Choice Hotels International, Inc. · NYSE:CHH
Choice Hotels International — Q3 2023 Earnings Presentation
18 slides from Choice Hotels International's earnings presentation, Nov 7, 2023
Slide 1: Third Quarter 2023 Investor Presentation
THIRD QUARTER 2023 INVESTOR PRESENTATION November 7, 2023 1
Slide 2: Forward-looking Statements
Forward-looking Statements Certain matters discussed in this presentation constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Certain, but not necessarily all, of such forward-looking statements can be identified by the use of forward-l
Slide 3: Table of Contents
Table of Contents 1. Third Quarter 2023 Update 2. A Compelling Combination with Wyndham Hotels & Resorts 3. Appendix 3
Slide 4: Third Quarter 2023 Update
1 Third Quarter 2023 Update • Country Inn & Suites, Smithfield-Selma, NC 4
Slide 5: Third Quarter 2023 Performance Recap
Third Quarter 2023 Performance Recap Update Global Overall >99,000 rooms +6% QoQ Openings Strategic With one of the largest Pipeline hotel operators in Partnership Mexico Expansion Global Conversion +27% +11% +24% YoY QoQ YoY Global Overall Domestic Upscale Domestic Extended Stay Effective Royalty R
Slide 6: Third Quarter 2023 Financial Performance
Third Quarter 2023 Financial Performance Revenues Profitability $425.6M $15.5M $148.5M $155.9M $1.82 Total revenues Platform & procurement Royalty, licensing & Adj. EBITDA2 Adj. diluted EPS Quarterly record services fees management fees1 Quarterly record +3% YoY +8% YoY +6% YoY +12% YoY +17% YoY Int
Slide 7: Choice Hotels has delivered double-digit profitability growth
PROFITABILITY (AS REPORTED ADJUSTED EBITDA) AND GROWTH RATES Choice Hotels has delivered double-digit profitability growth Growth YoY - 16% 10% -35% 67% 19% 12% YoY Organic - 11% 10% -35% 67% 14% 8% every year since 20171; Growth2 $538 profitability in 2023 is $479 expected to be 44% higher than 201
Slide 8: A Compelling Combination with Wyndham Hotels & Resorts
2 A Compelling Combination with Wyndham Hotels & Resorts 8
Slide 9: Choice's Highly Attractive Proposal Creates Value for Both Shareholders
Choice’s Highly Attractive Proposal Creates Value COMPELLING PROPOSAL WITH A for Both Wyndham and Choice Shareholders SUBSTANTIAL PREMIUM ̶ $90.001 per share, including: Mix of cash and stock enables Wyndham shareholders to both realize − $49.50 per share in cash 1 immediate value creation and share
Slide 10: Choice Has Continuously Attempted to Address Wyndham's Concerns
Choice Has Continuously Despite Choice’s best efforts, Wyndham has repeatedly made it clear they were Attempted to Address unwilling to engage in further discussions and negotiate a deal in the best interest of Wyndham’s Concerns their shareholders… Choice asks the Wyndham Board… What’s the harm in
Slide 11: Wyndham Has Mischaracterized the Facts
Wyndham Has Mischaracterized the Facts THE REALITY… ✓ Choice enhanced its offer on multiple occasions, addressing the key concerns raised by Wyndham’s Board, and received verbal The Parties Were in a indication that we were within a negotiable range with respect to value and consideration mix Negoti
Slide 12: Appendix
3 Appendix 12
Slide 13: 2023 Revenue Sensitivities
2023 Revenue Sensitivities 1% Increase in RevPAR 1 bps Increase in effective 1% Increase in unit growth in the royalty rate higher revenue segments1 =$5M in royalties =$1Min royalties =$4.5M in royalties * All results include the impact of the Radisson Americas acquisition. 1. Represents the company
Slide 14: Non-GAAP Financial Measurements and Other Definitions
Non-GAAP Financial Measurements and Other Definitions The company evaluates its operations utilizing the performance metrics of adjusted EBITDA, adjusted selling, general and administrative (SG&A) expenses, revenues excluding reimbursable revenue from franchised and managed properties and extraordin
Slide 15: Non-GAAP Financial Measurements and Other Definitions
Non-GAAP Financial Measurements and Other Definitions Occupancy Occupancy represents the total number of room nights sold divided by the total number of room nights available at a hotel for a given period. Occupancy measures the utilization of the hotels’ available capacity. Management uses occupanc
Slide 16: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures ADJUSTED NET INCOME AND ADJUSTED DILUTED EARNINGS PER SHARE (EPS) ($ millions) Q3 2023* Q3 2022* FY 2023* FY 2022* Net income $ 92.0 $ 103.1 $ 261.7 $ 332.2 Adjustments: Loss on impairment of unconsolidated joint ventures - - - (12.2) (Gain) Loss on sale of busine
Slide 17: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION ("EBITDA") ($ millions) Q3 2023* Q3 2022* FY 2023* FY 2022* FY 2021* FY 2020* FY 2019* FY 2018* FY 2017* Net income $ 92.0 $ 103.1 $ 254.8 $ 332.2 $ 289.0 $ 75.4 $ 222.9 $ 216.4 $ 122.3 Income
Slide 18: Additional Information
Additional Information • This communication does not constitute an offer to buy or solicitation of an offer to sell any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under t
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