Accor Sa · EURONEXT:AC
Accor Sa — AccorHotels — Investor Day (November 2018)
117 slides from Accor Sa's investor day presentation, Nov 27, 2018
Slide 1: Investor Day
INVESTOR DAY November 27th, 2018
Slide 2: Opening Remarks
Grand Mercure Beijing Dongcheng - China OPENING REMARKS Sébastien Bazin Chairman & CEO ACCORHOTELS | Capital Market Day - November 27, 2018
Slide 3: Travel & Tourism: A Blessed Industry Across All Geographies
TRAVEL & TOURISM: A BLESSED INDUSTRY ACROSS ALL Travel & tourism spending ($bn) GEOGRAPHIES 2018-2022 CAGR +7.0% 7 700 p.a. Western Europe +5% +5.0% 5 900 p.a. Eastern Europe +8% North Am +5% 4 000 Latam +5% Middle East +8% Africa +6% China +11% India +11% 2010 2018 2022 Rest of ASPAC +6% ACCORHOTEL
Slide 4: Travel & Tourism: A Blessed Industry
TRAVEL & TOURISM: A BLESSED INDUSTRY 10.4% 1/10 1.3bn Travel & Tourism GDP Jobs are supported 2017 International outbound As a % of global GDP By Travel & Tourism industry From 300m in the 1980s 4.6% 1/5 4bn Direct Travel & Tourism Jobs created 2017 Air passengers GDP growth in 2017 in the last 10 y
Slide 5: Faster and Faster Changes in the Hospitality World
FASTER AND FASTER CHANGES IN THE HOSPITALITY WORLD Guests looking for choice, Hotel groups continue Adjacent digital players experience, convenience to move into asset light and entering the hospitality market and personalization further invest into growth to create strong ecosystems ACCORHOTELS | C
Slide 6: Players Intertwined Across Hospitality Value Chain
PLAYERS INTERTWINED ACROSS HOSPITALITY VALUE CHAIN Hotels to get on Airbnb Booking and Expedia developing their private rental offer Serviced luxury properties Expedia & Trivago provide Experiences and restaurant tools to manage the in-stay Experiences and restaurant booking Google Hotel Ads Voice a
Slide 7: AccorHotels: The Most Diversified Hotel Player
ACCORHOTELS: THE MOST DIVERSIFIED HOTEL PLAYER STRONG LEADER ACROSS ALL GEOGRAPHIES ACROSS ALL SEGMENTS in % of rooms* in % of rooms* 4,681 Hotels 100+ Countries 33 leading BRANDS 685k rooms in network* 8% 49% 41% South Am Europe 25% 1,031 Hotels Economy Luxury & 5% Upscale 184k rooms in pipeline* N
Slide 8: Strong Leadership in Regions with Most Potential
STRONG LEADERSHIP IN REGIONS WITH MOST POTENTIAL ASPAC Europe MEA South Am excl. China AccorHotels Position* #1 #1 #1 #1 45% 36% 34% 50% % among top 5 Chains* #2 at 16% #2 at 24% #2 at 31% #2 at 17% Brand Penetration 30% 30% 35% 20% ACCORHOTELS | Capital Market Day - November 27, 2018 8
Slide 9: A Resilient and Well-Balanced Portfolio Across Cities & Countries
A RESILIENT AND WELL-BALANCED PORTFOLIO ACROSS CITIES & COUNTRIES TOP 20 CITIES TOP 20 COUNTRIES Less than 25% of AccorHotels total network Top 5 countries are spread over 4 continents % of total network Cumulative % % of total network Cumulative % Paris 2.6% 2.6% France 21% 21% London 1.7% 4.3% Chi
Slide 10: Strengthening Our Core Capabilities
Angsana Balaclava - Mauritius STRENGTHENING OUR CORE CAPABILITIES EXPANDING ENHANCING OUR STRONGER OUR PRESENCE PORTFOLIO OF OFFERS DIGITAL & LOYALTY WORLDWIDE & EXPERTISE CAPABILITIES Acceleration in China Expertise in luxury Large digital plan to build solid infrastructures Selectively entering No
Slide 11: Asset-Light Transformation Strategy Delivered as Planned
ASSET-LIGHT TRANSFORMATION STRATEGY DELIVERED AS PLANNED Transformation of the Group post Booster Owned & Leased 6% Managed 32% PORTFOLIO Owned & Leased Franchised 41% 33% Managed 61% A simpler Franchised 27% business model Owned & Leased 13% EBITDA Managed & Owned & Franchised Leased 46% 54% Manage
Slide 12: We Continue the Transformation to Asset-Light with the Acquisition
WE CONTINUE THE TRANSFORMATION TO ASSET- LIGHT WITH THE ACQUISITION Launch of a public tender offer on Orbis’ remaining 47% capital for PLN87 per share WE AIM AT GAINING FULL CONTROL OF ORBIS Continue roll-out of Asset Light strategy Replicate value creation of AccorHotels through monetization of as
Slide 13: Committed Talents: The Group's Key Strength
COMMITTED TALENTS: THE GROUP'S KEY STRENGTH 280,000 employees working for AccorHotels brands 80,000 recruitments in 2017 Gender diversity Commitment Development 29% HOTEL MANAGERS 77% 800 EMPLOYEES FEEL COMMITTED TO IN-HOUSE INSTRUCTORS CERTIFIED ARE THE GROUP IN 2017 BY THE ACCORHOTELS ACADEMY 42%
Slide 14: We Are Heartists
WE ARE HEARTISTS® Everything we do comes We are experts in from the heart what we do HEARTIST JOURNEY ROLL OUT We master the fine art of welcoming, 1,891 connecting, and serving others. HOTELS TEAMS TRAINED and ENGAGED Generous, creative and free, we are passionate about people, attentive to the wor
Slide 15: Our Keys to Success
OUR KEYS TO SUCCESS Outstanding Iconic & leading Global presence & State-of-the art People Brands Leadership Technology ACCORHOTELS | Capital Market Day - November 27, 2018 15
Slide 16: Execution Plan: Agenda of the Day
EXECUTION PLAN AGENDA OF THE DAY ATTRACT, CONVERT & TRANSFORM An engine geared to deliver substantial EBITDA growth Chris Cahill, Deputy CEO Hotel Operations RETAIN & MULTIPLY A digital transformation underway Maud Bailly, Chief Digital Officer EXPAND & TRANSFORM Development & pipeline: engaging par
Slide 17: An Engine Geared to Deliver Substantial EBITDA Growth
Angsana Balaclava - Mauritius AN ENGINE GEARED TO DELIVER SUBSTANTIAL EBITDA GROWTH Chris Cahill Deputy CEO in charge of Hotel Operations ACCORHOTELS | Capital Market Day - November 27, 2018
Slide 18: Agenda
AGENDA 1 BUSINESS TRANSFORMATION 2 PROVEN INTEGRATION CAPABILITY 3 OPERATIONAL FOCUS ACCORHOTELS | Capital Market Day - November 27, 2018
Slide 19: Business Transformation
Rixos Premium Bodrum - Turquie 1 BUSINESS TRANSFORMATION ACCORHOTELS | Capital Market Day - November 27, 2018
Slide 20: Pre-2016: Foundation of Economy and Midscale Brands
PRE-2016: FOUNDATION OF ECONOMY AND MIDSCALE BRANDS CLASSIC COLLECTIONS LIFESTYLE RESORTS REGIONAL LUXURY PREMIUM MIDSCALE 78% ECONOMY Owner, Operator, Developer, European ACCORHOTELS | Capital Market Day - November 27, 2018 20
Slide 21: 2018: A Comprehensive Brand Portfolio
2018: A COMPREHENSIVE BRAND PORTFOLIO CLASSIC COLLECTIONS LIFESTYLE RESORTS REGIONAL LUXURY ORI G I N A LS PREMIUM MIDSCALE ECONOMY ACCORHOTELS | Capital Market Day - November 27, 2018 21
Slide 22: Tremendous Scale and Consistent Network Growth
TREMENDOUS SCALE AND CONSISTENT NETWORK GROWTH 60% AWARENESS IN FRANCE, BRAZIL, GERMANY & UK 50% AWARENESS IN SPAIN, INDONESIA & AUSTRALIA 2,225 257 K HOTELS ROOMS ibis Styles - Manchester Portland ACCORHOTELS | Capital Market Day - November 27, 2018 22
Slide 23: Core Brand Reinvented
CORE BRAND REINVENTED 50% AWARENESS IN 13 COUNTRIES BEST-KNOWN MIDSCALE BRAND IN EUROPE & ASIA-PACIFIC 481 97 K HOTELS ROOMS Novotel- Avignon Nord ACCORHOTELS | Capital Market Day - November 27, 2018 23
Slide 24: High Growth Brand in a High Growth Segment
HIGH GROWTH BRAND IN A HIGH GROWTH SEGMENT +44% GROWTH BETWEEN 2018 & 2022 (number of hotels) 124 179 HOTELS TODAY HOTELS BY 2022 Pullman - New Delhi Aerocity ACCORHOTELS | Capital Market Day - November 27, 2018 24
Slide 25: A High Fee Contributor
A HIGH FEE CONTRIBUTOR LESS THAN 2% OF THE NUMBER OF HOTELS BUT 14% OF FEE INCOME 75 21 HOTELS HOTELS IN THE PIPELINE Fairmont - Marrakech ACCORHOTELS | Capital Market Day - November 27, 2018 25
Slide 26: The Only Global French Luxury Hotel Brand
THE ONLY GLOBAL FRENCH LUXURY HOTEL BRAND LESS THAN3% OF THE NUMBER OF HOTELS BUT 8.4% OF FEE INCOME 126 30 HOTELS HOTELS IN THE PIPELINE Sofitel – Kuala Lumpur ACCORHOTELS | Capital Market Day - November 27, 2018 26
Slide 27: The Shift to Asset-Light
THE SHIFT TO ASSET-LIGHT Hotel management is our core competency 6% 29% 26% 35% 33% 31% 33% 30% 61% 35% 40% 41% 2015 2016 2017 2018 Owned & Leased Franchised Managed ACCORHOTELS | Capital Market Day - November 27, 2018 27
Slide 28: Stable Income Streams Through the Business Cycle
STABLE INCOME STREAMS THROUGH THE BUSINESS CYCLE Type of fees Management Franchise Trademark ✓ ✓ Base management ✓ Incentive ✓ Sales & Marketing ✓ ✓ Distribution ✓ ✓ Loyalty ✓ ✓ Fee / room 3K€ 1.4k€ Contract length 15-30 years 10-15 years ACCORHOTELS | Capital Market Day - November 27, 2018 28
Slide 29: Proven Integration Capability
Rixos Premium Bodrum - Turquie 2 PROVEN INTEGRATION CAPABILITY ACCORHOTELS | Capital Market Day - November 27, 2018
Slide 30: FRHI Acquisition Provided Solid Foundation for Growth
FRHI ACQUISITION PROVIDED SOLID FOUNDATION FOR GROWTH STRATEGIC RATIONALE Strengthen our Strengthen Acquire 3 global brands positioning on Luxury human capital ✓ ✓ ✓ Synergies achieved New HMAs* signed 85% of targeted one year earlier since closing (+44) talent secured ACCORHOTELS | Capital Market D
Slide 31: Strategic M&A Driving Densification
STRATEGIC M&A DRIVING DENSIFICATION: Increase scale and market reach 135 Hotels Customer & market diversfication 25k Rooms Leverage synergies We are 3 times bigger than our closest competitor in Pacific ACCORHOTELS | Capital Market Day - November 27, 2018 31
Slide 32: Strategic M&A Driving Scale & Breadth
STRATEGIC M&A DRIVING SCALE & BREADTH: 86 hotels 53 signed HMAs* NETWORK 21k rooms PIPELINE (14K rooms) + 10 LOI** 23 Countries STRATEGIC INTENT VALUE DRIVERS ► Fill-in current portfolio ► Organizational effectiveness Upscale segment niche through synergies ► Strengthen leadership position ► Strong
Slide 33: Partnered Lifestyle Brands
PARTNERED LIFESTYLE BRANDS Strategic support for Lifestyle, Luxury and North America ACCORHOTELS | Capital Market Day - November 27, 2018 33
Slide 34: Stronger Geographical Footprint
STRONGER GEOGRAPHICAL FOOTPRINT Europe ASPAC Americas MEA +40%* network growth 331 295 86 61 11% 206 6% +8%* 38% 37% 34% 35% 61% increase in M&F 126 49 fees / room 21% 30 13% 33% 39% 35% 35% 56% 52% 36% 22% 37% +130%* 44% 27% 52% 31% 28% 17% network increase in LUXE rooms Sept. 2015 Sept. 2018 Sept.
Slide 35: Operational Focus
Rixos Premium Bodrum - Turquie 3 OPERATIONAL FOCUS ACCORHOTELS | Capital Market Day - November 27, 2018
Slide 36: Operating Engagement Rules
OPERATING ENGAGEMENT RULES EMPLOYEE GUEST COMPETITIVE FINANCIAL ENGAGEMENT SERVICE PERFORMANCE RESULTS ACCORHOTELS | Capital Market Day - November 27, 2018 36
Slide 37: Key Operating Performance Metrics
KEY OPERATING PERFORMANCE METRICS EMPLOYEE KPI ENGAGEMENT SCORE GUEST EXPERIENCE REVPAR INDEX FINANCIALS +200bps above GOP: 60bps MEASURE industry +30bps Above fair share Flowthrough: 50% benchmark Integrated Talent Personalization Loyalty Procurement ACTIONS & Culture System tool Integration platfo
Slide 38: Europe: €30M Performance Improvement per Year
EUROPE: €30M PERFORMANCE IMPROVEMENT PER YEAR From 10 siloed countries to 1 coherent Europe Achieve consistency & scalability • Operations & Development reinforced, within 5 hubs throughout Europe • Guests Experience, Sales, e-commerce & CRM @ European level • Partner Relationship Management @ Europ
Slide 39: Key Takeaways
KEY TAKEAWAYS Comprehensive Strategic acquisitions Strong geographical Relentless focus on brand portfolio enhance value footprint operating performance ACCORHOTELS | Capital Market Day - November 27, 2018 39
Slide 40: A Digital Transformation Underway
Angsana Balaclava - Mauritius A DIGITAL TRANSFORMATION UNDERWAY Maud Bailly Chief Digital Officer ACCORHOTELS | Capital Market Day - November 27, 2018
Slide 41: Agenda
AGENDA 1 WE DELIVERED 2 USAGE: SEIZE CHINESE GROWTH 3 PERSONALIZATION & LOYALTY ACCORHOTELS | Capital Market Day - November 27, 2018
Slide 42: A Wide Perimeter to Embrace the End-to-End Customer Experience
A WIDE PERIMETER TO EMBRACE THE END-TO-END CUSTOMER EXPERIENCE HOTEL & GUEST GLOBAL PRODUCT & INFORMATION DATA & REGION SERVICES SALES INNOVATION SYSTEMS ANALYTICS SERVICES 1 strong Revenue Key account User Experience From 250 to 1.000 From 5 to Loyalty Program Management management Culture Key look
Slide 43: A Certain Paradox: Hospitality Will Never Be Completely Dematerialized
A CERTAIN PARADOX: HOSPITALITY WILL NEVER BE COMPLETELY DEMATERIALIZED… INTERMEDIATION OF BLURRING BOUNDARIES DOUBLE COMPETITION: CUSTOMER RELATIONSHIP BRICK & MORTAR X DIGITAL TRADITIONAL & DIGITAL & VALUE CHAIN B2B X B2C …however, this ‘non digital native’ industry is already one of the most digit
Slide 44: Fast-Moving Environment with 3 Main Trends
WE ARE IN A FAST-MOVING ENVIRONMENT, WITH 3 MAIN TRENDS IMPACTING OUR INDUSTRY CONSOLIDATION DIVERSIFICATION ACCELERATION Scale matters Emerging giant ecosystems Pace of change and delivery Loyalty mechanisms making customers captive Test & MVP culture (Minimum Viable Product) ACCORHOTELS | Capital
Slide 45: Digital and Cultural Transformation for Hotels & Guests
IMPACT IS A DIGITAL AND CULTURAL TRANSFORMATION, TO BE CHOSEN BY OUR TWO CLIENTS: HOTELS & GUESTS PERSONALIZATION & STICKINESS OMNICHANNEL: THINK NET FOR THE OWNER! CO-DESIGN & COMMERCIAL MINDSET BASED ON SCALABILITY, VECTOR OF PROFITABILITY 5 PRINCIPLES NEVER-ENDING VIRTUOUS MODEL ACCORHOTELS | Cap
Slide 46: Our Distribution Platform Has Never Been So Powerful
OUR DISTRIBUTION PLATFORM HAS NEVER BEEN SO POWERFUL FASTER STRONGER EASIER 4x faster on mobile Double-digit growth 2x faster on desktop +79% Direct Web Revenue App revenue YoY (Homepage Loading times YtD oct18 vs YtD oct17 vs last year) SMARTER CLEARER WIDER 83% 7/10 €100m Comprehension rate Roomni
Slide 47: We Structure Our Roadmap Through 3 Strategic Categories
WE STRUCTURE OUR ROADMAP THROUGH 3 STRATEGIC CATEGORIES STANDARD KEY CORE Not differentiating Key lever of growth Highly differentiating State of the art quality Cannot be done alone Rely on our core assets At the best cost Need to partner with the bests Need to own it ACCORHOTELS | Capital Market D
Slide 48: We Partner with Leading Technology Players
WE PARTNER WITH LEADING TECHNOLOGY PLAYERS Boost our distribution power 6th annual Joint Business Plan in China The first search engine Enrich our supply & loyalty offer for travel experiences in China without preselecting destination Artificial intelligence at the service of Marketing campaigns ACC
Slide 49: Seize Chinese Growth
SEIZE CHINESE GROWTH Start from Usage ACCORHOTELS | Capital Market Day - November 27, 2018
Slide 50: China, the Largest Outbound Market, Is a Tremendous Opportunity
CHINA, THE LARGEST OUTBOUND MARKET IS A TREMENDOUS OPPORTUNITY FOR ASIA-PACIFIC & EUROPE Already impressive #1 in ASPAC Payment methods: volumes & #1 in Europe Two major players A huge potential for ASPAC & Europe 145m Chinese travelers 1 Bn We are leader in Active user 8 out of 20 Top destinations
Slide 51: Our China 2020 Ambition
OUR CHINA 2020 AMBITION X2 X3.5 CHINESE CHINESE TRAVELERS LOYALTY MEMBERS ROOMNIGHTS OUTSIDE CHINA From 2017 to 2020 ACCORHOTELS | Capital Market Day - November 27, 2018 52
Slide 52: Personalization
PERSONALIZATION ACCORHOTELS | Capital Market Day - November 27, 2018
Slide 53: Accor Customer Digital Card
ACCOR CUSTOMER DIGITAL CARD SHARE OUR GLOBAL CUSTOMER KNOWLEDGE ACROSS THE GROUP 3,500 89 23 HOTELS COUNTRIES BRANDS Countries with at least one hotel rolled out RECOGNIZE & DELIGHT OUR GUESTS TO DEVELOP LONG-TERM ATTACHMENT ACCORHOTELS | Capital Market Day - November 27, 2018 54
Slide 54: A Virtuous Business Circle
A VIRTUOUS BUSINESS CIRCLE ENRICH KNOWLEDGE LEVERAGE SCALE 83% customers are ready to share 50% of new customers for hotels personal information to improve their experience 2 have actually already stayed in an other hotel of the group before 1 ENGAGE up to 3 +1pt up to +11% online = +14% BOOKINGS AD
Slide 55: Loyalty
LOYALTY ACCORHOTELS | Capital Market Day - November 27, 2018
Slide 56: A Strong Loyalty Program, Acclaimed by Its Members
A STRONG LOYALTY PROGRAM, ACCLAIMED BY ITS MEMBERS 50m 17 Most awarded Program in 2018 members brands +35% Including in 2018 6 freddie awards Fairmont, Raffles 6 frequent traveler Swissôtel, awards Rixos in all categories Full integration But also over all continents of FRHI loyalty onefinestay, pro
Slide 57: The Future of Loyalty Will Be...
THE FUTURE OF EARN & BURN LOYALTY WILL BE… EVERYWHERE FOOD & BEVERAGE IN-HOTEL EXPERIENCE Make my Make experience me feel PARTNER SEAMLESS REWARDED DEPTH & DIGITAL BREADTH EXPERIENCE DIGITAL EXPERIENCE X GUEST STICKINESS X DATA Make Make me feel me feel SPECIAL RECOGNIZED TIERS EXPERIENCES & & BENEF
Slide 58: Development & Pipeline: Engaging Partners
Angsana Balaclava - Mauritius DEVELOPMENT & PIPELINE: ENGAGING PARTNERS TO BUILD AND ACCELERATE THE FUTURE Gaurav Bhushan Global Chief Development Officer ACCORHOTELS | Capital Market Day - November 27, 2018
Slide 59: Agenda
1 DEVELOPMENT STRATEGY 2 PRODUC T DEVELOPMENT & TRANSFORMATION 3 BRAND VISIBILITY WITH ENHANC ED PORTFOLIO AGENDA 4 INVESTING IN HIGH GROWTH BRANDS 5 LIFESTYLE HOTELS OPPORTUNITY 6 AMBITION ACCORHOTELS | Capital Market Day - November 27, 2018
Slide 60: Development Strategy
Rixos Premium Bodrum - Turquie 1 DEVELOPMENT STRATEGY ACCORHOTELS | Capital Market Day - November 27, 2018
Slide 61: Objectives and Dual Strategy
Objectives Increase pace of organic openings both in Luxe and in Mid / Eco Increase fee per room through enhanced exposure to higher fee yielding segments (luxe, leisure, lifestyle) Dual strategy High paced organic growth with balanced brand portfolio Strategic M&A as key lever of growth ACCORHOTELS
Slide 62: Doubled Pace of Organic Openings in 5 Years
DOUBLED PACE OF ORGANIC OPENINGS IN 5 YEARS DOUBLED NUMBER OF LUXE ROOM OPENINGS IN 5 YEARS In k rooms ~300 h > 42 kr c. 1.9x 8 170 h Luxe 23 kr 16 INCREASED MOMENTUM 4 Midscale ACROSS ALL SEGMENTS 6 Economy 18 12 2013 2018 E ACCORHOTELS | Capital Market Day - November 27, 2018 63
Slide 63: Pipeline: Increasing Quantity, Improving Quality
PIPELINE: INCREASING QUANTITY, IMPROVING QUALITY M&F RUN RATE FEES / BY REGION BY SEGMENT ROOM +15% Increased share +75% 30% Increase in pipeline in fast growing markets increase in luxe rooms increase in M&F fee / room (run rate) # rooms # rooms 2015 (1) 19% 17% 23% 874 162K 17% 46% 1.5k€ HOTELS RO
Slide 64: Strongest Organic Opening Delivery Among Peers
STRONGEST ORGANIC OPENING DELIVERY AMONG PEERS Transformation of 2013 pipeline in 2014-2017 gross organic openings 107% 102% 100% 96% 91% ACCORHOTELS | Capital Market Day - November 27, 2018 65
Slide 65: A 5.1% Organic Annual Net System Growth Over 2015-2017
A 5.1% ORGANIC ANNUAL NET SYSTEM GROWTH OVER 2015-2017 Organic Openings Closings as a % Net Openings as a % of network n-1 of network n-1 as a % of network n-1 0,9% 2,2% 7,0% 1,4% 9,7% 2,5% 7,3% 7,1% 6,2% 6,6% 5,8% 5,1% 5,2% 3,3% 2,7% ACCORHOTELS | Capital Market Day - November 27, 2018 66
Slide 66: #1 Player with Strongest Potential Outside North America
#1 PLAYER WITH STRONGEST POTENTIAL OUTSIDE NORTH AMERICA Network (end-2016)* Openings (FY2017 + H1 2018)* # krooms, in all markets outside NorthAm # krooms, in all markets outside NorthAm 560 57 381 44 A A 317 35 B B 182 30 C C 60 9 D D Key international competitors incl. Marriott, Hilton, IHG & Hya
Slide 67: Product Development & Transformation
Rixos Premium Bodrum - Turquie 2 PRODUCT DEVELOPMENT & TRANSFORMATION ACCORHOTELS | Capital Market Day - November 27, 2018
Slide 68: Product Development Global Approach
PRODUCT DEVELOPMENT GLOBAL APPROACH 1 2 3 UNDERSTAND BRAND DNA ANALYZE COMPETITION CREATE MARKET-ALIGNED AND THE MARKET, AND CREATE BESPOKE F&B CREATE WORLD-CLASS CONCEPTS BRAND CENTRIC FOR LUXE PRODUCTS FOR MULTIBRANDS AND BESPOKE LUXE PRODUCTS ACCORHOTELS | Capital Market Day - November 27, 2018 6
Slide 69: How Do We Translate Brand DNA to Great Hotel Products
HOW DO WE TRANSLATE BRAND DNA TO GREAT HOTEL PRODUCTS INTERIOR STYLE BOOKS DESIGN & ARCHITECTURE AMBIENCE SPACE DESIGN BRIEF CRG CONCEPT GUIDELINES CONSTRUCTION PRODUCT BOOKLET DETAILS DESIGN BEST IN CLASS SPECIALIZED EQUIPMENT/ COMFORTS/ CONSULTANTS GUIDE GUEST TECH/IT ENGINERRING BRAND PLATFORM BR
Slide 70: Luxury and Premium Brand's Approach
LUXURY AND PREMIUM BRAND’S APPROACH F&B WELLNESS PUBLIC AREAS ROOMS ACCORHOTELS | Capital Market Day - November 27, 2018 71
Slide 71: The Global F&B Approach
THE GLOBAL F&B APPROACH 1 3 5 7 9 11 ART & F&B NARRATIVE BRANDING & PHOTOGRAPHY: MARKET STUDY INTERIOR PHOTOGRAPHY & SPATIAL SIGNAGE & ARCHITECTURAL & ANALYSIS ARCHITECTURE & CURATION PLANNING COLLATERAL & LIFESTYLE & PLANNING 2 4 6 8 10 KITCHEN UNIFORMS & BUSINESS PLANNING & LIGHTING ACOUSTIC & COS
Slide 72: The Project Delivery
THE PROJECT DELIVERY SPACE & STYLE FACILITY MULTIBRAND APPROACH PROJECTS BRAND OWNERS F&B PRODUCT REFURBS LUXE APPROACH GUEST TECHNOLOGY TECHNICAL & COMFORT MARKETING OWNERS ACCORHOTELS | Capital Market Day - November 27, 2018 73
Slide 73: The Powerful Tools
THE POWERFUL TOOLS ACCOR ASPAC FLAGSHIP IMAGES OPEN LIBRARY D&TS HOTELS LIBRARY (Global Platform) (Application) (Web-based Platform) (Web-based Platform) (Energy Bench Markers) ACCORHOTELS | Capital Market Day - November 27, 2018 74
Slide 74: Brand Visibility with Enhanced Portfolio
Rixos Premium Bodrum - Turquie 3 BRAND VISIBILITY WITH ENHANCED PORTFOLIO ACCORHOTELS | Capital Market Day - November 27, 2018
Slide 75: High Density and High Visibility in Global Gateways: Dubai
HIGH DENSITY AND HIGH VISIBILITY IN GLOBAL GATEWAYS DUBAI 17M ANNUAL VISITORS In operation & under development: Raffles Dubai The Palm So Uptown Dubai Mama Shelter Business Bay Sofitel Wafi Dubai 66 19,300 17 120 r. - 2021 188 r. - 2021 317 r. - 2021 598 r. - 2020 HOTELS ROOMS BRANDS Largest interna
Slide 76: High Density and High Visibility in Global Gateways: Makkah
HIGH DENSITY AND HIGH VISIBILITY IN GLOBAL GATEWAYS MAKKAH 15M ANNUAL VISITORS In operation & under development: 15 11,800 9 HOTELS ROOMS BRANDS Leading operator in market *8 hotels in operations ACCORHOTELS | Capital Market Day - November 27, 2018 78
Slide 77: High Density and High Visibility in Global Gateways: Singapore
HIGH DENSITY AND HIGH VISIBILITY IN GLOBAL GATEWAYS SINGAPORE 18M ANNUAL VISITORS Mercure & Novotel Singap. 772 r. - 2017 In operation & under development: Raffles Singapore 103 r. - 1887 16 6,400 9 HOTELS ROOMS BRANDS Leading operator in market *15 hotels in operations Swissôtel & Fairmont The Stam
Slide 78: High Density and High Visibility in China with Huazhu
H I G H D E N S I T Y A N D H I G H V I S I B I L I T Y IN CHINA WITH HUAZHU AccorHotels Standalone AccorHotels with Huazhu Mercure Shenzen Pinghu, Shenzen 180 rooms in 2015 in 2018 c.9k rooms 2k rooms openings x4 openings* 6k rooms 18k rooms in pipeline** x3 in pipeline** Ibis Styles Hong Zhong Roa
Slide 79: Investing in High Growth Brands
Rixos Premium Bodrum - Turquie 4 INVESTING IN HIGH GROWTH BRANDS ACCORHOTELS | Capital Market Day - November 27, 2018
Slide 80: Investing in High Growth Brands: Fairmont Raffles Swissôtel
INVESTING IN HIGH GROWTH BRANDS: FAIRMONT RAFFLES SWISSÔTEL SINCE CLOSING IN JULY 2016 44 h €50m €5k From 21x EV/EBITDA @ closing New Signings* Additional M&F run rate Fees/room (11k rooms) 25% of network at closing** fees secured (vs. 2k at group level) to 13x EV/EBITDA in 2017 19% 10% 26% Europe F
Slide 81: Flagships Signed Post-Transaction
FLAGSHIPS SIGNED POST-TRANSACTION OPENING 2019 OPENING 2021 OPENING 2021 OPENING 2021 Fairmont Center Plaza LA Raffles The Palm Dubai Raffles London Raffles Boston (394 rooms) (125 rooms) (125 rooms) (147 rooms) ACCORHOTELS | Capital Market Day - November 27, 2018 83
Slide 82: Investing in High Growth Brands
INVESTING IN HIGH GROWTH BRANDS 86 h 63 h of 15 h € 2.2k 15x EV/EBITDA In network In pipeline* Signed since @ closing which deal announcement M&F Fees/room (21k rooms) (75% of network) in April 18 (network) <10x EV/EBITDA @ run rate Upper Upscale 4% # ROOMS 16% 20% Europe 39% MEA Upscale 57% ASPAC 6
Slide 83: Lifestyle Hotels Opportunity
Rixos Premium Bodrum - Turquie 5 LIFESTYLE HOTELS OPPORTUNITY ACCORHOTELS | Capital Market Day - November 27, 2018
Slide 84: Lifestyle: 2% of Branded Supply and 10% of Branded Pipeline
LIFESTYLE: 2% OF BRANDED SUPPLY AND 10% OF BRANDED PIPELINE WE HAVE THE MOST COMPREHENSIVE BRAND PORTFOLIO IN THE INDUSTRY LUXURY PREMIUM MIDSCALE New brand ECONOMY New brand ACCORHOTELS | Capital Market Day - November 27, 2018 86
Slide 85: Lifestyle Hotels
LIFESTYLE HOTELS AN ATTRACTIVE ACCOR LIFESTYLE HOTELS WITH BETTER KPIS THAN PRODUCT CONCEPT PIPELINE (ALL BRANDS) TRADITIONAL BRANDS 51h Vs traditional For example upscale brand in Berlin opened Higher guest engagement (11k rooms) (from millenials) Occ 89% 72% Higher share of revenue 54h ADR €168 €1
Slide 86: Ambition
Rixos Premium Bodrum - Turquie 6 AMBITION ACCORHOTELS | Capital Market Day - November 27, 2018
Slide 87: Accelerating Pace of Development
ACCELERATING PACE OF DEVELOPMENT 1 HOTEL EVERYDAY! TARGET ANNUAL ORGANIC OPENINGS EVOLUTION +25- 30%* 350-375h 1 HOTEL IN 33 HOURS >50 kr 264h >10 kr 41 kr 31% +40%* 210h 20% Ramp up based on 30 kr enhanced brand portfolio 33% 20% 34% 30% 46% 39% 50% 2012 2017 Midterm objective Luxe Midscale Economy
Slide 88: Driving Volume & Fee per Room
DRIVING VOLUME & FEE PER ROOM MANAGEMENT & FRANCHISE FEE RUN RATE EVOLUTION € 1.7k PER ROOM >50 kr c. € 90m € 1.3k PER ROOM X 1.7 € 1.1k PER ROOM 41 kr 63% € 55m X 1.7 30 kr € 32m 46% 26% 20% 34% 30% 40% 23% 17% 2012 2017 Midterm objective Luxe Midscale Economy ACCORHOTELS | Capital Market Day - Nov
Slide 89: A Financial Model Geared to Deliver Shareholder Value
Grand Mercure Beijing Dongcheng - China A FINANCIAL MODEL GEARED TO DELIVER SHAREHOLDER VALUE Jean-Jacques MORIN Deputy CEO ACCORHOTELS | Capital Market Day - November 27, 2018
Slide 90: Agenda
AGENDA 1 WE DELIVERED 2 WE HAVE MORPHED IN A NEW MODEL 3 DRIVING VALUE PER SEGMENT 4 A CASH DRIVEN MODEL ACCORHOTELS | Capital Market Day - November 27, 2018
Slide 91: We Delivered
Rixos Premium Bodrum - Turquie 1 WE DELIVERED ACCORHOTELS | Capital Market Day - November 27, 2018
Slide 92: We Delivered Significant EBITDA Growth Year After Year
WE DELIV ERE D SIGNIFICANT EBITDA GROWTH YE AR AF TE R YE AR HISTORICAL ACCORHOTELS(1) ACCORHOTELS TODAY +7% EBITDA CAGR 2013-2017 +20% EBITDA CAGR 2016-2018 1,148 986 1,037 923 700-720(4) 865 19,4% 626(3) 18,4% 506(2) 17,7% 32,3% 16,9% 30,8% 15,6% 2013 2014 2015 2016 2017 2016 2017 2018 EBITDA EBIT
Slide 93: We Delivered on Booster Proceeds per Commitment
WE DELIVERED ON BOOSTER PROCEEDS PER COMMITMENT What we said on February 27th, 2018 Selected regional M&A Committed to investment grade Return to shareholders opportunities Balance sheet flexibility Where we are today €1.9bn M&A in 2018 Completed share buyback Solid on 10x EV/EBITDA (1st tranche of
Slide 94: We Have Morphed in a New Model
Rixos Premium Bodrum - Turquie 2 WE HAVE MORPHED IN A NEW MODEL ACCORHOTELS | Capital Market Day - November 27, 2018
Slide 95: A Simpler Value Proposition: The Asset Light Virtuous Circle
A SIMPLER VALUE PROPOSITION THE ASSET LIGHT VIRTUOUS CIRCLE SCALE INCREASE BUILD-UP OF FEES ATTRACTIVE STRENGTHENING BRANDS OF LOYALTY & MOMENTUM & DISTRIBUTION ACCORHOTELS | Capital Market Day - November 27, 2018 97
Slide 96: We Delivered a Radical Transformation Shaping Our Financials
WE DELIVERED A RADICAL TRANSFORMATION SHAPING OUR FINANCIALS MORE ASSET-LIGHT MORE LUXE MORE GLOBAL (Rooms %) (Fee %) (Business volume %) 6% Asset-heavy 22% 26% 42% Luxe 41% RoW Asset- 44% Luxe RoW heavy 94% Asset- 78% Eco 74% light 59% 58% Midsca Eco Europ 56% Asset- le e Europ Midsca light le e 20
Slide 97: Our Performance Is Growth & Cash-Focused
OUR PERFORMANCE IS GROWTH & CASH-FOCUSED ASSET-LIGHT MODEL KPIs ► Fee-driven top-line ► EBITDA ► Cost effectiveness ► Recurring Free Cash Flow (1) ► Dividend payout based ► Limited recurring capex on Recurring Free Cash Flow ► Strong cash-flow generation ► Adjusted EBITDA ACCORHOTELS | Capital Marke
Slide 98: From Reported EBITDA at €622M to Adjusted EBITDA of €911M
FROM A REPORTED EBITDA AT €622M TO ADJUSTED EBITDA OF €911M (OF WHICH 80% STRATEGIC AND 20% TACTICAL) (ALL NUMBERS ARE FY17) STRATEGIC INVESTMENTS TACTIC INVESTMENTS % stake* % stake* % stake* 50% 20% €1.25 BN 50% 30% equity value 50% 40% 37% 30% €760 M 33% 50% market value** 50% + €217 M + €54 M AC
Slide 99: Driving Value per Segment
Rixos Premium Bodrum - Turquie 3 DRIVING VALUE PER SEGMENT ACCORHOTELS | Capital Market Day - November 27, 2018
Slide 100: Three Segments with Specific Dynamics
THREE SEGMENTS WITH SPECIFIC DYNAMICS HOTELSERVICES HOTEL ASSETS NEW BUSINESSES & HOLDING System RevPar RevPar Asset Topline double digit Sales Growth Growth +2-4% +2-4% Rotation growth >5% CAGR CAGR Breakeven EBITDA +10-12% +5-7% Q4 2019 Recurring Free CAGR Cash Flow >10% ACCORHOTELS | Capital Mark
Slide 101: Hotel Assets - Two Key Growth Levers
HOTEL ASSETS - TWO KEY GROWTH LEVERS 2018 Acquisition REVERSE MANAGEMENT LEASES ► Asset rotation to unlock value and strengthen our asset -light profile Asset Rotation ► To be crystallized through building €1bn+ disposals and lease restructuring worth of asset value Operational ► Operational excelle
Slide 102: A Compelling Opportunity & Extension of Booster
A COMPELLING OPPORTUNITY & EXTENSION OF BOOSTER #1 Hotel Operator ~130 hotels 52.7% AccorHotels Revenue: €342m in Central Eastern Europe of capital owned by Master Franchisor ~21k rooms EBITDA: €110m (CEE) AccorHotels in CEE (16 countries) ~47 hotels in pipeline (FY17) Improve optionality on Orbis’
Slide 103: Transaction Parameters
TRANSACTION PARAMETERS TRANSACTION PARAMETERS Launch of a unconditional public Implied cash-out of €442m tender offer on Orbis 47% remaining ► Implied EV/EBITDA 2018E of 8.5x (based on capital for PLN 87 per share latest EBITDA management guidance ) ► c.20% premium to the last close of PLN72.80 ► EP
Slide 104: New Businesses – On the Way to Profitable Growth
NEW BUSINESSES – ON THE WAY TO PROFITABLE GROWTH TOP/BOTTOM LINE LEVERAGING EXPERIENCE ENHANCEMENT OPTIMIZATION SQUARE METERS FOR OUR HOTEL GUESTS FOR OUR HOTEL IN OUR HOTEL Exceptional New distribution private sales channels to reach Better meet the needs of nomad workers Luxury private rentals mor
Slide 105: A Clear Path to Deliver €1.2bn EBITDA by 2022
A CLEAR PATH TO DELIVER €1.2BN EBITDA BY 2022 €1.2 BN 30% 5% 10% 10% 10% Cost rightsizing Operational 15-20% leverage Net System €626 M 15-20% Growth >5% RevPar >3% HOTEL NEW HOTEL SERVICES COST BASE ASSETS BUSINESSES M&A Top-line growth Cost effectiveness Asset Management Path to Profitability 2017
Slide 106: EBITDA Acceleration Over 5 Years
EBITDA ACCELERATION OVER 5 YEARS EBITDA growth accelerated through cost effectiveness Sales Growth through RevPAR & system growth Cost effectiveness 2018 2019 2020 2021 2022 ACCORHOTELS | Capital Market Day - November 27, 2018 108
Slide 107: A Cash Driven Model
Rixos Premium Bodrum - Turquie 4 A CASH DRIVEN MODEL ACCORHOTELS | Capital Market Day - November 27, 2018
Slide 108: €200-250M Recurring Capex Mainly Towards Development
€200-250M RECURRING CAPEX* MAINLY TOWARDS DEVELOPMENT Holding 5% New Businesses 5% Hotel Assets & Others 15% €200-250m HotelServices 75% of which IT 20% ACCORHOTELS | Capital Market Day - November 27, 2018 110
Slide 109: Improved Visibility on Shareholders' Return
IMPROVED VISIBILITY ON SHAREHOLDERS’ RETURN Ordinary Dividend 50% of recurring Cash Flow Recurring Free Cash Flow ► M&A Excess Cash ► Exceptional Flow distribution ► Balance sheet reinforcement ACCORHOTELS | Capital Market Day - November 27, 2018 111
Slide 110: Disciplined M&A Policy
DISCIPLINED M&A POLICY In line with EBITDA multiple & EPS accretive Financial Criteria Credit Profile (post synergies & ramp-up) strategy 21x EV/EBITDA €2.6bn 24 EPS accretive months Value* year 2 13x Committed to Investment 12x EV/EBITDA Grade €1.9bn EPS accretive & other Value* year 1 9x ACCORHOTE
Slide 111: A Robust Balance Sheet Enabling Strategy
A ROBUST BALANCE SHEET ENABLING STRATEGY IMPROVING COST OF DEBT AND MATURITY IFRS DEBT REPAYMENT SCHEDULE 7% 4,5 4,6 5 6% 4,2 4,5 3,5 3,6 4 5% 4,3% 3,5 3,5 years 3 4% 3,1% 1,421 2,9% 2,9% 2,5 3% 2,0% 2 951 2% 1,7% 1,5 1 1% 0,5 335 138 193 0% 0 70 2013 2014 2015 2016 2017 Sept 18 2018 2019 2020 2021
Slide 112: AccorHotels Business Model at a Glance
ACCORHOTELS BUSINESS MODEL AT A GLANCE Top line growth HotelServices Hotel Assets & Others New Businesses Cost monitoring Profit conversion: EBITDA Cash conversion 70%+* Recurring Free Cash Flow Pay-out ratio Excess 50% cash-flow Ordinary M&A / exceptional distribution dividend / balance sheet reinf
Slide 113: Investment Thesis
INVESTMENT THESIS 1 AccorHotels is a unique value proposition, #1 in all regions (excl. the US and China) 2 Our model is well-balanced, diversified and shaped to face diruption 3 We deliver a simple asset-light, cash-generative and self-deleveraging model 4 We create value applying a disciplined M&A
Slide 114: Closing Remarks
Grand Mercure Beijing Dongcheng - China CLOSING REMARKS Sébastien Bazin Chairman & CEO ACCORHOTELS | Capital Market Day - November 27, 2018
Slide 115: Key Takeaways
KEY TAKEAWAYS Strong confidence in AccorHotels ambition outlined today for two simple reasons AccorHotels has all features to be successful We have completed the Brands Partners transformation phase and enter Financial Means now into the execution of the Geographic asset light strategy presence Tech
Slide 116: Q&A
Rixos Premium Bodrum - Turquie Q&A ACCORHOTELS | Capital Market Day - November 27, 2018
Slide 117: Investor Day
INVESTOR DAY November 27th, 2018