Q3-2008 RESULTS 3 November 2008 Kurt Ritter, President & CEO - - PowerPoint PPT Presentation

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Q3-2008 RESULTS 3 November 2008 Kurt Ritter, President & CEO - - PowerPoint PPT Presentation

Apr 27, 2023 165 likes •422 views

Q3-2008 RESULTS 3 November 2008 Kurt Ritter, President & CEO Knut Kleiven, Deputy President & CFO 1 Puneet Chhatwal, Chief Development Officer EUROPEAN MARKET GOING INTO NEGATIVE 10 5 % change 0 -5 -10 3 3 4 4 5 5 6 6 7

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Q3-2008 RESULTS

3 November 2008 Kurt Ritter, President & CEO Knut Kleiven, Deputy President & CFO Puneet Chhatwal, Chief Development Officer

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Series1 Series2 Series3

Occupancy Average Room Rate RevPAR

EUROPEAN MARKET GOING INTO NEGATIVE

SOURCE: STR Global – Seasonally adjusted RevPAR for Europe

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MARKET DEVELOPMENT

  • Change in market trend in Q3
  • Fall in occupancy and slow down in

rate growth

  • Credit crunch is likely to delay room
  • penings
  • Profit targets cut across the sector
  • Growth opportunities in a softer market
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REZIDOR HIGHLIGHTS

  • Slowdown in Europe reflected in Q3 figures

– Flat L/L RevPAR development – RevPAR negatively affected by FX

  • Cost savings - MEUR 20 on annual basis
  • Growth focus: emerging markets and fee contracts
  • Signings at record levels

– ca 85% of pipeline fee based and over 60% in emerging markets

  • Sound financial position - no debt and refinancing risk
  • Radisson SAS “Most Improved Brand of the Year” by BDRC
  • Uncertain global environment - difficult to predict future development
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BUSINESS DEVELOPMENT

BUSINESS DEVELOPMENT

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CREDIT CRUNCH IMPACT ON GROWTH

  • Difficult to fund hotel projects

– UBS Investment Bank: hotel transactions down 62% in EMEA in H108 – Jones Lang LaSalle: global sales of hotel properties down 70% – Lodging Econometrics: Construction starts at lowest level in five quarters

  • LTV’s down at least 10 percentage points; spreads widening
  • Anticipated surge in distressed properties seeking buyers or

international branding

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BUSINESS DEVELOPMENT HIGHLIGHTS

SIGNINGS YTD 08 – by BRAND SIGNINGS YTD 08 – by REGION

  • 50,000+ rooms in operation
  • Nearing 75,000 rooms in
  • peration and under

development

  • 350+ hotels in operation or under

development

  • Record year for Signings
  • Ca 4 bn EUR of investment in

pipeline, 0% financed by Rezidor

34% 60% 6%

Radisson Park Inn Others

24% 7% 30% 39%

Nordics ROWE MEAO EE

63% in Emerging Markets

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SIGNINGS - ALREADY SURPASSING 2007

10,027 YTD08 6,239 YTD07 1,641 2,884 ROOMS Q307 Q308 SIGNINGS 26% 5% 69% 0% 13% 87% 12% 11% 77% 10% 21% 69% MANAGED LEASED FRANCHISED

  • Ca 60% of Rezidor’s Pipeline under construction

– 100% of pipeline 2009 under construction

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OPENINGS 2008

5 10 15 20 25 YTD 08 YTD 07 1000 2000 3000 4000 5000 YTD 08 YTD 07 MEAO ROWE EE NO 1000 2000 3000 4000 5000 YTD 08 YTD 07

Radisson Park Inn Others

Hotel Openings Rooms Opened by Region Rooms Opened by Brand

  • YTD08: 86% Fee Based (calculated by number of rooms)

+188% 544 1,564 ROOMS VAR Q308 Q307 OPENINGS

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(10) 52,000 rooms

IN OPERATION

PARK INN – THE EMERGING BRAND

ROOMS BY BRAND - 30 SEPTEMBER 2008

23,000 rooms

UNDER DEVELOPMENT 34%

72% 27% 1% OTHERS

NOTE: % based on number of rooms

60% 34% 6% OTHERS

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NOTE: % based on number of rooms NO: Nordics; ROWE: Rest of Western Europe; EE: Eastern Europe; MEAO: Middle East, Africa & Others

SEIZING OPPORTUNITIES IN EMERGING MARKETS

ROOMS BY REGION - 30 SEPTEMBER 2008

52,000 rooms

IN OPERATION

23,000 rooms

UNDER DEVELOPMENT

18% EE 47% ROWE 24% NO

34%

11% MEAO 31% EE 27% ROWE 9% NO 33% MEAO

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(12) 22% FRANCHISED 30% LEASED 48% MANAGED

NOTE: % based on number of rooms

MANAGING THE RISK

ROOMS BY CONTRACT TYPE - 30 SEPTEMBER 2008

52,000 rooms

IN OPERATION

23,000 rooms

UNDER DEVELOPMENT

5% FRANCHISED 14% LEASED 81% MANAGED

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FINANCE

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CHANGE IN MARKET TREND IN Q308

REVPAR GROWTH IN EUR

7.1%

  • 1.0%
  • 2.0%
  • 6.7%

5.6% 1.6% 9.4% 11.3%

NO ROWE EE ME

H108 Q308

SOURCE: STR Global NOTE: Eastern Europe Mid-Market excludes Russia & CIS (no data available)

FIRST CLASS MID-MARKET

6.2%

  • 1.6%
  • 0.9%
  • 5.3%

3.0%

  • 6.7%

6.7% 11.7%

NO ROWE EE ME

H108 Q308

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REVPAR DEVELOPMENT BY BRAND

L/L REVPAR PER BRAND

  • 0.4%

0.4%

  • 0.2%

VAR 80.9 50.1 89.6 YTD08 76.8 47.7 84.8 YTD07 81.4 55.4 89.0 Q308 81.7 55.2 89.2 Q307 5.3% 5.0% 5.7% VAR IN EUR

NOTE: Like-for-like (L/L): same hotels in operation during the previous period compared at constant exchange rates

TOTAL REVPAR PER BRAND

  • 6.9%
  • 8.9%
  • 5.5%

VAR 76.0 47.3 85.0 YTD08 76.6 48.2 84.5 YTD07 75.7 50.3 83.7 Q308 81.3 55.2 88.6 Q307

  • 0.8%
  • 1.9%

0.6% VAR IN EUR

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L/L REVPAR & REVENUE DEVELOPMENT

YTD08 Q308 REVPAR ANALYSIS

  • 6.9%
  • 2.7%
  • 3.8%
  • 0.4%
  • 0.8%
  • 2.3%
  • 3.8%

5.3% L/L GROWTH REPORTED REVPAR GROWTH NEW OPENINGS FX IMPACT YTD08 Q308 REVENUE ANALYSIS

  • 4.3%

2.5%

  • 3.6%
  • 3.2%

3.4% 2.0%

  • 2.8%

4.2% L/L REVENUE REPORTED REVENUE GROWTH NEW OPENINGS FX IMPACT

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73 71 69 59 61 67 72 77 20 30 40 50 60 70 80 2000 2001 2002 2003 2004 2005 2006 2007

REVPAR FOR EBITDA BREAK-EVEN

AND SENSITIVITY

EUR

40% buffer EBITDA break-even point at EUR 55

NOTE: Leased and managed hotels

  • RevPAR for EBITDA break-even expected at ca EUR 55
  • EUR 1 change in RevPAR expected to impact EBITDA

by ca MEUR 5-6 on an annual basis

* Rezidor introduced the Park Inn brand in Europe in Jan. 2003

*

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(18) 210 bps 10 bps 170 bps

  • 270 bps

210 bps VAR 30.2% 1.8% 20.1% 35.0% 26.4% YTD08 29.6% 1.8% 21.4% 33.8% 26.8% YTD07 0 bps 1.9% 2.0% PROPERTY INSURANCE & TAX 3) 30.6% 18.7% 35.4% 28.8% Q308 28.5% 20.4% 32.7% 30.9% Q307 60 bps RENT 3) 130 bps OTHER OPERATING EXPENSES 2)

  • 120 bps

PERSONNEL COSTS 2) 40 bps F&B 1) VAR

  • 30%
  • 250 bps
  • 50 bps
  • 33%
  • 23%
  • 5%
  • 4%

VAR 0.17 9.7% 35.8% 24.9 57.3 211.6 591.3 YTD08 0.19 10.2% 35.6% 29.0 58.1 203.7 571.9 YTD07 0.07 10.4% 36.8% 10.1 20.0 70.8 192.5 Q308 0.10 12.9% 37.3% 15.1 25.9 74.9 201.0 Q307

  • 11%

EPS (EUR)

  • 50 bps

EBITDA Margin % 20 bps EBITDAR Margin %

  • 14%

PROFIT AFTER TAX

  • 1%

EBITDA 4% EBITDAR 3% OPERATING REVENUE VAR IN MEUR

1) % of F&B Revenue 2) % of Total Revenue 3) % of Leased Hotel Revenue

INCOME STATEMENT HIGHLIGHTS

NOTE 1: % of F&B Revenue NOTE 2: % of Operating Revenue NOTE 3: % of Leased Hotel revenue

COST RATIOS

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(19) 571.9 10.5 57.7 503.7 YTD07

  • 4%
  • 30%
  • 5%
  • 4%

VAR 591.3 7.7 61.8 521.8 YTD08 3%

  • 27%

7% 4% VAR 201.0 192.5 TOTAL REVENUE 3.3 2.3 OTHER 21.9 20.7 FEE 175.7 169.5 LEASED Q307 Q308 IN MEUR

3 4 8 9 7 6 3 3

NO ROWE EE ME

Q308 Q307

REVENUE SEGMENTATION

FEE Q308 LEASED Q308 LEASED YTD08 FEE YTD08

81 82 89 94 NO ROWE

Q308 Q307 9 10 24 23 19 17 9 9

NO ROWE EE ME

YTD08 YTD07

254 234 268 270 NO ROWE

YTD08 YTD07

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(20) 58.1

  • 31.3

89.4 6.0 39.8 43.6 YTD07

  • 23%
  • 4%
  • 17%

400%

  • 14%
  • 35%

VAR 57.3

  • 33.0

90.3 4.7 40.1 45.5 YTD08 20.0

  • 11.0

30.9 3.5 14.7 12.7 Q308 25.9

  • 11.4

37.3 0.7 17.1 19.5 Q307 1% EBITDA BEFORE CENTRAL COSTS 5% CENTRAL COSTS

  • 1%

TOTAL EBITDA

  • 22%

OTHER 1% FEE 4% LEASED VAR IN MEUR

EBITDA SEGMENTATION

Like-for-like: same hotels in operation during the previous period compared

LEASED Q308 LEASED YTD08 FEE Q308 FEE YTD08

14 16

  • 1

4 NO ROWE

Q308 Q307 2 2 5 8 5 5 2 2

NO ROWE EE ME

Q308 Q307

42 38 4 6 NO ROWE

YTD08 YTD07 7 7 13 14 13 13 7 6

NO ROWE EE ME

YTD08 YTD07

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EBITDA MARGIN SEGMENTATION

10.2% 68.9% 8.7% YTD07

  • 250 bps
  • 700 bps
  • 360 bps

VAR 9.7% 64.9% 8.7% YTD08 10.4% 71.2% 7.5% Q308 12.9% 78.2% 11.1% Q307

  • 50 bps

TOTAL EBITDA MARGIN

  • 400 bps

FEE 0 bps LEASED VAR IN MEUR LEASED Q308 FEE Q308 LEASED YTD08 FEE YTD08

17% 19%

  • 1%

4% NO ROWE

Q308 Q307 79% 59% 66% 84% 68% 80%84%81%

NO ROWE EE ME

Q308 Q307

17% 16% 2% 2% NO ROWE

YTD08 YTD07 71%71% 53% 61% 71%75%77%76%

NO ROWE EE ME

YTD08 YTD07

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BALANCE SHEET HIGHLIGHTS

48 47 NET CASH 46 23 INVESTMENTS IN INTANGIBLE & TANGIBLE ASSETS (during the period) IN MEUR 30 SEP 2008 31 DEC 2007 TOTAL EQUITY 198 201 BALANCE SHEET TOTAL 401 413

LIQUIDITY HIGHLIGHTS

51 28 CASH & EQUIVALENTS 96 119 UNUTILISED OVERDRAFTS IN MEUR 30 SEP 2008 31 DEC 2007 TOTAL AVAILABLE LIQUIDITY 147 147

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HEDGING FOR TURBULENCE

  • Shift in business model

– More fee based revenue – Contracts with financial commitments less frequent – Faster ramp-ups and focus on conversions

  • Strengthened foothold in emerging

markets

– 40% of portfolio

  • A multi-brand portfolio

– ca 220 Radisson SAS – ca 120 Park Inn

  • Downside capped

MEUR 20 12 8 COST SAVINGS TOTAL FIXED COSTS REDUCTION PURCHASING CONTRACTS

  • Cost saving program

– Annual cost savings of MEUR 20 with full effect as of H209

  • CAPEX flexibility
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OUTLOOK & FINANCIAL TARGETS

FINANCIAL TARGETS OUTLOOK

  • Continued uncertainties surrounding

the global economy.

  • Rising contribution from hotels in their

ramp up phase and gradual shift in business model to support our EBITDA margin. Approximately one third of annual after-tax income to be distributed to shareholders Dividend Policy Pipeline: 23,000 rooms Expansion Small positive average net cash position Balance Sheet EBITDA margin of 12% over a business cycle Profitability Target

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Q&A