Occupancy recovery and tight cost control improve cash flow in Q1

Brussels, Belgium | April 16, 2010

Comment from the CEO: "Occupancy levels improved across our key markets, with significant recovery in Germany outperforming all geographic segments. Continued pressure on room rates however resulted in a flat RevPAR development for Rezidor in the first quarter. Although EBITDA and cash flow marked an improvement, given the low visibility, we continue to focus on tight cost control and maintaining the reduced level of fixed costs. Cash and margin protection remain the top priorities for 2010.

"A definite event worth noting for Rezidor was the sale of its Regent business this week. The deal will have a positive impact on annual cash flow and net profit, and will also free up resources to improve Rezidor's operations and accelerate the expansion of its core brands." -- Kurt Ritter, President & CEO.

First quarter, 2010

  • RevPAR like-for-like decreased by 0.1% to EUR 54.6 (54.7). Like-for-like occupancy was 56.3% (53.2).

  • Revenue increased by 8.6% or MEUR 13.1 to MEUR 165.7 (152.6). On a like-for-like basis Revenue was flat.

  • EBITDA was MEUR -11.5 (-14.9), and EBITDA margin was -6.9% (-9.8).

  • Loss after tax amounted to MEUR -17.7 (-19.2).

  • Basic and diluted Earnings Per Share amounted to EUR -0.12(-0.13).

  • Cash flow from operating activities amounted to MEUR -17.5(-21.3). Total available cash at the end of the quarter, including unutilised credit facilities, amounted to MEUR 73.0 (95.0 inMarch 09).

    Other developments

  • Rezidor opened ca 600 rooms in the first quarter, of which 78% were managed or franchised. Ca 500 rooms left the system.

  • Rezidor signed 8 contracts for new hotels in the first quarter representing ca 1,500 rooms. 100% of the new rooms contracted were managed or franchised.

  • In April 2010 the signing a master purchase agreement with affiliates of Carlson Hospitality Group, Inc. and Formosa International Hotels Corporation for the sale of the Regent business was announced. Rezidor's share of the transaction proceeds amounts to a cash consideration of approximately MEUR 9.5. The sale of this part of Rezidor's business will have an annual positiveeffect of MEUR 2-3 on EBITDA.

    The full report is available on www.investor.rezidor.com.

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