Q3-2013 Results Wolfgang M. Neumann, President & CEO Knut - PowerPoint PPT Presentation

Q3-2013 Results Wolfgang M. Neumann, President & CEO Knut Kleiven, Deputy President & CFO October 22, Sochi Radisson Blu Resort & Congress Centre, Sochi /

In Sochi since 1993; portfolio of 7 hotels in one of Russia's most dynamic destinations  Sochi : Winter Olympics in Feb 2014; venue of Formula 1 Grand Prix 2014 and FIFA world cup 2018; Russia’s largest resort/beach destination; significant infrastructure investment, promising MICE destination Rezidor in Sochi Hotels Rooms In operation 4 1,200 In pipeline 3 870  Russia : Lack of international branded supply in key cities, favorable economic outlook, significant growth driver; represents 20% of pipeline Rezidor in Russia Hotels Rooms In operation 22 6,900 In pipeline 21 5,200 2 / Q3-2013 Results

Q3-2013: higher market share and profitability RevPAR • L/L RevPAR growth of 5.9%, driven by both occupancy and rate +5.9% (L/L) • Reported RevPAR growth of 0.8%, negatively impacted by the strengthening of the Euro • Market share (RGI) up 2.3% August YTD 10% EBITDA Margin • Strict cost control and the 2012 terminations of unprofitable leases +2.6pp led to solid conversion of revenue to EBITDA • EBITDA up MEUR 5 to MEUR 23 and margin up by 2.6pp to 10.0%. € 23m • EBIT up MEUR 7 to MEUR 15 and margin up by 3.1pp to 6.7% EBITDA + € 5m • Cash Flow from operating activities up by MEUR 17 YTD • New Asset Management transaction in October € 15m EBIT • Rezidor and Formosa have mutually agreed to end the alliance + € 7m agreement for Regent 3 / Q3-2013 Results

L/L RevPAR improvement of 5.9% driven by both occupancy and rate growth L/L Occupancy L/L Average Room Rate L/L RevPAR 10% 8% 6.5% 5.7% 5.9% 5.9% 6.0% 5.6% 6% 4.6% 4.2% 3.0% 4% 3.2% 2.3% 2% 0% -2% 4 / Q3-2013 Results

Emerging Markets driving RevPAR led by Russia, the Baltics, South Africa and UAE NORDICS REST OF WESTERN EUROPE L/L Occupancy L/L Average Room Rate L/L RevPAR L/L Occupancy L/L Average Room Rate L/L RevPAR 25% 25% 15% 15% 8.8% 3.4% 4.8% 3.1% 3.8% 0.7% 1.2% 4.2% 5% 3.6% 1.8% 0.8% 5% 2.0% 2.2% 1.7% -5% -5% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2012 2013 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 25% 25% 20.5% 17.1% 12.2% 10.8% 13.5% 13.0% 15% 15% 11.9% 8.4% 7.9% 7.8% 6.1% 5.7% 4.0% 1.2% 5% 5% -5% -5% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2012 2013 2012 2013 5 / Q3-2013 Results

Margin improvement on track in pursuit of Route 2015 objectives EBITDAR, MEUR / EBITDAR margin, % EBITDAR margin: EBITDAR, MEUR EBITDAR margin %, Rolling 12-months • Route 2015 gaining momentum 120 35% • Solid progression since Q3-2011 100 34% 80 33% • 3 rd party benchmark confirms a leading 60 32% EBITDAR margin 40 31% 20 30% EBITDA margin : 0 29% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2011 2012 2013 • Steady increase since Q4-2011 EBITDA, MEUR / EBITDA margin, % • Margin target of 10-12% remains EBITDA, MEUR EBITDA margin %, Rolling 12-months • Cost optimisation program yields the 40 8% targeted saving objectives 30 6% • Revenue optimisation in close 20 cooperation with Carlson and Asset 10 4% Management are the key drivers 0 2% -10 0% -20 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2011 2012 2013 6 / Q3-2013 Results

Asset Management contributes more than MEUR 5 on the EBITDA improvement in 2013 In MEUR Exit Fee Revenue Impact 2013 EBITDA Impact 11.5 14.8 1.9 Exit from seven leases in France 0.9 10.2 0.9 Exit from two leases in Sweden - 1.0 0.9 Exit from a committed management contract Contract extensions, renovation/restructuring 0.5 - 0.2 two leases in ROWE Rent restructuring one lease in ROWE - - 1.0 Total 12.4 26.2 5.2 • EBITDA margin impact of 0.7% from above listed Asset Management deals • Further progress expected in Q4 7 / Q3-2013 Results

Q3 signings emphasize strategic focus on emerging markets Park Inn Pulkovo Airport, St. Petersburg Q3 Q3 YTD YTD SIGNINGS 2013 2012 2013 2012 Hotels 8 9 24 26 Rooms 1,400 2,000 4,300 5,900 2 strategic Q3 2013 Radisson Blu Hotel Algiers Hydra, Algeria 100% 100% > 60 60 % extensions Radisson in Copenhagen Emerging Fee-based with conversion Markets Blu from managed to leased Q3 comments: Radisson Blu Hotel, Istanbul Tuzla • First hotel in Algeria with the Radisson Blu Algiers Hydra • Key Focus Countries: Saudi Arabia, Turkey and Russia 8 / Q3-2013 Results

Lower Q3 openings but our pipeline remains strong Q3 Q3 YTD YTD Park Inn by Radisson Astana, Kazakhstan OPENINGS 2013 2012 2013 2012 Hotels 2 4 10 13 Rooms 560 640 2,300 2,900 Q3 2013 >90% >90% >55% Emerging Fee based Radisson Markets Blu Radisson Blu Resort & Thalasso, Hammamet, Tunisia Q3 comments: • Park Inn by Radisson Astana, Kazakhstan • Radisson Blu Resort & Thalasso, Hammamet, Tunisia 9 / Q3-2013 Results

Selected Future Openings (2013-2014) Radisson Blu Rooms Park Inn by Radisson Rooms Göttingen, Germany 114 Istanbul Tuzla, Turkey 249 Petrozavodsk, Russia 180 Sochi, Russia 508 Yaroslavl, Russia 167 Istanbul Şişli , Turkey 291 Pulkovo Airport St Petersburg, Russia 200 Okoume Palace Libreville, Gabon 180 Lund, Sweden 190 Mammy Yoko Freetown, Sierra Leone 171 Chelyabinsk, Russia 211 Libreville, Gabon 140 Abeokuta, Nigeria 173 Oslo Alna, Norway 142 Istanbul Ataturk Airport, Turkey 144 Sheremetyevo Airport Moscow, Russia 391 Troyitska Kyiv, Ukraine 199 Sohar, Oman 179 Oslo Alna, Norway 206 Belgrade, Serbia 237 • Balanced openings between the brands • Continued focus on Emerging Markets & key focus countries (Turkey, Russia) • Only management and franchise contracts /

Financial Update Knut Kleiven, Deputy President & CFO Radisson Blu Hotel, Istanbul Pera /

Strong improvement in profitability Q3 Q3 YTD YTD MEUR Q3 Highlights: 2013 2012 2013 2012 -10 MEUR in revenue : Revenue 227.4 237.3 683.5 683.1 • Negative FX impact and exit of 9 leases EBITDAR 81.7 81.3 237.4 222.0 +1.6pp in EBITDAR margin: • Cost reduction launched in Q3 2012 EBITDAR Margin 35.9% 34.3% 34.7% 32.5% +2.6pp in EBITDA margin: • EBITDA 22.8 17.6 54.9 35.3 Exit of 9 leases • Rent adjustment and provisions from EBITDA Margin 10.0% 7.4% 8.0% 5.2% one onerous contract in Q3 2012 • FX impact EBIT 15.1 8.6 31.3 7.8 +3.1pp EBIT margin: • Lower write-downs of fixed assets in EBIT Margin 6.7% 3.6% 4.6% 1.1% 2013 vs 2012 Tax -5.3 -3.8 -14.3 -10.9 • High tax rate due to losses which are not capitalized NET RESULTS 9.7 4.4 15.9 -3.5 12 / Q3-2013 Results

Healthy flow through in the L/L portfolio Change in Q3-2013 vs Reported Hotel New One-offs L/L FX Marketing Q3-2012 Change Exits Hotels 2012 Net Spend Revenue -9.9 -9.3 -7.7 2.4 - 0.4 4.3 EBITDAR 0.5 -3.4 -1.7 1.1 0.9 -0.5 4.1 EBITDA 5.3 -1.0 0.0 1.0 3.3 -0.5 2.5 EBIT 6.5 -0.6 0.2 1.1 4.1 -0.5 2.2 YTD-2013 vs YTD-2012 Revenue 0.4 -9.5 -19.4 7.3 - 2.0 20.0 EBITDAR 15.4 -3.4 -3.3 2.0 3.2 2.5 14.4 EBITDA 19.6 -1.0 2.3 1.3 5.3 2.5 9.2 EBIT 23.5 -0.6 2.5 1.3 8.8 2.5 9.0 Q3 comments: • FX had a negative impact of MEUR 9.3 on revenue and MEUR 1.0 on EBITDA • Hotel exits had a negative impact on revenue, but a small positive impact on EBIT • One-offs in 2012 relate to a rent adjustment, consultancy costs and a provision for an onerous management contract. Furthermore, write-downs of fixed assets were MEUR 0.8 higher in Q3 2012 compared to Q2 2013 13 / Q3-2013 Results

Q3 Leased Business Substantial EBIT improvement with ROWE turning positive Leased Revenue, MEUR 250 Nordics : 200 • Revenue down due to FX and 2 leases 150 converted to franchise contracts Q3 2013 • 100 EBIT margin up 1.7 pp to 6.9% mainly Q3 2012 explained by a MEUR 1.7 rent adjustment 50 in 2012 0 NO RoWE Total EBIT, MEUR 8 Rest of Western Europe: 6 • Revenue down due to FX and the exit of 4 7 leases Q3 2013 2 • EBIT margin up 1.9 pp to 0.3%, due to Q3 2012 exits and lower write-downs compared to 0 NO RoWE Total 2012 -2 -4 14 / Q3-2013 Results

Q3 Fee Business Solid performance despite negative FX impact Fee Revenue, MEUR 35 30 Eastern Europe: 25 • Fee revenue down due to FX, one 20 hotel switching to a franchise contract Q3 2013 15 • Q3 2012 EBIT margin down by 7.7 pp to 68.6% 10 due to FX and increased provisions for 5 bad debt 0 NO RoWE EE MEAO Total EBIT, MEUR 20 15 Middle East, Africa & Others: • Q3 2013 Fee revenue up due to new hotels and 10 Q3 2012 a positive RevPAR improvement 5 • EBIT margin up by 3.4 pp to 64.9% 0 NO RoWE EE MEAO Total 15 / Q3-2013 Results