2017 Interim Results ISE: DHG LSE: DAL Disclaimer The - - PowerPoint PPT Presentation

2017 Interim Results

ISE: DHG LSE: DAL

Disclaimer

The presentation contains forward looking statements. These statements have been made by the Directors in good faith based on the information available to them up to the time of their approval of this presentation. Due to inherent uncertainties, including both economic and business risk factors underlying such forward looking information, actual results may differ materially from those expressed or implied by these forward looking statements. The Directors undertake no obligation to update any forward looking statements contained in this presentation, whether as a result of new information, future events or otherwise.

2017 H1 Results Page 2

H1 2017 | Contents

Key Value Drivers H1 2017 Financial Performance Business Review Driving Portfolio Growth Outlook Appendices

2017 H1 Results Page 3

H1 2017 | Key Value Drivers

Dublin and Regional Ireland markets continue to show strong RevPAR growth. UK markets enjoying strong RevPAR growth in 2017 Leveraging scale and decentralised operating model across Ireland and into the UK

• Outperformed market RevPAR growth in all cities with exception of Cork
• Converted additional revenue strongly to the bottom line – Segments EBITDAR margin up from 38.7%

to 41.0% Pipeline of additional 1,280 rooms on track to open in 2018 – on time and within budget. Significant earnings boost for 2019 and 2020 Continuing to deliver on growth strategy

• 3 hotels bought in Ireland at combined initial yield of 7.7%, hotel sold in UK at initial yield of 4.85%
• Exciting pipeline of acquisitions, refurbishments and development opportunities
• Announcing today a new Clayton hotel in Manchester to open in 2020
• Controlled and disciplined growth strategy with low gearing levels

Modern well invested, well located properties delivering strong free cashflows

2017 H1 Results Page 4

H1 2017 Financial Performance

ISE: DHG LSE: DAL

Dalata | Driving Sustained Strong Performance in H1 2017

60 70 80 90 100 2016 2017

RevPAR Adj djusted EB EBITDA1 Adj djusted Dil Diluted EP EPS2

€m € 10 20 30 40 50 60 2016 2017 0.00 0.05 0.10 0.15 0.20 2016 2017

+10% +27% +41%

Revenue

€m 100 120 140 160 180 200 2016 2017

+24%

2017 H1 Results Page 6

1. Excludes the effects of depreciation, revaluation movements and items considered by management to be non-recurring or unusual in nature. Acquisition costs have been excluded given the scale of acquisitions in 2016 2. Excludes the tax adjusted effects of revaluation movements and items considered by management to be non-recurring or unusual in nature. Acquisition costs have been excluded given the scale of acquisitions in 2016

€

Dalata | 3 Core Business Segments

Dublin 14 Hotels 3,699 Rooms H1 2017 RevPAR: €96.36(+8%)

57%

Group Revenue 60% Segment EBITDA 48% EBITDAR Margin

Regional Ireland 12 Hotels 1,643 Rooms H1 2017 RevPAR: €60.93(+9%)

21%

Group Revenue 15% Segment EBITDA 24% EBITDAR Margin

UK * 7 Hotels 1,557 Rooms H1 2017 RevPAR: £63.72(+15%)

21%

Group Revenue 23% Segment EBITDA 38% EBITDAR Margin

2017 H1 Results Page 7 * Excludes Croydon Park Hotel Information as at period end

Dalata | Doing what we promise

8.3% increase in ARR drives 9.8% RevPAR growth Strong conversion

• f

incremental sales leads to segments EBITDAR margin increasing from 38.7% to 41.0% Rent up due to Clayton Hotel Burlington Road, full period impact of the Gibson Hotel and performance rents, partially offset by ownership of Clayton Hotel Cardiff for most of period and purchase of Maldron Hotel Cork freehold in September 2016 Continued investment in central team and systems reflected in central overheads See note on depreciation in appendices (page 32) Net finance costs are net

• f

€663k

• f

interest capitalised to property, plant and equipment

KPIs 6 Months Ending 30/6/2017 6 Months Ending 30/6/2016 Occupancy 80.2% 79.0% Average Room Rate (€) 102.63 94.78 RevPAR (€) 82.27 74.90

Key Financials €’000

6 Months Ending 30th June 2017 6 Months Ending 30th June 2016

Revenue 161,801 130,050 Segments EBITDAR 66,310 50,350 Rent (16,342) (11,704) Segments EBITDA 49,968 38,646 Central overheads (5,561) (3,835) Other income / costs 1,113 (3,819) EBITDA 45,520 30,992 Depreciation (7,631) (7,165) Net finance costs (5,182) (5,661) Profit before tax 32,707 18,166 Profit after tax 28,347 15,525 EPS (€) 0.15 0.08 Adjusted EBITDA 44,891 35,348 Adjusted diluted EPS (€) 0.15 0.11

2017 H1 Results Page 8

Dalata | Adjusted EBITDA Bridge

35.3 4.5 1.4 2.3 4.2 1.0 1.7 0.1 44.9 10 20 30 40 50 60

€m

2017 H1 Results Page 9

EBITDAR margin increases from 38.7% to 41.0% due to strong conversion of additional revenue to EBITDAR

Dalata | Continuing to Outperform Market RevPAR growth

2017 H1 Results Page 10

11.2% 8.8% 17.0% 8.2% 22.6% 6.5% 10.3% 13.6% 19.1% 7.2% 8.6% 13.1% 11.5% 22.9%

• 1.1%

1.8% 10.9% 9.7%

Dublin Galway Limerick Cork Belfast Leeds Manchester Cardiff London

Dalata Market

Very strong performance versus market in Dublin, London and Regional UK cities Behind market in Cork due to of impact of refurbishment works in Q1 and rebranding at Clayton Hotel Cork City Very strong six months in London driven by exceptional performance at Clayton Hotel Chiswick

Source: Market data – STR; Trending.ie

• 1. Clayton Hotel Burlington Road is excluded from the ‘like for like’ analysis because its performance in the transitional period since its November 2016 acquisition has a disproportionate impact as a

result of its size

(excl Clayton Hotel Burlington Road1)

Dublin | Half Year Performance

Dublin market continues to perform strongly (+7.2%) due to the combination of strong demand and limited new supply. STR now forecasting 7% increase in RevPAR for 2017 Dalata outperformed market with RevPAR up 11.2% excluding Clayton Hotel Burlington Road1 Food and beverage revenue up 3.1% for the year on a ‘like for like’ basis. Clayton Hotel Burlington Road added €4.9m to food and beverage revenue Rent up as a result of addition of Clayton Hotel Burlington Road, full year impact of Gibson Hotel and increased performance rents at Ballsbridge Hotel and Maldron Hotel Dublin Airport EBITDAR margin up to 47.7% due to 74% conversion

• f additional sales to EBITDAR on a ‘like for like’ basis

KPIs Inc Burlington Rd

6 Months Ending 30/6/2017 6 Months Ending 30/6/2016

Occupancy 83.1% 82.4% Average Room Rate (€) 116.02 108.38 RevPAR (€) 96.36 89.30

All figures €’000

6 Months Ending 30/6/2017 6 Months Ending 30/6/2016

Revenue Rooms 64,529 48,229 Food and beverage 22,012 15,704 Other 6,172 4,371 Total revenue 92,713 68,304 EBITDAR 44,256 31,519 Rent (14,212) (8,590) EBITDA 30,044 22,929 EBITDAR % 47.7% 46.1%

KPIs include full six month performance of other Dublin acquisitions regardless of when acquired

2017 H1 Results Page 11

KPIs Exc Burlington Rd

6 Months Ending 30/6/2017 6 Months Ending 30/6/2016

Occupancy 84.4% 82.8% Average Room Rate (€) 112.52 103.07 RevPAR (€) 94.91 85.34

• 1. Clayton Hotel Burlington Road is excluded from the ‘like for like’ analysis because its performance in the

transitional period since its November 2016 acquisition has a disproportionate impact as a result of its size

Regional Ireland | Half Year Performance

Cork, Limerick and Galway markets continue to perform well on the back of strong demand from domestic consumers and FDI companies. Outlook remains positive through combination of limited supply pipeline and strong demand RevPAR increased by 9.2%. Number

• f

hotels benefitting from impact of refurbishment in previous years such as Clayton Hotel Silver Springs, Maldron Hotel Cork and Clayton Hotel Limerick Significant increase in EBITDAR margin to 23.6% due to 86.3% conversion of incremental revenue on ‘like for like’ basis KPIs

6 Months Ending 30th June 2017 6 Months Ending 30th June 2016

Occupancy 71.5% 69.3% Average Room Rate (€) 85.17 80.46 RevPAR (€) 60.93 55.79

All figures €’000

6 Months Ending 30th June 2017 6 Months Ending 30th June 2016

Revenue Rooms 18,094 14,548 Food and beverage 11,987 10,940 Other 3,971 3,251 Total revenue 34,052 28,739 EBITDAR 8,048 6,209 Rent (672) (1,119) EBITDA 7,376 5,090 EBITDAR % 23.6% 21.6%

KPIs include full six month performance of all Regional Ireland hotels regardless of when acquired

2017 H1 Results Page 12

UK | Half Year Performance

Other than Leeds, all other markets in the UK have performed strongly during the period RevPAR for the region up 14.6% Clayton Hotel Chiswick had exceptional period with RevPAR up 20.5% as benefits of redevelopment project are delivered Food and beverage sales increased by 10.2% (excluding Croydon Park Hotel) driven by exceptional performance of Clayton Hotel Chiswick (+52.6%) Significant increase in EBITDAR margin from 35.6% to 38.0% KPIs

6 Months Ending 30th June 2017 6 Months Ending 30th June 2016

Occupancy 82.0% 77.2% Average Room Rate (£) 77.71 72.03 RevPAR (£) 63.72 55.60

All figures £’000

6 Months Ending 30th June 2017 6 Months Ending 30th June 2016

Revenue Rooms 19,987 16,952 Food and beverage 6,810 5,995 Other 2,389 1,782 Total revenue 29,186 24,729 EBITDAR 11,103 8,811 Rent (1,255) (1,554) EBITDA 9,848 7,257 EBITDAR % 38.0% 35.6%

KPIs include full six month performance of all UK hotels regardless of when acquired (except Croydon Park Hotel which was sold on 30 June 2017 and is excluded from the KPIs) 2017 H1 Results Page 13

Dalata | Strong Balance Sheet providing covenant for growth

Objective is to maintain a strong balance sheet with appropriate level of gearing, leading to a strong covenant for potential landlords/investors Decrease in Net Debt to Amended EBITDA to 1.91 91x from 2.40x Tangible assets broadly in line with year-end as impact of acquisitions, development costs and revaluation is counterbalanced by depreciation, impact of fall in value of Sterling and disposal of Clayton Hotel Cardiff £174.4m (€198.3m) of borrowings in Sterling as a natural hedge against value of Sterling assets and Sterling denominated earnings Undrawn facilities of €52.2m at period end. RCF facilities inceased post period end by €50m bringing undrawn facilities to €102.2m Combination of strong cashflow, cash balance, undrawn facilities and low gearing provides a Balance Sheet to comfortably fund current expansion plans

All figures €m 30 June 2017 31 Dec 2016

Non-current assets Tangible assets 829.5 825.7 Goodwill and intangibles 54.7 54.3 Other 11.7 6.6 Current assets Trade receivables, inventory and other 25.9 17.7 Cash 88.9 81.1 Total assets 1,010.7 985.4 Equity 652.8 620.4 Bank loans 267.5 280.4 Trade and other payables 58.6 53.1 Other non current liabilities 31.8 31.5 Total equity and liabilities 1,010.7 985.4

2017 H1 Results Page 14

Dalata | Strong Cashflow to Fund Pipeline and Further Growth

Illustration

• f

what the business can generate in cash to fund debt repayment, acquisitions, development activity etc Maintenance capex averages 4% of turnover Development capital expenditure is excluded as it either relates to new build hotels, extensions, redevelopment

• r

items identified on acquisition required to bring hotels to brand standard Cash conversion is higher in 2016 due to impact of Clayton Hotel Burlington Road rental prepayment in addition to higher 2017 tax payments. Excluding the impact of the once off Clayton Hotel Burlington Road rental prepayment conversion would have been 64%

All figures €m

6 Months Ending 30th June 2017 6 Months Ending 30th June 2016 Adjusted EBITDA 44.9 35.3 Net cash from operating activities 37.5 30.2 Adjusting cash items 1 0.1 3.4 Interest on bank loans (excluding fees) (4.5) (4.4) Maintenance Capital Expenditure (6.5) (5.2) Cash generated to fund debt repayment, acquisitions and development activity 26.6 24.0 Cash conversion 59% 68%

2017 H1 Results Page 15

1 Stock exchange listing costs of €1.4m in H1 2016, acquisition costs of €0.1m (H1

2016: €2m)

Business Review

ISE: DHG LSE: DAL

Dalata | Building a Leading Hotel Owner/ Operator

2017 H1 Results Page 17

Leading hotel owner and operator in Ireland and UK with 35 leased/owned hotels as at 5 September 2017 26 owned, 9 leased and 3 managed hotels under two core brands Proven, experienced management team with a strong decentralised structure New platform with best-in-class operating systems and processes Strong balance sheet covenant established for next phase of growth

Nu Number Owned an and Lea eased Rooms an and Ho Hotels

12 12 15 15 27 27 34 34 35 35

5 10 15 20 25 30 35 40

1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 2013 2014 2015 2016 2017

Room numbers Number of hotels

Dalata | “The Difference with Dalata”

Our dec decentral alised ope

• perational app

approach Dalata’s dec decentral alised st structure is core to our management philosophy Hotel General Managers are critical players – we continually develop them A strong multi-functional team at the centre setting direction, seeking growth opportunities, supporting the hotels, and reporting to our stakeholders We We grow our own – training and development a major focus as there is a need to have a strong pipeline

• f key people coming through

Having people we know taking up key roles de-risks our business We We focus on

• n what

at we we ar are go good at at Operating 3 star and 4 star modern well-maintained hotels in cities with strong mix of corporate and leisure demand Executing transactions to grow our owned and leased portfolio Identifying strong locations and developing new hotels on them Decentralised revenue management – our revenue managers are informed by systems but always make the dec decisions themselves Investing in systems to support our app approach to to cos

• st control

Owner/Operator Mod

• del

Control of our brand standards Security of tenure allows us to build a central team to effectively support and scale our decentralised structure

2017 H1 Results Page 18

Dalata | Refurbishment Programme

Over €7.5 million invested in refurbishment of 752 rooms in H1 2017. Over €22.3 million on refurbishment of 2,133 rooms since 2015 Forecast €1.8 million of expenditure expected in H2 2017 on refurbishment of 160 rooms Standardised room templates for Clayton and Maldron brands driving investment efficiencies Improved product contributing to higher ARR in hotels such as Clayton Hotel Chiswick, Clayton Hotel Leeds, Maldron Hotel Cork, Clayton Hotel Silver Springs and Clayton Hotel Leopardstown

Room

• ms Refurbis

ished 201 2015 201 2016 201 2017 Tota tal 373 373 138 138 210 210 721 721 260 260 610 610 702 702 1, 1,572 2, 2,293 2017 H1 Results Page 19

Dalata | Investing in Technology

Bac ackground Dalata comprises primarily a portfolio of hotels acquired in multiple separate transactions since mid 2014 There were multiple different systems platforms at the various hotels Alkimii payroll management system rolled out across the group in 2016 Project Evolve - 20 2017/2018 Objectives of project are to (i) streamline and consolidate processes, (ii) increase controls, (iii) deliver efficiencies and (iv) improve the timeliness of management reporting There are three key components: A single accounting platform Sage 200 was introduced across all units in July 2017 Procure Wizard, a new procurement system will be implemented over next six months Shared Service Centre has been established in Cork to manage routine administration work in a highly efficient manner supported by the new technology Property Man anagement Systems an and Revenue Man anagement Roll out of Opera Cloud PMS to non Opera PMS Hotels by end of Q1 2018, Opera Cloud to replace Opera at

• ther Hotels within the next 3 years

Web based group database housed in Oracle’s data centre Real time rates and inventory integration to all main distribution channels Implementation of IDEAS Revenue Management System to aid the Revenue manager in decision making by providing powerful analytics in selected hotels

2017 H1 Results Page 20

Dalata | Connecting with our customers

Extensive research completed on brand websites Key items raised: difficult customer journey when booking, perception of better value being available

• n OTA sites and brand positioning/imagery

To address the weaknesses identified: All hotels will move onto the one booking platform with a redesign of the customer booking journey Book direct initiative ‘Click on Clayton’ to be introduced this month and Maldron to follow in early 2018 Triptease Price Widget showing rates online of OTA’s Review of Brand positioning, new creative platform for advertising campaigns

2017 H1 Results Page 21

Driving Portfolio Growth

Ir Irel eland: Portfolio lio Obje bjectives Complete existing development pipeline of

• f 779 rooms and deliver on earnings potential when they
• pen in 2018

Reach the optimum market share in each of the key urban centres – Dublin, Cork, Limerick and Galway UK UK: Portfolio Obje jectives Complete existing development pipeline of

• f 502 rooms and deliver on earnings potential when they
• pen in 2018

Grow our presence in the UK through leases and ownership

• Number of major regional cities that meet our criteria for operating a successful hotel
• Potential for a number of hotels in each city
• Continue to exploit the value of balance sheet covenant to secure very competitive rental levels

Assess opportunities to increase numbers of rooms or facilities at existing hotels

Drive Portfolio Growth | Ireland and UK

2017 H1 Results Page 23

Dalata | Over 1,580 new rooms across Ireland and UK

Dublin 2 New Hotels 3 Extensions 551 rooms Reg egional al Ir Irel eland 1 New Hotel 1 Extension 228 Rooms UK UK 1 New Owned Hotel 2 New Leased Hotels 802 Rooms

Propert rty Ne New Extensio ion Roo

• oms

Plannin ing Con

• nstructio

ion Com

• mpletion
• n

Granted Started Clayton Hotel Charlemont x 188 x x Q3 2018 Maldron Hotel Kevin Street x 138 x x Mid 2018 Clayton Hotel Ballsbridge x 31 x Q3 2018 Clayton Hotel Dublin Airport x 141 x x Q2 2018 Maldron Hotel Parnell Square x 53 x Q4 2018 Propert rty Ne New Extensio ion Roo

• oms

Plannin ing Con

• nstructio

ion Com

• mpletion
• n

Granted Started Maldron Hotel South Mall, Cork x 165 x Q4 2018 Maldron Hotel Sandyroad, Galway x 63 x Mid 2018 Propert rty Ne New Extensio ion Roo

• oms

Plannin ing Con

• nstructio

ion Com

• mpletion
• n

Granted Started Maldron Hotel Belfast City x 237 x x Q2 2018 Maldron Hotel, Newcastle* x 265 x x Q4 2018 Clayton Hotel, Manchester* x 300 Mid 2020 *35 year operating lease

2017 H1 Results Page 24

Dalata | Clayton Hotel Manchester

Agreement for lease contracts exchanged Subject to planning permission Planning application Q4 2017 Manchester ranks as one of our top target cities Excellent central location – Portland Street Local well regarded developer – Property Alliance Group Rent Cover Year 3 > 1.8x Rent per room £8.5k Target to open mid 2020

2017 H1 Results Page 25

Dalata | Recent Transactions - UK

Cl Clayton Hotel Car Cardiff Purchased freehold of hotel for £24m in November 2016 Existing lease had open market rent reviews – passing rent at time was £1.51m Completed sale and leaseback of hotel in June with M&G Real Estate for £22.1m (retained fixtures and fittings worth £2.1m) - new rent of £1.15m Effectively reduced rent by £360k through the two transactions – bought at an initial yield of 5.9% and sold at yield of 4.85%. Also eliminated uncertain future rent reviews Cr Croydon Par ark Hotel Sold company in June that held leasehold interest in hotel for nominal sum Hotel La La Tour Birmingham Purchased company that held the freehold interest in the hotel for £31m in July Sold the freehold for £30m in August to Deka Immoboilien and entered into a 35 year lease at initial rent of £1.6m per annum Modern hotel (built in 2012) with 174 rooms, restaurant, bar and extensive meeting/event facilities, located in the centre of Birmingham Hotel EBITDAR was circa £1.9m in the year ending 31 March 2017 Have identified significant opportunities to reduce costs and increase revenues Exploring the potential to add circa 40 rooms Will rebrand to Clayton in final quarter of this year

2017 H1 Results Page 26

Dalata | Recent Transactions - Ireland

Mald aldron Hotel Portlaoise Purchased freehold of hotel for €6.8m Existing lease had turnover related rent increases – rent was €570k in 2016 Initial yield on transaction of 8% Cl Clayton Hotel Car Cardiff Lan Lane an and Cl Clarion Hotel Li Liffey Vall alley Completed the acquisition of freehold interest of certain elements of Clayton Hotel Cardiff Lane and the Clarion Hotel Liffey Valley for €62m in August Clayton Hotel Cardiff Lane – 167 bedrooms, all public areas and vacant space on ground floor. Existing rent of €2.5m Clarion Hotel Liffey Valley – 158 bedrooms and all public areas of 353 room hotel. Segment being bought generated EBITDAR of €2.5m in 2016 Initial yield on transaction of circa 7.7% Tar ara Towers Hotel Planning application lodged in July to demolish existing hotel and replace with development comprising 140 bedroom hotel, 70 residential units and a basement car park Considering options that would result in Dalata either owning or leasing the completed hotel and residential units developed by a third party

2017 H1 Results Page 27

Outlook

Dalata | 2017 Outlook

Performance of our hotels across all three regions has been strong in July and August With limited new supply and continued strong demand, the outlook remains positive for our Dublin and Regional Ireland hotels for the balance of the year Impact of sterling weakness on UK visitors to Ireland is currently being more than offset by increased visitor numbers from other markets Revenue Management strategy of retaining large base of corporate and tour group business results in

• ur business mix being less reliant on transient customer

Outlook also remains positive for our UK hotels. Sterling weakness continues to attract increased business into London and NI markets. Regional UK markets continue to perform solidly Positive EBITDA contributions from the three hotels acquired since the end of the period Construction continues on our valuable development pipeline with over 1,280 rooms due to open at different stages of 2018 Exciting pipeline of opportunities for development of new hotels in the UK and Ireland Continued focus on operational requirements of our hotels through training/development programmes, investment in technology and interaction with our customers

2017 H1 Results Page 29

Dalata | Investor Day

Tuesday November 7th @ Clayton Hotel Chiswick Agenda

2017 H1 Results Page 30

Time Topic Speaker

8.00am – 8.45am Breakfast available for all attendees 8.45am – 9.00am Welcome and Overview Pat McCann, CEO 9.00am – 9.45am Impact of IFRS 16 (Accounting for Leases)

• n Dalata

Carol Phelan, Group Head of Financial Reporting, Treasury and Tax 9.45am – 10.15am Overview of Dalata’s Operations in the UK Emma Dalton, Group General Manager (UK) 10.15am – 10.45am Coffee Break 10.45am – 11.15am Overview of Revenue Mgt and Corporate Sales in the UK Richard Noakes, Group Revenue Manager – UK Richard Coupland, Group Sales Director - UK 11.15am – 12.15pm UK Growth Strategy Dermot Crowley, Deputy CEO – Business Development and Finance 12.15pm – 1.30pm Lunch Guest Speaker – Robin Rossman, Managing Director, STR Questions and Answers with Pat McCann and Dermot Crowley

Appendices

ISE: DHG LSE: DAL

Dalata | Depreciation Estimates

Bac ackground Dalata comprises primarily a portfolio of hotels acquired in multiple separate transactions since mid 2014 – estimates of remaining useful lives of their component parts were made on acquisition From 2015 onwards, there has been a significant programme of capital refurbishment. For the majority

• f expenditure, 5 year straight line depreciation was applied

Earlier this year, management initiated a comprehensive review of the useful lives of the assets making up each of the hotels Ap Approach Reviewed remaining useful lives of buildings and residual values for each hotel and concluded that they were materially accurate For refurbishment projects, broke down to constituent parts and estimated useful lives on line by line basis based on recent operational experience e.g. air conditioning and bathroom fit out - 12 years; case goods - 7 years; soft furnishings - 3 years Imp Impact Following the more detailed breakdown and analysis of the average useful lives of the various components within a room refurbishment, the average estimated useful life of a refurbished room moved from 5 to 8 years, with some variations depending on the nature of the refurbishment completed Depreciation charge from 2017 onwards will be less than previously guided and is now estimated to be in the €15m - €16m range

2017 H1 Results Page 32

Dalata | Capitalised Interest

Dalata has significant programme of development for both new hotels and extensions Accounting standards require interest for borrowings related to the acquisition or construction of a qualifying asset be capitalised as part of the cost of that asset The borrowings do not necessarily have to be drawn specifically for the project but can be general borrowings that could have been avoided if expenditure had not been spent The weighted average borrowing rate for each of sterling and euro loans, including hedging if applicable, is used depending on the asset location H1 2017: €0.7m (2016 not material) H2 2017 (forecast): €1.0m Assumes average exchange rate for H2 2017 of 0.92

2017 H1 Results Page 33

Dalata | FX Effects

Sterling exchange rate has significant impact on earnings Average exchange rate for EBITDA for H1 2017 was 0.8609 (H1 2016: 0.7819) On a constant currency basis H1 2017 EBITDA would been have €1.0m higher however, interest, depreciation and tax would also have been higher. As a result Profit After Tax would have been €0.2m higher The sterling exchange rate continues to weaken and is trending weaker than those in the second half of 2016 (0.859). If the rates had been at current levels c. 0.92, H2 2016 EBITDA would have been lower by €0.9m and Profit After Tax would have been €0.2m lower

2017 H1 Results Page 34

Dalata | Market Review – Dublin

350 1,150 2,250 500 1000 1500 2000 2500 2017 2018 2019

Savills forecast net additional 3,750 rooms by 2019

Dublin 201 2015 Actual 1 201 2016 Actual1 201 2017 F’cast 201 2018 F’cast Occupancy 82.1% 82.3% 82.6% 83.1% ARR 111.92 128.49 136.85 140.08 RevPAR 91.90 105.71 113.09 116.37 RevPAR % Variance 23.0% 15.0% 7.0% 2.9%

• 1. 2015 and 2016 numbers differ slightly from those previously reported as STR revised their

numbers

2017 H1 Results Page 35

Total market size of circa 20,885 rooms Significant number of rooms expected to open towards the end of 2018 and into 2019 and 2020 Increase in supply expected to be matched by increase in demand from continued economic growth, increased visitor numbers and growing evidence of office relocations from London to Dublin 7.2% RevPAR growth in H1 2017

Source: STR Global

Dalata | Market Review – Regional Ireland and UK

RevPAR Growth 20 2015 20 2016 H1 1 20 2017

Cork 9.6% 13.3% 11.5% Galway 13.3% 10.7% 8.6% Limerick 23.4% 16.4% 13.1%

Continuing strong demand from FDIs, domestic corporate and domestic leisure customers No increases in supply and very little supply pipeline Continued strong growth in 2017 for all three cities

Source: STR Global Source: Trending.ie

2017 H1 Results Page 36

RevPAR Growth 20 2015 20 2016 H1 1 20 2017

London 1.2%

• 0.9%

9.7% Manchester 7.5% 5.7% 1.8% Cardiff 14.2%

• 1.1%

10.9% Leeds 8.1% 3.7%

• 1.1%

Belfast 11.9% 9.0% 22.9%

Very strong RevPAR growth in London versus H1 2016 which was negatively impacted by new supply and impact of terrorism. Weaker sterling appears to be helping grow visitor numbers Re-opening of Waterfront Centre in mid 2016 together with positive impact of weaker sterling on ROI visitors resulted in a very strong period in Belfast Mixed performance at three UK regional cities

Dalata | Strong, Complementary Brand Proposition

Brand Pr Proposition

Maldron is all about providing a fun, relaxed time for all who arrive through our doors. Our great-value hotels are found in convenient locations close to local attractions - ensuring there’s always plenty to see and do. With friendly, helpful staff, good food and excellent facilities, it’s the perfect place to enjoy good times with family and friends

Rest assured, it’s a Maldron

You can always depend on Clayton Hotels to deliver exactly what you need, whether that’s a weekend away, a family break or an important business meeting. From the comfort of our bedrooms to the quality of

• ur facilities and the warm, helpful attitude of our staff
• every detail is handled with care

Where every moment matters

Bed edrooms

Generally standard rooms, with family and executive rooms in some locations Standard, superior and executive rooms

Food

• od an

and Beverage

Integrated bar and restaurant in some locations. Simple menus made from fresh quality produce Modern bar, restaurant and coffee dock. Food and beverage offering based on local influences and freshly sourced premium ingredients

Conf

• nference

Fac acilities

Meeting room facilities Extensive choice of modern meeting rooms and events facilities

Tar arget Cust ustomers

Both leisure and corporate with main focus on leisure guests and family Focus on corporate and conference midweek. Leisure, functions and weddings at weekend

2017 H1 Results Page 37

Dalata | Portfolio as at September 2017

Owned Hotels / Freehold Equivalent Hotel Rooms Clayton Hotel Dublin Airport 469 Clayton Hotel Manchester Airport 365 Clayton Hotel Leopardstown, Dublin 354 Clarion Hotel Liffey Valley (1) 158 Clayton Hotel Leeds 334 Clayton Hotel Ballsbridge, Dublin 304 Clayton Hotel Cardiff Lane , Dublin (2) 304 Maldron Hotel Newlands Cross, Dublin 297 Clayton Hotel Chiswick, London 227 Clayton Hotel Cork City (3) 201 Clayton Hotel Galway 195 Clayton Hotel Belfast 170 Clayton Hotel Sligo 162 Clayton Whites Hotel, Wexford 160 Clayton Hotel Limerick 158 Clayton Crown Hotel, London 152 Maldron Hotel Limerick 142 Maldron Hotel Parnell Square, Dublin 129 Maldron Hotel Pearse Street, Dublin 115 Tara Towers Hotel, Dublin 111 Clayton Hotel Silver Springs, Cork 109 Maldron Hotel Wexford 108 Maldron Hotel Sandyroad, Galway 104 Maldron Hotel Cork 101 Maldron Hotel Derry 93 Maldron Hotel Portlaoise 90 Total 5,112 Lease Agreements Hotel Rooms Clayton Hotel Burlington Road, Dublin 502 Ballsbridge Hotel, Dublin 400 The Gibson Hotel, Dublin 252 Maldron Hotel Dublin Airport 251 Clayton Hotel Cardiff, Wales 216 Hotel La Tour Birmingham 174 Maldron Hotel Tallaght, Dublin 119 Maldron Hotel Galway (Oranmore) 113 Maldron Hotel Smithfield, Dublin 92 Total 2,119 Management Contracts Hotel Rooms Directly with Owners Maldron Hotel Belfast International Airport 103 The Belvedere Hotel, Dublin 101 Shearwater Hotel, Ballinasloe, Co. Galway 104 Total 308

(1) Dalata own 158 rooms (2) Dalata own 190 rooms and lease 114 rooms (3) Dalata own 194 rooms and lease 7 apartments

2017 H1 Results Page 38 Summary by Hotel Category Hotels Rooms Owned 26 5,112 Leased 9 2,119 Mgmt Agreement – Owners 3 308 Total 38 7,539