Q1-2013 Results Wolfgang M. Neumann, President & CEO Knut - PowerPoint PPT Presentation

Q1-2013 Results Wolfgang M. Neumann, President & CEO Knut Kleiven, Deputy President & CFO April 24, Stockholm

Rezidor Q1 2013 Highlights • L/L RevPAR up by 5.7%—prior to March 22 (beginning of Easter holiday) up by 9% +5.7% L/L RevPAR • Six consecutive quarters of increased market share (3.3% YTD) • Revenue flat, due to conversion of nine hotels (1,100 rooms) +3.3% from leases to fee-based agreements and lower RevPAR market growth in Nordics and ROWE share • 13.6% growth in fee revenue +1 p.p. • EBITDA Margin increased by 1 percentage point EBITDA Margin • 2.5 MEUR EBIT improvement, despite Easter and non-Leap Year impact of negative 4-5 MEUR +2.5 MEUR • 4.2 MEUR improvement in Free Cash Flow EBIT 2 / Q1-2013 Interim Results / 24 April 2013 / Stockholm

Q1 is always the weakest quarter, but Q1 2013 EBITDA was the best since 2008 EBITDA (MEUR) 40 30 20 10 0 -10 -20 08 09 10 11 12 13 08 09 10 11 12 08 09 10 11 12 08 09 10 11 12 3 / Q1-2013 Interim Results / 24 April 2013 / Stockholm

Substantial occupancy growth for 5 consecutive quarters L/L Occupancy L/L Average Room Rate L/L RevPAR 15% 12.6% 10% 6.9% 6.8% 6.5% -0.1% 5.9% 5.7% 5.6% 4.6% 4.2% 5% 3.2% 3.0% 2.3% 0% -5% -10% 4 / Q1-2013 Interim Results / 24 April 2013 / Stockholm

Occupancy rise across all regions; rates softening in ROWE, Nordics due to Easter effect NORDICS REST OF WESTERN EUROPE L/L Occupancy L/L Average Room Rate L/L Occupancy L/L Average Room Rate L/L RevPAR 20% 20% 15% 15% 10.7% 8.6% 10.0% 10% 10% 3.4% 4.4% 1.2% 3.6% 3.1% 0.7% 5% 5% 2.4% 2.2% 2.0% 1.8% 1.5% 1.7% 0.8% -1.2% 0% 0% 2.3% -5% -5% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2011 2012 2013 2011 2012 2013 EASTERN EUROPE MIDDLE EAST & AFRICA L/L Occupancy L/L Average Room Rate L/L RevPAR L/L Occupancy L/L Average Room Rate L/L RevPAR 19.1% 20% 30% 17.3% 20.5% 15.3% 20% 11.5% 17.1% 13.0% 15% 12.2% 11.9% 10.8% -4.2% 10% 10% -6.1% 6.1% 5.7% 4.0% 0% 7.9% 5% -10% -12.8% 0% -20% -27.8% -5% -30% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2011 2012 2013 2011 2012 2013 5 / Q1-2013 Interim Results / 24 April 2013 / Stockholm

Q1-2013 Signings in line with last year, and focused on Emerging Markets SIGNINGS Q1-2013 Q1-2012 Hotels 5 6 Rooms 1,100 1,400 Summary: Radisson Blu Sheremetyevo Airport Moscow, Russia • Expanding Park Inn in important emerging markets of Turkey, Ukraine and Russia • Prominent new Radisson Blu Hotels in Port Harcourt, Nigeria and at Sheremetyevo Airport, Moscow • Asset Management: Extended two margin-enhancing leases in ROWE 100% >50% >75% Radisson Management Eastern Contracts Blu Europe Radisson Blu Port Harcourt, Nigeria 6 / Q1-2013 Interim Results / 24 April 2013 / Stockholm

Brand-enhancing openings in key markets OPENINGS Q1-2013 Q1-2012 Hotels 5 4 Rooms 1,000 1,000 Rooms Offline 750 150 Net openings 250 850 Summary: • Expansion in Emerging Markets: Radisson Radisson Blu Maputo, Mozambique Blu Maputo and Radisson Blu Rosa Khutor, Russia (Sochi) • Balanced by growth in Mature Markets: Park Inn Amsterdam Airport Schiphol, Radisson Blu in Dortmund, Germany and Gothenburg, Sweden • Offline hotels mainly under-performing management agreements 85% 50% 65% Radisson Managed Mature Blu Markets Park Inn Amsterdam Airport Schiphol, Netherlands 7 / Q1-2013 Interim Results / 24 April 2013 / Stockholm

Shifting to Asset Light: Rooms in Operation END 2006 END 2009 Q1-2013 22% 23% 24% 26% 31% 26% 50% 54% Franchised Managed Leased Franchised Managed Leased Franchised Managed Leased • No new leased hotels signed since 2009 • 11 leases, 1,300 rooms terminated since 2011 • Since 2011: 80% of room signings in emerging markets, where fee-based agreements are standard 8 / Q1-2013 Interim Results / 24 April 2013 / Stockholm

Second largest pipeline in Africa Sub-Saharan Africa 7,000 26 • Operations: 15 Hotels / 3,000 Rooms Hotels • Pipeline: 22 Hotels / 4,000 Rooms 6,000 Rooms in Pipeline 5,000 4,000 3,000 2,000 1,000 0 Accor Hilton IHG Marriott Movenpick Starwood Kempinski Louvre African Sun Source / W Hospitality 2012 / Number of Rooms in Pipeline 9 / Q1-2013 Interim Results / 24 April 2013 / Stockholm

Dominant position in Russia, CIS & Baltics 45 14,000 Hotels Russia 12,000 • Operations: 22 Hotels / 6,900 Rooms • Pipeline: 21 Hotels / 5,100 Rooms 10,000 Rooms in Operation 8,000 6,000 4,000 2,000 0 IHG Marriott Accor Hyatt Wyndham Starwood Sokos Kempinski Hilton Russia Other CIS Baltics Source / Respective group websites / December 2012 / Number of Rooms in Operation 10 / Q1-2013 Interim Results / 24 April 2013 / Stockholm

Financial Update Knut Kleiven, Deputy President & CFO

Income Statement Margin improvement despite flat revenue Despite RevPAR growth, revenue flat IN MEUR Q1-2013 Q1-2012 due to : • 9 leases converted to fee-based Revenue 207.1 206.9 agreements • Slower growth in lease-heavy Nordic and EBITDAR 58.7 58.4 ROWE markets • Strengthening of Euro EBITDAR Margin % 28.3% 28.2% • Easter and leap year effect (-9.0) EBIT positively affected by: EBITDA -2.8 -5.0 • Exit from unprofitable leases (+2.0) • Central cost reduction (+1.1) EBITDA Margin % -1.4% -2.4% • Reduced central advertising and sales spend (+1.9) EBIT -10.0 -12.5 EBIT negatively affected by: • Easter (-3.5) EBIT Margin % -4.8% -6.0% • Leap year 2012 (-1.0) NET RESULTS -11.2 -14.1 Free cash flow improved by 4.2 MEUR 12 / Q1-2013 Interim Results / 24 April 2013 / Stockholm

Flow-through Q1 2013 vs Q1 2012 Strong impact from asset management and new hotels Q1-2013 vs Reported Change FX Hotel Exits New Hotels One-offs L/L Q1-2012 Revenue 0.2 1.2 -5.0 3.4 0.0 0.6 EBITDAR 0.2 0.4 0.0 1.1 0.0 -1.5 EBITDA 2.2 0.3 1.6 1.1 0.0 -0.8 EBIT 2.5 0.2 1.6 1.1 0.0 -0.4 13 / Q1-2013 Interim Results / 24 April 2013 / Stockholm

Q1 Leased business Reduced revenue and EBIT due to exits and Easter impact Leased Revenue MEUR 200 Nordics : 150 • Easter EBITDA impact estimated at 2- 3 MEUR Q1 2013 100 • Positive result in Norway offset by Q1 2012 softening markets in Sweden and 50 renovation displacement 0 • 2 leased hotels converted to NO ROWE Total franchises Rest of Western Europe: EBIT MEUR 6 • Revenue drop from 7 leases converted 4 to management 2 0 • Improvement across all countries, NO ROWE Total Q1 2013 -2 except Switzerland and Belgium -4 Q1 2012 • Positive EBIT impact from exits -6 -8 -10 -12 14 / Q1-2013 Interim Results / 24 April 2013 / Stockholm

Q1 Fee business Emerging markets continue to drive the growth Eastern Europe: Fee Revenue MEUR 30 • Revenue up due to strong RevPAR 25 growth and new hotels 20 • Strong growth in Baltics with 12% Q1 2013 15 RevPAR increase Q1 2012 10 • EBIT slightly below last year due to 5 provisions for bad debt 0 NO ROWE EE MEAO Total Middle East, Africa & Others: EBIT MEUR 12 • 21% L/L RevPAR growth led to 22% 10 improvement in fee revenue 8 • Strongest performing region, with 6 Q1 2013 significant growth in South Africa, UAE 4 Q1 2012 and Saudi Arabia 2 • 41% EBITDA improvement 0 NO ROWE EE MEAO Total -2 15 / Q1-2013 Interim Results / 24 April 2013 / Stockholm

Investors Day 2013 • Date: June 5, 2013 • Venue: Radisson Blu Waterfront Hotel, Stockholm • Programme : — 08:00 Breakfast Behind the Scenes — 09:00 Presentations: − Wolfgang M. Neumann President & Chief Executive Officer − Russell Kett Chairman – HVS London − Elie Younes SVP & Head of Group Development − Eric de Neef SVP Marketing and Customer Relationship Management, Global Branding Park Inn − Olivier Harnisch EVP & Chief Operational Officer − Knut Kleiven Deputy President & Chief Financial Officer — 13:00 Lunch — 14:00...One-on-one meetings with the management team 16 / Q1-2013 Interim Results / 24 April 2013 / Stockholm

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