 13.0 (0.5) LIABILITIES Current Suppliers Bank loans Stock market loans Other current liabilities Total current liabilities ,25 1, , , , (16.7) (51.2) Long Term Bank loans Stock market loans Other loans Other longterm liabilities Deferred liabilities and Other Total Liabilities , , , , , , , (41.6) (41.8) (17.2) (8.0) STOCKHOLDERS EQUITY Majority interest Minority interest Total 5, , , , Total Liabilities & Stockholders Equity 16, ,

13 > Consolidated Statement of Cash Flows IFRS (million pesos from January 1st to June 30 of 2012 & 2011) Profit (loss) before income tax () Items not requiring cash (36.7) () Other unrealized items + () Items related to investing activities Depreciation and amotisation for the period () Gain or loss on sale of property, plant and equipment () Equity in results of associates and joint ventures (1.1) (1.3) () Interests received (5.6) (8.7) + () Items related to financing activities Accrued interest Exchange fluctuations (99.2) (97.2) + Derivative transactions (490.1) (165.3) Cash flow before income tax Cash flow from (used in) operating activities (263.2) (382.1) + () Decrease (increase) in trade accounts receivables (202.8) (210.5) + () Decrease (increase) in inventories () Decrease (increase) in other accounts receivables (54.4) (26.2) + () Decrease (increase) in other accounts payable (129.6) (163.2) + () Decrease (increase) in other liabilities () Income tax payed or returned (36.6) (35.1) Net cash flows from (used in) operating activities (39.1) Net cash flows from (used in) investing activities () Permanent investments () Investment in property, planta and equipment (25.3) (69.5) + Dividends received + Interest received () Other inflows (outflows) of cash Net cash flow from (used in) financing activities (24.1) (393.4) + Bank financing Stock market financing + Other financing, includes margin calls () Bank financing amortisation (1,277.6) (769.8) () Stock market financing amortisation () Dividends paid + Premium in issuance of shares (1) + Contribution for future capital increases () Interest expense (272.7) (240.6) () Repurchase of shares + () Other inflows (otflows) of cash (43.6) (4.2) Net increase (decrease) in cash and cash equivalents 50.9 (25.5) Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period

14 Annex 1 > Income Statement from April 1st to June 30, 2011 (million pesos) 14 Concepto 2Q11 NIF % 2Q11 IFRS % Total Revenues Owned & Leased Hotels Revenues Direct cost Contribution Management Revenues Direct cost Contribution FA Vacation Revenues Direct cost Contribution 1, , Corporate expenses Depreciation / amortization Goodwill amortization, net Operating Profit EBITDA Comprehensive financing cost Other expenses (revenue) Profit Before Taxes & Assoc. Companies Other Part. in results of Associated Companies Profit Before Taxes Income taxes Deferred taxes Net Income before Minority Minority Interest Net Majority Income

15 Annex 1 cont d > Balance General Consolidated Balance Sheet as of June 30, 2011 (million pesos) 15 Concept June 11 NIF Ajustments June 11 IFRS ASSETS Current Cash & short term investments Notes & accounts receivable Inventories Other assets Total current assets Long Term Accounts and notes receivable Investments in shares of nonconsolidated subsidiaries and associates Property, plant and equipment, net Intangible and deferred assets Other longterm assets Total Assets , , , , , , , , , , , , ,444.3 LIABILITIES Current Suppliers Bank loans Stock market loans Other current liabilities Total current liabilities , , (5.4) , ,284.8 Long Term Bank loans Stock market loans Other loans Other longterm liabilities and deferred liabilities and Other Total Liabilities , , , , , , , ,481.5 STOCKHOLDERS EQUITY Majority interest Minority interest Total 3, , , , ,962.8 Total Liabilities & Stockholders Equity 13, , ,444.3