May 2020 Contents Investment Highlights slide 3 Phased Approach - - PowerPoint PPT Presentation

From Lockdown to Recovery to Opportunity May 2020

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Contents

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

• bligation to update any forward-looking statements contained in this presentation, whether as a result of new information, future

events or otherwise.

Investment Highlights

slide 3

Phased Approach to Covid 19 Challenge

slide 5

Group Overview

slide 8

Growth Strategy

slide 14

Appendices

slide 19

2

Investment Highlights

Clayton Hotel, Cambridge

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Investment Highlights

4

Strong Asset Backed Balance Sheet - €1.4Bn of Prime Hotel Assets Strong Liquidity Position –

25th March: ‘The Group has significant financial headroom with material cash resources of €80m post disbursement of quarterly rent and interest scheduled to be paid over the next few days. In addition, Dalata can avail of further undrawn committed debt facilities of approximately €65m.’ 21st April: ‘ The consideration of €65 million is reflected in the contract by a purchase price of €61.95 million and a rent-free period of one year, equating to €3.05 million. The proceeds of the Transaction will be retained as cash in the Company.’

Experienced Management Team

Managed through Irish economic crash after Global Financial Crisis Proven track record of exploiting opportunities arising from crisis Decentralised management structure

Identified Growth Strategy in UK & further opportunities likely to emerge from crisis

Phased Approach to Covid 19

Clayton Hotel Charlemont

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• Rapid reduction of costs/ protection of cash
• Suspension of all non committed capital

expenditure

• Closure of hotels other than for essential

services customers

• Understanding costs in a zero revenue model
• Agreement with banking club
• Communication with stakeholders

6

Phased Approach to Covid 19 Challenge

• Sale & Leaseback of Clayton Charlemont
• Maintain engagement with staff
• Hotel management teams remain in situ,

servicing any customers

• Cash conservation
• Detailed planning for hotel re-openings –

defining of new product – being innovative

• Communication with stakeholders
• Assess strategic opportunities that may arise
• Gradual Re-opening of hotels
• Generation of cashflow
• Social distancing requirements, low levels of

international travel - negative impact on revenues

• Focus on domestic markets
• Development sites back up and running
• Assessing distressed opportunities as they arise
• Brexit?

Phase 3 – Re-opening while social distancing Phase 2 - Lockdown Phase 1- Initial Reaction Phase 4 – The New Normal

• Either vaccine in use or effective virus

treatments in place

• Impact on hotel supply ?
• Impact on demand – recession, reduced

business travel ?

• Focus on sustainability
• Acceptable levels of leverage?
• Sustainability of older competitor hotels
• Air BnB?

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Clayton Hotel Charlemont

7

Creation of Significant Shareholder Value Feb 2016 Mar 2016 – Nov 2018 April 2020

Site purchased for €11.9m located in the centre of the city New 187 room hotel built for €29.7m (Total Dev Cost of €220k per room) Sold for €65m with 35 year lease – annual rent of €3.05m Projected Stabilised EBITDAR of €5.5m to €6.0m Creation of leased asset with projected EBITDA of €2.5m to €3.0m Development Profit of €23m

Group Overview

Clayton Hotel Manchester Airport

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Breakdown by Region – Dec 2019

57% 20% 23% 66% 13% 21% 50% 21% 29%

Split of Segments EBITDAR: Owned - €126.8 million (69%) Leased - €56.0 million (31%)

9

Owned & leased rooms at 31 December 2019 8,949 Share of revenue €429.2 million Share of Hotel Segments EBITDAR €182.8 million

Dublin Regional Ireland UK

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Entering the Crisis in A Strong Financial Position

All figures €million 31 December 2019 Post IFRS 16 31 December 2019 Pre IFRS 16 31 December 2018 Non-current assets Property, plant and equipment 1,471.3 1,471.3 1,176.3 Right-of-use assets 386.4

• Other non-current assets1

62.0 90.2 82.4 Current assets Trade and other receivables and inventories 23.7 29.3 24.5 Cash 40.6 40.6 35.9 Total assets 1,984.0 1,631.4 1,319.1 Equity 1,072.8 1,080.4 902.6 Loans and borrowings 411.7 411.7 301.9 Lease liabilities 362.1

• Trade and other payables

66.2 67.7 65.2 Other liabilities2 71.2 71.6 49.4 Total equity and liabilities 1,984.0 1,631.4 1,319.1

Strong balance sheet with an attractive covenant to secure future leases. Almost €1.4 billion of prime hotel assets (post sale

• f Clayton

Hotel Charlemont)

• Valuation at yields of 8.5% to

10.75% for Dublin assets At year end, cash

• f

€40m and unutilised facilities of €121m Facilities mature in Oct 2024 with no repayments Pre IFRS 16 Net Debt to Adjusted EBITDA of 2.8x (post IFRS 16: 4.5x) Debt and Lease Service Cover of 3.2x

10

• 1. Other assets includes intangible assets, goodwill, deferred tax assets, investment property, contract fulfilment costs and other receivables
• 2. Other liabilities includes deferred tax liabilities, derivatives, provision for liabilities and current tax liabilities

Slide | 11

Delivering resilience

The Difference with Dalata

Decentralised model Our people Experienced management teams

Teams are empowered which enables local decision

• making. Strongly placed to

exploit opportunities & react to challenges Focus on employee development and internal promotion leads to highly engaged and motivated people Strong track record of

• pening new hotels and
• perating existing hotels

Exceptional hotel

• perators

Focused on continuous improvement

Comfortable gearing

Proactive cost management minimised profit impact of fall in Irish RevPAR Investment in technology is delivering enhanced information. Enables informed decision making Comfortable gearing with Debt and Lease Service Cover of 3.2x at year end

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Proven Ability to Grow out of a Crisis

12

63 85 105 120 135 (€million)

5 year Adjusted EBITDA* 5 year Adjusted Basic EPS*

39.6% 41.4% 42.4% 42.6% 42.6%

5 year growth in portfolio value

* Pre IFRS 16

609 822 999 1,176 1,471 (€million)

5 year Hotel EBITDAR margin

20 27 38 43 46 (cents)

* Pre IFRS 16

5 year rooms by region 2,871 rooms in pipeline

5.5 7.1 7.4 8.5 8.9 Room Numbers* (‘000)

4.5 5.1 1.9 1.9 2.6 4.8

2019 2023 Room Numbers* (‘000)

Current rooms

Dublin Regional Ireland UK

Including current pipeline

9k rooms 11.8k rooms

* Includes owned & leased rooms

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History of Converting Growing Revenues into Cashflow

Modern well invested portfolio with highly motivated and developed teams delivering strong cash flows on the back of strong margins Strong track record of re-investing cash to deliver further returns Cash used to fund progressive dividend policy and expansion of portfolio while staying within comfortable gearing levels

€48.5m €59.3m €71.7m €86.6m €100.6m 2015 2016 2017 2018 2019

Growth Strategy

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Maldron Hotel Parnell Square, Dublin

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UK

8 new hotels (7 leased, 1 owned) 1 extension to existing hotel 2,239 rooms

Pipeline of almost 3,000 rooms and growing

Dublin

3 new hotels (2 leased, 1 owned) 1 extension to existing hotel 632 rooms

Property New Extension Owned

• r leased

Rooms Planning Granted Construction started Estimated Completion Dublin The Samuel* x Leased 204 x x TBC Maldron Hotel Merrion Road x Owned 140 x x TBC Clayton Hotel Cardiff Lane:

• New conference centre
• Additional rooms**

x x Owned 88 x x x Q4 2020 TBC

• Maldron Hotel Croke Park*

x Leased 200 TBC UK Clayton Hotel Birmingham x Leased 44 x x Q4 2020 Maldron Hotel Glasgow* x Leased 300 x x TBC Clayton Hotel Glasgow* x Leased 303 x x TBC Clayton Hotel Manchester* x Leased 329 x x TBC Clayton Hotel Bristol* x Leased 255 x x TBC Maldron Hotel Manchester* x Leased 278 x x TBC Maldron Hotel Shoreditch London x Owned 145 x TBC Maldron Hotel Birmingham* x Leased 325 x TBC Maldron Hotel Liverpool* x Leased 260 x TBC Total 2,871

*35 year operating lease ** Contingent on obtaining vacant possession

15

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There is a structural growth opportunity in the 3 & 4 star segment

Shortage of large hotel operators Fragmented market Older room stock Lack of investment in employees

International brands have evolved to a franchise model leaving a shortage of operators with any scale Market is very fragmented in terms of brand, operators and

• wners

Over 40% of the rooms are over 40 years old Difficult for smaller operators or larger Third Party Operators (TPOs) to provide same level of training or

• pportunity due to lack of tenure

(TPOs) or scale (independent

• perators)

The Difference with Dalata Allows us to outperform in Regional UK

Location of our assets Quality of our assets – modern and fresh Financial resources and ability to secure sites Depth of hotel

• perational expertise

and resources

Focused on prime locations in large UK cities with strong mix of corporate and leisure

• guests. Less downside

risk compared to smaller cities in regional UK New and recently refurbished hotels can significantly

• utperform the older and tired
• competition. Average age of
• ur UK hotels is 9 years

Strong balance sheet with attractive covenant for developers and fixed income investors Dalata operates a decentralised model with a strong focus on training and development at all

• levels. Highly motivated

management teams that are part

• f a large, growing hotel group

Dalata’s Advantage in Regional UK

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London Growth

17

As a result of securing these projects we have established an excellent reputation amongst property developers and agents who now show us further

• pportunities in London.

Recent deals in London

Clayton Hotel City of London Maldron Hotel Shoreditch

Acquired newly completed hotel for £91 million located at Aldgate in January 2019 Successfully opened the hotel later that month Adding 13 bedrooms which will bring total rooms to 225 Total cost of approximately £435k per key Hotel traded strongly in year

• ne
• f
• peration

£5.0 million uplift in property valuation since acquisition Acquired a prime site with planning approval for a new hotel for £32.1 million in August 2019 Total cost of developing the hotel will be circa £60 million including site cost Site purchase funded by debt; development cost funded from operating cash flows Revised planning permission has increased room count from 135 to 148 Development on hold currently

Slide |

Similar number of rooms in UK as Dublin by 2023

18 Dublin 50% Regional Ireland 21% UK 29%

Geographical mix of rooms

Owned 72% Leased 28%

Ownership mix of rooms At December 2019 Over 8,900 rooms Average age of hotels: Group - 15 years UK – 9 years Expectation at December 2023 Over 11,600 rooms Average age of hotels: Group - 15 years UK – 8 years

Dublin 42%

Regional Ireland 16%

UK 42%

Geographical mix of rooms

Owned 58% Leased 42%

Ownership mix of rooms Impact on Dalata Over 30% increase in rooms Maintain a young pool

• f assets which require

less maintenance capex, increasing cash available to pay dividends and re-invest in the business Further diversifying business geography UK EBITDAR margins should increase

• nce

the new hotels are

• perating

at normal levels – targeting average of 43% in year three of operation

Appendices

Clayton Hotel Birmingham

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Growing a Sustainable Business

20

Formation of ESG board committee demonstrating commitment Identified priorities including: People development and employee wellbeing Health and safety Community engagement Environment Starting journey, focused on improvement

AA B- Progress to date

Our People

367 people on structured development programmes at the end of February. 1,800 enrolments in our UK and Ireland share save scheme since 2016.

Health and Safety

Reducing the number of incidents and accidents.

Community engagement

Dalata Digs Deep raises

• ver €1.2 million for partner

charities.

Environment

All of our hotels use 100% green electricity contracts, which is verified as being sourced from renewable generation.

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Successful Dalata model in action at Clayton Hotel Birmingham

Dalata Delivering in the UK

21 65.4 69.8 75.5 2017 2018 2019 1.6 2.2 2.6 2017 2018 2019 24% 34% 37% 2017 2018 2019

RevPAR £ EBITDAR (£m) EBITDAR margin

Targeting EBITDAR margin of 43% RevPAR up 8.1% versus market decline of 2.2%

Occupancy %

77% 80% 88% 2017 2018 2019

2017

• Acquired Hotel La Tour

Birmingham in July 2017

• Executed sale &

leaseback with Deka

• Newly built in 2012
• Rebranded Clayton
• Centrally located

2017-2019

• Dalata rooms revenue

strategy drives RevPAR

• Led by highly motivated

team, developed within Dalata

• Dalata technology

platform delivers efficiencies

• High level of customer

& employee satisfaction

2020 onwards

• Continue to build on

the strong performance

• Adding 44 room

extension in 2020 which will increase room numbers to 218 and add £0.9 million to EBITDAR

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Hotel Portfolio at May 2020

(1) Remaining 18 rooms owned by third parties (2) Dalata own 257 rooms and lease 47 rooms (3) Dalata own 194 rooms and lease 7 apartments (4) Effective ownership of hotel on 99 year lease

22

29 owned hotels with 6,226 rooms 12 leased hotels with 2,726 rooms 11 new hotels in pipeline 2,871 rooms 3 management agreements with 256 rooms

Clayton Hotel Portfolio in Ireland Owned Hotels / Freehold Equivalent Hotel Rooms Clayton Hotel Dublin Airport 608 Clayton Hotel Leopardstown, Dublin 357 Clayton Hotel Liffey Valley, Dublin (1) 343 Clayton Hotel Ballsbridge, Dublin 335 Clayton Hotel Cardiff Lane, Dublin (2) 304 Clayton Hotel Cork City (3) 201 Clayton Hotel Galway 195 Clayton Hotel Sligo 162 Clayton Whites Hotel, Wexford 160 Clayton Hotel Limerick 158 Clayton Hotel Silver Springs, Cork 109 Leased hotels Clayton Hotel Burlington Road, Dublin 502 Ballsbridge Hotel, Dublin 400 The Gibson Hotel, Dublin 252 Clayton Hotel Charlemont, Dublin 187 Total Clayton rooms in Ireland 4,273 Maldron Hotel Portfolio in Ireland Owned Hotels / Freehold Equivalent Hotel Rooms Maldron Hotel Newlands Cross, Dublin 297 Maldron Hotel Parnell Square, Dublin 182 Maldron Hotel Sandy Road, Galway 165 Maldron Hotel South Mall, Cork City 163 Maldron Hotel Limerick 142 Maldron Hotel Kevin Street, Dublin 137 Maldron Hotel Pearse Street, Dublin 119 Maldron Hotel Wexford 108 Maldron Hotel Shandon, Cork City 101 Maldron Hotel Portlaoise 90 Leased hotels Maldron Hotel Dublin Airport 251 Maldron Hotel Tallaght, Dublin 119 Maldron Hotel Oranmore Galway 113 Maldron Hotel Smithfield, Dublin 92 Total Maldron rooms in Ireland 2,079 UK Hotel Portfolio Owned Hotels / Freehold Equivalent Hotel Rooms Clayton Hotel Manchester Airport (4) 365 Clayton Hotel Leeds 334 Maldron Hotel Belfast City 237 Clayton Hotel Chiswick, London 227 Clayton Hotel City of London 212 Clayton Hotel Belfast 170 Clayton Crown Hotel, London 152 Maldron Hotel Derry 93 Leased hotels Maldron Hotel Newcastle 265 Clayton Hotel Cardiff, Wales 216 Clayton Hotel Birmingham 174 The Tamburlaine Hotel, Cambridge 155 Total UK rooms 2,600 Pipeline Owned Maldron Hotel Shoreditch, London 145 Maldron Hotel Merrion Road, Dublin 140 Extension at Clayton Hotel Cardiff Lane, Dublin 88 Leased Clayton Hotel Manchester City 329 Maldron Hotel Birmingham 325 Maldron Hotel Glasgow 300 Clayton Hotel Glasgow 303 Maldron Hotel Manchester 278 Maldron Hotel Liverpool 260 Clayton Hotel Bristol 255 The Samuel, Dublin 204 Maldron Hotel Croke Park, Dublin 200 Extension at Clayton Hotel Birmingham 44 Total pipeline rooms 2,871