PR Newswire/Les Echos/
Press release - Quarterly information
August 28, 2013
A 2013 First-Half of Changes
to Drive the Group's Transformation and Performance
* Revenue up 1.8% like-for-like(1) to EUR2,694 million
* EBIT down 6.4% like-for-like to EUR198 million
* Operating profit before tax and non-recurring items down 14.7% like-for-like
to EUR148 million
* Net profit of EUR34 million, versus a net loss of EUR532 million in
* Asset management program: a EUR248 million reduction in adjusted net debt
already secured as of August 28
* Full year EBIT target of EUR510-530 million
For the first six months of 2013, Accor experienced:
* The implementation of transformation measures to consolidate the Group's
- Strategic initiatives in distribution and loyalty programs, in line with the
Group's digital plan
- The launch of the EUR100 million 201 3-2014 cost-savings plan, whose effects
in 2013 will mainly be tangible in the second half
- The creation of the new Asset & Investments Department
- The introduction of a new organization by brand in Europe
* Solid business performance
- Good revenue growth in every segment and in key markets, shaped by the sharp
15.9% rise in revenue from management and franchise fees
- Stable operating performance in a complex environment
- Funds from operations of EUR212 million
- The opening of 9,940 new rooms, 80% of which under asset-light structures
- The issue in March of a EUR600-million in six-year, 2.5% bond
(1) At constant scope of consolidation and exchange rates
(in EUR millions) H1 2012 H1 2013 % change % change
Revenue 2,717 2,694 -0.9% +1.8%
EBITDAR(2) 835 817 -2.2% -0.4%
EBITDAR margin 30.7% 30.3% -0.4 pt -0.6 pt
EBIT 212 198 -6.6% -6.4%
before tax and
items 190 148 -22.0% -14.7%
operations 80 33 N/A N/A
operations (612) (1) N/A N/A
Group share (532) 34 N/A N/A
(1) At constant scope of consolidation and exchange rates
(2) Earnings before interest, taxes, depreciation, amortization and rental
Consolidated revenue for the six months ended June 30, 2013 totaled EUR2,694
million, down 0.9% year-on-year on a reported basis and up 1.8% like-for-like.
In particular, the period saw a robust 15.9% growth in revenue from management
and franchise fees.
Supported by a favorable second-quarter calendar of events, revenue in the
first-half was led by resilient business levels in Europe, both in large cities
and provinces, and by robust business in emerging markets.
In the first six months 9,940 new rooms (77 hotels) were opened, including:
- 80%(2) under management contracts and franchise agreements.
- 51% in Europe and 27% in the Asia-Pacific region.
* Performance in Upscale & Midscale Hotels dampened by distribution costs
Revenue in the Upscale & Midscale Hotels segment declined by 1.7% as reported in
the first half, but rose by 2.3% like-for-like, with RevPAR lifted by occupancy
The segment's EBITDAR margin stood at 4.3%, down 1.1 points as reported and 1.5
points like-for-like. Results were particularly good in Africa-Middle East, the
United Kingdom and Germany, while the cost-cutting measures undertaken in
Southern Europe are beginning to produce effects. Conversely, Poland and
Australia were impacted by high prior-year comparatives. Moreover, additional
outlays were allocated to distribution during the period, as part of the Group's
* Satisfactory performance in Economy Hotels
Revenue from Economy Hotels held firm over the first half, declining 0.5%
year-on-year as reported and increasing 0.5% like-for-like.
EBITDAR margin came to 12.1%, down a slight 0.6 point as reported and 0.5 point
like-for-like. The segment demonstrated further satisfactory resilience in a
mixed environment in continental Europe and given the sharply lower demand in
Australia's mining regions. Also, despite the decline in occupancy rates during
the period, room rates continued to rise, offering some margin protection.
(2) In number of rooms.
Net profit of EUR34 million
In a complex environment, consolidated EBITDAR(3) was stable at EUR817 million,
down 2.2% as reported and 0.4% like-for-like. EBITDAR margin came to 30.3%,
compared with 30.7% a year earlier.
EBIT amounted to EUR198 million for the period, versus EUR212 million in
first-half 2012. The Group's transformation is keeping rents, depreciation and
amortization and provisions under control.
Operating profit before tax and non-recurring items totaled EUR148 million,
versus EUR190 million in first-half 2012, representing a like-for-like decrease
of 14.7%. Two new bond issues launched in June 2012 and March 2013, at
historically low interest rates, temporarily weighed on the financial result
(EUR48 million at June 30, 2013 versus EUR29 million in the prior-year period).
A total of EUR396 million was redeemed in May 2013, thereby reducing the
average cost of debt by one point to 4.5%.
In all, net profit for the period was EUR34 million, versus a net loss of
EUR532 million in first-half 2012, which was impacted by the disposal of
Adjusted funds from operations ended the period at EUR293 million. Recurring
expansion capex amounted to EUR97 million while renovation and maintenance
capex totaled EUR81 million.
Funds from operations stood at EUR212 million and recurring free cash flow,
after recurring expansion capex, came to EUR115 million.
Net debt amounted to EUR581 million at June 30, 2013, up EUR160 million from a
year earlier, with a EUR155 million positive impact from asset disposals and
the EUR185 million negative impact of refunding the "précompte" distribution
Consolidated return on capital employed (ROCE) came to 13.6% at June 30, 2013,
reflecting the temporary increase in capital employed attributable to the
Mirvac and Posadas acquisitions and the deployment of the ibis megabrand
project. For the same reason, ROCE stood at 10.8% in the Upscale & Midscale
segment and 18.3% in the Economy segment.
As of June 30, 2013, Accor had EUR1.5 billion in unused, confirmed long-term
lines of credit.
The 2013-2016 strategic plan
* Asset management
A total of 24 hotels were restructured in first-half 2013, including 13 leased
hotels and 11 owned hotels. These transactions had the effect of reducing
adjusted net debt by EUR184 million.
As of August 28, 2013, the transactions already secured for the year will
reduce adjusted net debt by EUR248 million, thanks to the ongoing deployment
of the asset management program.
The 2013-2016 expansion plan is well on track, with 117,700 rooms in the
pipeline as of June 30, 2013, of which 84% under management and franchise
contracts, 50% in the Asia-Pacific region and 47% in the "ibis fam ily".
(3) Earnings before interest, taxes, depreciation, amortization and rental
Outlook for 2013
* Summer business trends
In July, RevPAR(4) net of tax rose by 2.8% like-for-like in the Upscale &
Midscale Hotels segment and by 2.1% like-for-like in Economy Hotels. This was
in line with the first-half performance, in particular in the Upscale &
Business levels have remained robust during the summer, in a trend that is
expected to continue over the second half of the year.
* 2013-2014 cost-savings plan
The EUR100-million cost-savings plan announced last February was launched during
the first half. It is built on four pillars:
- A voluntary departures plan for the Paris head offices.
- Streamlining of European head offices.
- Prioritization and strategic review of projects.
- Hotel operating costs reduction.
Most of the plan's impact in 2013 will be effective in the second half.
* Full year EBIT target
Following the first-half launch of the cost-savings plan and the distribution
investment plan, Accor is ready to pursue its transformation and drive faster
Based on these factors, the EBIT target for the year stands at between EUR510
million and EUR530 million, compared with the EUR526 million reported in 2012.
Upcoming event - October 17, 2013: Third-quarter 2013 revenue
The financial statements for the six months ended June 30, 2013 were approved
by the Accor Board of Directors at its meeting on August 27, 2013. The Group's
statutory auditors have conducted a limited review of these financial
statements and their report will be issued shortly.
Accor, the world's leading hotel operator and market leader in Europe, is
present in 92 countries with more than 3,500 hotels and 450,000 rooms. Accor's
broad portfolio of hotel brands - Sofitel, Pullman, MGallery, Grand Mercure,
Novotel, Suite Novotel, Mercure, Adagio, ibis, ibis Styles, ibis budget and
hotelF1 - provide an extensive offer from luxury to budget. With more than
160,000 employees in Accor brand hotels worldwide, the Group offers its clients
and partners 45 years of know-how and expertise.
Charlotte Bourgeois-Cleary Elodie Woillez
Vice President, Media Relations Phone: +33 (0)1 45 38 87 08
Phone: +33 (0)1 45 38 84 84
INVESTOR AND ANALYST RELATIONS
Sébastien Valentin Léa Ledermann
Vice President, Investor Relations Investor Relations
and Financial Communication Phone: +33 (0)1 45 38 86 36
Phone: +33 (0)1 45 38 86 25
(4) Owned or leased hotels only
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-0- Aug/28/2013 07:35 GMT
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