easyHotel plc easyHotel .com simple comfort, great value Investor presentation May 2016
Disclaimer • This presentation (this "presentation" ) is for general information only and is the property of easyHotel plc ( " easyHotel " ). Making this presentation available in no circumstances whatsoever implies the existence of a commitment or contract by or with easyHotel, or any of its affiliated entities, or any of its or their respective subsidiaries, directors, officers, representatives, employees, advisers or agents ( "Affiliates" ) for any purpose. • This presentation as well as any other related documents or information do not purport to be all inclusive or to contain all the information that you may need. There is no obligation of any kind on easyHotel or its Affiliates to update this presentation. No representation or warranty, express or implied, is or will be made in relation to, and no responsibility or liability is or will be accepted by easyHotel or its Affiliates as to, or in relation to, the accuracy, reliability, or completeness of any information contained in this presentation and easyHotel (for itself and on behalf of its Affiliates) hereby expressly disclaims any and all responsibility or liability (other than in respect of a fraudulent misrepresentation) for the accuracy, reliability and completeness of such information. • All projections, estimations, forecasts, budgets and the like in this presentation are illustrative exercises involving significant elements of judgement and analysis and using assumptions, judgements and analyses which may or may not prove to be correct. The actual outcome may be materially affected by changes in e.g. economic and/or other circumstances. Therefore, in particular, but without prejudice to the generality of the foregoing, no representation or warranty is given as to the achievability or reasonableness or any projection of the future, budgets, forecasts, management targets or estimates, prospects or returns. You should not do anything (including entry into any transaction of any kind) or forebear to do anything on the basis of this presentation. Before entering into any arrangement, commitment or transaction you should take steps to ensure that you understand the arrangement, commitment or transaction and have made an independent assessment of the appropriateness of the arrangement, commitment or transaction in light of your own objectives and circumstances, including the possible risks and benefits of entering into such an arrangement, commitment or transaction. • No information, representations or opinions set out or expressed in this presentation will form the basis of any contract. • This presentation is not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident or located in any locality, state, country or other jurisdiction where such distribution or use would be contrary to law or regulation or which would require any registration or licensing within such jurisdiction. • The information and opinions contained in this document are provided as at the date of this presentation and are subject to change without notice. easyHotel plc p2
Introduction Guy Parsons Chief Executive Officer easyHotel plc p3
Highlights HY2016 vs. HY2015 • 8.0% like-for-like revenue increase for owned hotels • 10.9% Adjusted EBITDA increase 1,880 rooms 21 Hotels Experienced management team 14 Cities delivering growth strategy • 9 Countries Scalable platform • Professionalising operations Placing to raise up to £30m • Accelerating owned hotel roll-out • Invest in assets with high returns Strong development pipeline: Owned hotels: Liverpool, Manchester, Birmingham^, Ipswich*, Barcelona* Franchise hotels: Brussels, Amsterdam, Dubai ^ Acquisition to be completed * Subject to planning permission easyHotel plc p4
2015/2016 half year results Marc Vieilledent Chief Financial Officer easyHotel plc p5
Financial Summary for Half Year Ending 31 March 2016 • Total system sales up 10.4% to £9.66m (2015: £8.75m*) 15% • Total revenue up by 11.6% to £2.59m (2015: £2.32m*) • 8.0% like-for-like revenue increase for owned hotels • Gross profit margin was 64.6% (2015*: 64.0%), excluding pre-opening costs • Adjusted EBITDA up by 10.9% to £0.58m (2015: £0.52m) • Cash and cash equivalents was £17.61m (Sep 2015: £22.64m), after £4.59m of capital expenditure • Interim dividend of 0.11p per share (2015: nil) This excludes South Africa one-off fee * 2015 amounts exclude the £0.27m one-off termination fee of a South African franchisee agreement easyHotel plc p6
Profit Before Tax Before One-Offs YTD March 2016 YTD March 2015 Change 15% £’000 £’000 % Revenue 2,589 2,319 11.6 Gross profit 1,671 1,485 12.5 Gross profit margin 64.6% 64.0% 0.6pt Central costs (1,096) (966) 13.4 Adjusted EBITDA 575 519 10.9 Depreciation and amortisation (224) (179) 25.1 Interest (29) (36) (19.4) Profit before tax before one-offs 322 304 5.9 Central staff Profit before Gross profit up costs on budget tax before one- 12.5% at £0.70m offs up 5.9% (2015:£0.57m) This excludes South Africa one-off fee easyHotel plc p7
Profit After Tax and One-Offs 15% YTD March 2016 YTD March 2015 £’000 £’000 Profit before tax before one-offs 322 304 One-offs* (182) 62 Profit before tax 140 366 Taxation (57) (122) Profit for the period 83 244 *One-offs South African one off - 270 Pre-opening costs (Liverpool) (49) - SBP/LTIP and other expenses (133) (3) Foreign exchange loss (Benelux franchisee) - (205) Total (182) 62 This excludes South Africa one-off fee easyHotel plc p8
Owned Hotel Performance YTD March 2016 YTD March 2015 Growth 15% £’000 £’000 % Owned Hotel Revenue 2,022 1,705 18.6 Profit before tax 814 674 20.8 L4L Revenue Total Profit before Revenue tax 8.0% 20.8% 18.6% Weighted-average* RevPAR ROCE on existing RevPAR growth hotels +9.9% £25.40 >15% This excludes South Africa one-off fee *Weighted by room number £25.4 easyHotel plc p9
Franchise Hotel Performance 15% YTD March 2016 YTD March 2015 Growth £’000 £’000 % Franchised Hotel Revenue 567 884 (35.9) Profit before tax 317 449 (29.4) • Like for like revenue growth of 1.1% • Decrease in profit before tax reflects: • 2015 one-offs: termination fees (South Africa, Larnaka) and FX loss related to Benelux franchisee • 2016 investment for growth: marketing and expenses related to franchise and development agreement negotiations This excludes South Africa one-off fee easyHotel plc p10
Cash Flow Analysis YTD March 2016 YTD March 2015 15% £’000 £’000 Adjusted EBITDA 575 519 One-offs (excl. non-cash LTIP/SBP cost) (58) 65 Working capital (748) (14) Net cash generated from operations (231) 570 Net cash used in investing activities* (4,590) (861) Net cash generated from/(utilised by) financing activities (203) (962) Net increase/(decrease) in cash and cash equivalents (5,024) (1,253) Cash and cash equivalents at the beginning of the period 22,636 24,264 Exchange differences on translation of foreign operations 2 - Cash and cash equivalents at the end of the period 17,614 23,011 *Investment activity breakdown: Liverpool Birmingham Manchester Barcelona £4.6m £0.3m £0.2m £3.3m £0.8m This excludes South Africa one-off fee easyHotel plc p11
Financing • Current hotel pipeline outstanding commitment of c. £24m • Cash on the balance sheet of £17.6m at 31 March 2016 • NatWest bank facility of £7.2m: • Due for repayment in January 2017 • Discussions underway with UK banks to replace existing facility • Initiated discussions with Spanish banks to part-fund Barcelona development for a € denominated facility at 50-60% Loan To Cost • Strategy not to borrow more than 3x net debt/mature EBITDA • Board continues to evaluate funding options easyHotel plc p12
Current Trading and Prospects • Owned hotels outperforming the market* • Construction started on the owned Liverpool and Manchester hotels, and the franchised Brussels, Amsterdam and Bur Dubai hotels • Full year trading on track to meet board expectations * STR Global easyHotel plc p13
Strategy update Guy Parsons Chief Executive Officer p14
Opportunity • UK hotel market has significant potential to grow Total hotel market estimated at* : Share 2014 2020 2030 2014 2020 2030 (000) rms rms rms % % % Branded Budget 137 180 215 19% 23% 25% All Other 602 600 635 81% 77% 75% UK Market 739 780 850 100% 100% 100% • Across Europe c.73% of decisions are based on a combination of location and/or price • Budget hotels used predominantly by domestic guests • easyHotel brand is a significant super budget operator • High brand awareness of “ easy ” brands driving consumer preference * Melvin Gold Consulting 2015 easyHotel plc p15
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