Hyatt Hotels Corporation · NYSE:H
Hyatt Hotels — Q4 2017 Earnings Presentation
33 slides from Hyatt Hotels's earnings presentation, Feb 15, 2018
Slide 1: 4Q'17 Earnings Call Supplemental Investor Presentation
4Q’17 Earnings CALL Supplemental INVESTOR Presentation February 15, 2018 Exhibit 99.1
Slide 2: Forward-Looking Statements
Forward-Looking Statements Forward-Looking Statements in this presentation, which are not historical facts, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include statements about our plans, strategies, outlook, occupancy,
Slide 3: Overview
Overview Strong Performance in 2017 Well Positioned for Long-Term Growth Executing Capital Strategy with Discipline Solid Outlook for 2018
Slide 4: 2017 Results At A Glance
$448M 2.5% $785M 2017 Results At A Glance Net Income attributable to Hyatt Comparable Systemwide RevPAR Adjusted EBITDA† Total Management & Franchise Fees 2016 2017 $204M $249M Growth 22.3% $816M $505M 3.3% New Hotel Openings 59 71 Total Managed & Franchised Rooms 174K 186K 7.0% Share Repurchases $2
Slide 5: Adjusted EBITDA Grew 7%, After Adjustments
Full-Year Adjusted EBITDA† ($ millions) Growth, after adjustments (compared to 2016) Adjusted EBITDA† Grew 7%, After Adjustments Growth, as reported (compared to 2016) Results do not reflect impact of adoption of new revenue recognition standard in 2018. See appendix for details. +7% +4%
Slide 6: Hyatt Portfolio Has Grown More Than 50% Since IPO
Hyatt Portfolio Has Grown More Than 50% Since IPO ~3.5% CAGR (2008-2012) ~6.3% CAGR (2013-2017) Total rooms do not include vacation ownership, residential or branded spas and fitness studios.
Slide 7: Pipeline Reflects Significant Growth, Diversification
Pipeline Reflects Significant Growth, Diversification Total Managed & Franchised rooms do not include vacation ownership, residential or branded spas and fitness studios.
Slide 8: Fees Have Grown at Double-Digit Pace
Fees Have Grown at Double-Digit Pace 7.8% CAGR 10.8% CAGR Management & Franchise Rooms do not include owned and leased portfolio, vacation ownership, residential or branded spas and fitness studios. Reflects third-party Management & Franchise fees, as reported in our consolidated financial statement
Slide 9: Earnings Continue to Shift from Owned & Leased to Managed & Franchised
Earnings Continue to Shift from Owned & Leased to Managed & Franchised Earnings composition percentages above exclude Corporate & Other and eliminations. Results do not reflect impact of adoption of new revenue recognition standard in 2018. (1) M&F Contribution consists of Americas, EAME / SWA and A
Slide 10: Margins Have Expanded With Favorable SG&A Leverage
Margins Have Expanded With Favorable SG&A Leverage Results do not reflect impact of adoption of new revenue recognition standard in 2018.
Slide 11: Share Repurchases and Public Float
Share Repurchases and Public Float 32% Decline in Shares Outstanding (millions of shares) +10% (46)% (32)% Class A Class B Share Repurchases ($ millions) ~39M Class B Shares Converted to Class A Since 2011, Mitigating Adverse Float Impact of Class A Repurchases Class A float ~40% ~$3.0B total repurc
Slide 12: The House of Hyatt: Integrating Strategy with Execution
The House of Hyatt: Integrating Strategy with Execution CULTIVATE the Best People and Evolve the Culture BUILD & DELIVER Brand-Led Experiences OPERATE with Excellence GROW with Intent OUR MISSION: We deliver distinctive experiences for our guests OUR PURPOSE: To care for people so they can be their
Slide 13: Hyatt's Long-term Growth Strategy
Hyatt’s Long-term Growth Strategy MAXIMIZE OUR CORE BUSINESS High-quality, differentiated brands and experiences which command a premium and increase frequency with consumers [RevPAR Growth] Superior hotel economics which attract owners and drive development [Net Rooms Growth] [Margin expansion] INT
Slide 14: Two Distinct Categories of Asset Dispositions
Two Distinct Categories of Asset Dispositions Absolute EBITDA loss Buyer Interest Permanent Sell-Down Considerations Recycling Considerations Valuation (above-average EBITDA multiple) Ability to replace EBITDA Medium-term asset performance expectations Ability to drive improved property performance
Slide 15: Illustrative $1.5B Asset Disposition Portfolio
Illustrative $1.5B Asset Disposition Portfolio Summary of Illustrative Remaining Portfolio ($ millions) Sale value (pre-tax) ~$1,195 Implied average EBITDA multiple on portfolio ≥ 15x Estimated annual lost Adj. EBITDA (O&L Segment) $60 – $75 Estimated tax impact 10% – 15% Estimated net proceeds (aft
Slide 16: Criteria for Growth Investments
Criteria for Growth Investments STRATEGIC OBJECTIVES Expand brand portfolio within existing higher-end chain scales [Luxury, Upper Upscale, and Upscale] Expand geographic footprint Enhance the guest experience Expand distribution capabilities FINANCIAL OBJECTIVES Sizable acquisitions to replace lost
Slide 17: Illustrative Impact of Capital Strategy on Earnings Mix
Illustrative Impact of Capital Strategy on Earnings Mix Adjusted EBITDA† by Business Mix Earnings composition percentages above exclude Corporate & Other and eliminations. Expected business mix in 2020 assumes successful completion of $1.5 billion disposition plan and some level of reinvestment of d
Slide 18: High Single-Digit, Low Double-Digit Earnings Growth Model
High Single-Digit, Low Double-Digit Earnings Growth Model Illustrative Adjusted EBITDA† Growth Model (2018-2020F) (in percentage points of Total Adjusted EBITDA†) +6% to 7% Net Rooms Growth 2% - 6% 1 pt. of Systemwide RevPAR Growth = Estimated Growth of $10M–$20M in Total Adjusted EBITDA† Model does
Slide 19: 2018 Outlook
1% ~$300M ~$350M $805M 2018 Outlook Net Income attributable to Hyatt Adjusted SG&A† Capital Expenditures Adjusted EBITDA† Comparable Systemwide RevPAR Low Case High Case $176M $215M $825M 3% Effective Tax Rate 31% 27% Total Shareholder Returns At least $300M Total Managed & Franchised rooms do not i
Slide 20: Expected Adjusted EBITDA Growth of 7%-10% After Adjustments
Expected Adjusted EBITDA† Growth of 7%-10% After Adjustments Note: Range of $805M–$825M excludes estimated $25M and $31M of adverse revenue recognition impact in 2017 and 2018, respectively, as it relates to deferred gains. The Company’s forecasts are based on a number of assumptions that are subjec
Slide 21: Impact of U.S. Tax Reform
Impact of U.S. Tax Reform The Company’s forecasts are based on a number of assumptions that are subject to change and many of which are outside the control of the Company. If actual results vary from these assumptions, the Company’s expectations may change. There can be no assurance that the Company
Slide 22: Rooms Growth by Year
Rooms Growth by Year Net Rooms Growth (compared to prior year) 5.7% 7.3% 7.0% ~6.25%(1) ≥7.6% Total Managed & Franchised hotels and rooms do not include vacation ownership, residential or branded spas and fitness studios. Company’s forecasts are based on a number of assumptions that are subject to c
Slide 23: Returns to shareholders expected to be a minimum of $300M in 2018
Returns to shareholders are expected to be a minimum of $300M in 2018 Initiating a quarterly cash dividend of $0.15 per common Class A and Class B share, reflecting a ~0.8% yield at the current stock price Shareholder returns will consist of a mix of common dividends and share buybacks Committed to
Slide 24: Appendix: Non-GAAP Reconciliation
Appendix: Non-GAAP Reconciliation Hyatt Hotels Corporation Definitions; Non-GAAP Financial Measures; Reconciliations of Non-GAAP Financials Measures to U.S. GAAP This presentation includes references to certain financial measures that are not calculated or presented in accordance with United States
Slide 25: Appendix: Non-GAAP Reconciliation (cont.)
Appendix: Non-GAAP Reconciliation (cont.) Adjusted EBITDA Margin We define Adjusted EBITDA margin as Adjusted EBITDA divided by total revenues, net of other revenues from managed and franchised properties. Other revenues from managed and franchised properties reflect reimbursed costs incurred on beh
Slide 26: Appendix: Non-GAAP Reconciliation (cont.)
Appendix: Non-GAAP Reconciliation (cont.) Constant Dollar Currency We report the results of our operations both on an as reported basis, as well as on a constant dollar basis. Constant dollar currency, which is a non-GAAP measure, excludes the effects of movements in foreign currency exchange rates
Slide 27: Appendix: Non-GAAP Reconciliation (cont.)
Appendix: Non-GAAP Reconciliation (cont.)
Slide 28: Appendix: Non-GAAP Reconciliation (cont.)
Appendix: Non-GAAP Reconciliation (cont.) Company’s forecasts are based on a number of assumptions that are subject to change and many of which are outside the control of the Company. If actual results vary from these assumptions, the Company’s expectations may change. There can be no assurance that
Slide 29: Appendix: Non-GAAP Reconciliation (cont.)
Appendix: Non-GAAP Reconciliation (cont.)
Slide 30: Appendix: Non-GAAP Reconciliation (cont.)
Appendix: Non-GAAP Reconciliation (cont.)
Slide 31: Appendix: Non-GAAP Reconciliation (cont.)
Appendix: Non-GAAP Reconciliation (cont.) 31
Slide 32: Appendix: Non-GAAP Reconciliation (cont.)
Appendix: Non-GAAP Reconciliation (cont.)
Slide 33: Hyatt
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