The Rezidor Hotel Group's 2011 Fourth Quarter Report - revenue growth and EBITDA improvement, supported by new hotels

Brussels | February 22, 2012

“The hotel market continued to improve in the last quarter of the year. Eastern Europe consistently showed very strong RevPAR growth and the negative trend in the Middle East and North Africa slowed down. However, the deceleration in Western Europe, caused by the instability in the Euro zone, continued during the last three months of the year and remains a concern for the future. As a result, our L/L RevPAR grew by 3.2%, a small improvement on the previous quarter.

Our revenue increased by a healthy 6% in Q4, with almost all of this growth coming from newly opened leased hotels. The new leases, mainly located in the Nordics, performed above expectations and contributed positively to our EBITDA and EBITDA margin. The margin growth was also helped by additional high-margin fee revenue and one-offs in the fourth quarter of last year. Our net result was, however, negatively affected by write-downs of fixed and deferred tax assets relating to our leased hotels in Western Europe, mainly in the UK.  These write-downs were the result of revised GDP expectations for the UK and the Euro zone, and also stemmed from a review of our portfolio following a decision to intensify the focus on asset management. At the end of the year, we established a separate Asset Management department to further optimise our current portfolio of leased hotels in terms of increasing profitability and reducing the leverage of the company.

Looking ahead, we will focus on improving profitability, both in absolute terms and relative to the industry. In December, we announced our ‘Route 2015’ strategy – a raft of initiatives to improve our EBITDA margin by 6 to 8 percentage points by 2015, assuming that market RevPAR growth covers inflation. We aim to achieve this mainly by putting stronger emphasis on revenue generation, together with our partner and brand owner Carlson, through greater and more aligned global synergies. To facilitate this ambition, in January 2012, Carlson and Rezidor announced their collaboration to jointly go to the market and do business together as the ‘Carlson Rezidor Hotel Group’”.

Kurt Ritter
President and Chief Executive Officer
The Rezidor Hotel Group

Fourth quarter, 2011

  • RevPAR Like-for-like increased by 3.2% to EUR 62.3 (60.3). Like-for-like Occupancy was 61.3% (61.2)
  • Revenue increased by 6.6% or MEUR 13.9 to MEUR 225.6 (211.7). On a Like-for-like basis Revenue decreased by 0.5%
  • EBITDA was MEUR 14.1 (6.9), and EBITDA margin was 6.3% (3.3)
  • Loss after tax amounted to MEUR -13.5 (-6.8), negatively impacted by a MEUR 9.9 write-down of fixed assets and a MEUR 8.5 write-down of deferred tax assets
  • Basic and diluted Earnings Per Share amounted to EUR -0.09 (-0.05)

Twelve month ending December, 2011

  • RevPAR Like-for-like increased by 3.7% to EUR 65.4 (63.1). Like-for-like Occupancy was 63.9% (63.6)
  • Revenue increased by 10.0% or MEUR 78.5 to MEUR 864.2 (785.7). On a Like-for-like basis Revenue was unchanged
  • EBITDA was MEUR 35.1 (31.5), and EBITDA margin was 4.1% (4.0)
  • Loss after tax amounted to MEUR -11.9 (-2.7)
  • Basic and diluted Earnings Per Share amounted to EUR -0.08 (-0.02)
  • Cash flow from operating activities was 14.1 (47.6). Total available cash at the end of the period, including unutilised credit facilities, amounted to MEUR 104.8 (MEUR 129.3 in Dec 2010)

Other developments

  • A write-down of fixed assets of MEUR 9.9 combined with a MEUR 8.5 write-down of deferred tax assets was recognised in the quarter, as a result of lowered market growth expectations following an intensified asset management review in light of the continuing financial uncertainty
  • Circa 1,600 new rooms were added into operations in the fourth quarter and ca 5,800 during the year
  • Circa 3,200 rooms were signed in the fourth quarter and ca 9,600 during the year. All of the new rooms signed during the year were managed or franchised
  • The Board of Directors proposes no dividend (EUR 0)

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