H World Group Limited · HKEX:1179
H World — Huazhu Group — Q1 2022 Earnings Presentation
29 slides from H World's earnings presentation, May 31, 2022
Slide 1: First Quarter of 2022 Earnings Call
First Quarter of 2022 Earnings Call Huazhu Group Limited (NASDAQ: HTHT and HKEX: 1179) May 31, 202 2 1
Slide 2: Agenda
AGENDA • 1Q2022 Business Update • 1Q2022 Operational and Financial Review • Liquidity and Guidance • Q and A • Appendix 2
Slide 3: COVID-19 Resurgence Constantly Impact RevPAR Recovery
COVID-19 Resurgence Constantly Impact RevPAR Recovery 疫情不断反复持续影响RevPAR的恢复 Blended RevPAR in 2021 and 2022 as % of 2019 RevPAR Recovery in 2022 RevPAR Recovery in 2021 106% 103% 100% 100% 83% 95% 92% 90% 90% 75% 67% 65% 65% 74% 76% 58% 53% 56% Lockdown imposed in several cities 54% COVID-19 resurgenc
Slide 4: Reinforcement of Cost Control for Legacy-Huazhu
Reinforcement of Cost Control for Legacy-Huazhu 华住中国加强成本管控 Streamlining headcounts and expenses 1 人力成本和费用优化 Concentrating resources to major strategies 2 战略聚焦 3 Negotiating on lease waiver/reduction 疫情下的租金减免 4
Slide 5: Taking on Social Responsibilities to Provide Requisitioned Hotels
Taking on Social Responsibilities to Provide Requisitioned Hotels 承担企业社会责任，提供征用酒店 Number of Hotels under Requisition 1,804 1,765 1,728 1,709 1,615 1,654 1,541 1,299 966 759 375 232 4-Mar-22 11-Mar-22 18-Mar-22 25-Mar-22 1-Apr-22 8-Apr-22 15-Apr-22 22-Apr-22 29-Apr-22 6-May-22 13-May-22 20-May-22 * N
Slide 6: Sales and Marketing Strategies During COVID-19
Sales and Marketing Strategies During COVID-19 疫情阶段的营销抢夺 COVID-related Regional-based Members & External Accommodation Needs Sales Strategy Traffic Cooperation • Actively seeking accommodation • Adjusting sales strategy from • Extending expatriation date of needs of quarantine, medical previous bran
Slide 7: H-Tone Provides A Solid Foundation for Efficient Remote Work
H-Tone Provides A Solid Foundation for Efficient Remote Work 华通作为华住数字化基座高效支撑远程办公作业模式 Franchisees • Providing virtualized hotel daily operation report Hotel Managers/Staffs Headquarter Employees Timely uploading daily hotel, staff • Enabling normal operation during and customers’ COVID-related lock
Slide 8: Building Capabilities to Ride Through the Ups and Downs of the Economic Cycles
Building Capabilities to Ride Through the Ups and Downs of the Economic Cycles 构建穿越周期的能力 8
Slide 9: By Caring Customers
By Caring Customers 客户关爱 Letters from Our Customers “… I did not know much about Hanting Hotel before. During this quarantine stay in Hanting, I felt safe and comfortable here. It was just like when I stayed at home. Hanting Hotel will be my first choice in the future, and I will also recommend Hant
Slide 10: By Caring Franchisees
By Caring Franchisees 加盟商关爱 Management Fee Franchisee Supply Chain Waiver & Deferral Assistance Support • Deferring payment (~RMB135mn*) • Assisting franchisees to apply for • Building-up special procurement and reduction of management fee value-added tax credit refund team to ensure sufficient food
Slide 11: By Caring Employees
By Caring Employees 员工关爱 Front-Line Staff Training and Special COVID Retention Development Foundation • Providing various promotion • Regarding front-line staff as • Establishing a Special COVID channels for employees to valuable asset to our company foundation to support/reward achieve better caree
Slide 12: Sustainable Quality Growth Strategy Remains Unchanged
Sustainable Quality Growth Strategy Remains Unchanged 坚定精益增长战略不动摇 12
Slide 13: Further Penetrating to Lower Tier Cities
Further Penetrating to Lower Tier Cities 低线城市持续渗透 Hotels Breakdown Number of New City Coverage (as of March 31) Signings (hotels in operation and in pipeline) 7,868 2,226 535 513 Tier-1 cities, 12% 2,200 37% 55% Tier-2 cities, 302 32% 1,089 40% 43% 871 31% 34% Tie-3 162 and below 20% cities, 12% 56%
Slide 14: Legacy-DH Achieved Robust RevPAR Recovery Trend in 2022
Legacy-DH Achieved Robust RevPAR Recovery Trend in 2022 DH的RevPAR在2022年恢复势头良好 Blended RevPAR in 2022 as % of 2019 80% 65% 56% 47% Jan Feb Mar Apr * Numbers in this page refers to Legacy-DH business 14
Slide 15: Opening-up in Germany Accelerates DH Business Recovery
Opening-up in Germany Accelerates DH Business Recovery 德国重新开放加速DH业务恢复 Eased Restrictions Execution of Strategic Focus Accelerates Recovery Cost/Revenue Measure Post COVID • German occupancy recovery to • Continued execution of planned • Codification of cost reductions for cost reductions to mitigate
Slide 16: Agenda
AGENDA • 1Q2022 Business Update • 1Q2022 Operational and Financial Review • Liquidity and Guidance • Q and A • Appendix 16
Slide 17: Hotel Network Continued to Expand
Hotel Network Continued to Expand 酒店网络持续扩张 Hotel Network Expansion Hotel Turnover (Number of rooms in operation) (in RMB millions) hotels in operation hotel turnover +16% 764,859 +15% 662,512 Legacy-DH 9,485 24,366 8,150 Legacy-DH 683 Legacy-DH Legacy-DH 23,893 249 Legacy-Huazhu 8,802, Legacy-Huazhu
Slide 18: Legacy-Huazhu - Blended RevPAR Recovered to 74% of 2019 in Q1'22
Legacy-Huazhu - Blended RevPAR Recovered to 74% of 2019 in Q1’22 华住中国-一季度混合RevPAR恢复到2019年的74% ADR +7.2% yoy and +1.2% Compared to 2019 (RMB) 224 RevPAR -4.1% yoy and -25.7% Compared to 2019 221 (RMB) 209 178 138 132 Q1'19 Q1'21 Q1'22 OCC -7.0 p.p. yoy and -21.4 p.p. Compared to 2019 81% 66% Q1'19 Q1
Slide 19: Legacy-DH - Blended RevPAR Increased in Q1'22 YoY
Legacy-DH - Blended RevPAR Increased in Q1’22 YoY DH-一季度混合RevPAR同比增长 ADR +28.4% in Q1’22 (EUR) 88 69 RevPAR +158.8% in Q1’22 (EUR) 33 Q1’21 Q1’22 Occupancy +19.2 p.p. in Q1’22 13 38% 19% Q1’21 Q1’22 Q1’21 Q1’22 19
Slide 20: Revenue: Q1'22 Increased 15% YoY
Revenue: Q1’22 Increased 15% YoY 一季度营收同比增长15% In million RMB 1Q22 1Q21 YoY 4Q21 QoQ Manachised and Franchised Hotels Revenue as % of Revenue Revenue from Legacy - Huazhu 2,275 2,174 4.6% 2,776 -18.0% Q1’21 Q1’22 - Leased & Owned Hotels 1,258 1,255 0.2% 1,565 -19.6% Huazhu Group 38.5% 36.9% - Manachi
Slide 21: Q1'22 Operating Income Turned Negative
Q1’22 Operating Income Turned Negative 一季度经营利润亏损 In million RMB 1Q22 1Q21 YoY 4Q21 QoQ • Hotel operating cost increased Hotel operating costs 2,813 2,463 14.2% 3,194 -11.9% mainly due to continuous hotel network expansion of Legacy- - Legacy-Huazhu 2,255 2,018 11.7% 2,331 -3.3% Huazhu and business r
Slide 22: Adjusted EBITDA and Adjusted Net Income in Q1'22
Adjusted EBITDA and Adjusted Net Income in Q1’22 一季度调整后的EBITDA和净利润情况 In million RMB 1Q22 1Q21 YoY 4Q21 QoQ • Legacy-Huazhu’s Adj. EBITDA Adjusted EBITDA -333 -133 -150.4% 278 Nm loss in Q1 enlarged significantly due to the impact - Legacy-Huazhu -93 207 Nm 209 Nm of COVID-19 resurgence - Legacy-DH -
Slide 23: Agenda
AGENDA • 1Q2022 Business Update • 1Q2022 Operational and Financial Review • Liquidity and Guidance • Q and A • Appendix 23
Slide 24: Liquidity Position Update
Liquidity Position Update 流动性现状 Net Debt Cash Balance Unutilized Bank Facilities RMB 6.0bn RMB 4.1bn RMB 3.0bn • As of March 31, 2022 24
Slide 25: Guidance
Guidance 业绩指引 Q2 2022 Revenue vs. Q2 2021 • Decline 2%-6% • Excluding DH - Decline 23%-27% 25
Slide 26: Agenda
AGENDA • 1Q2022 Business Update • 1Q2022 Operational and Financial Review • Liquidity and Guidance • Q and A • Appendix 26
Slide 27: Agenda
AGENDA • 1Q2022 Business Update • 1Q2022 Operational and Financial Review • Liquidity and Guidance • Q and A • Appendix 27
Slide 28: Same-Hotel Operational Data by Segment
Same-Hotel Operational Data by Segment 同店经营数据 Operational hotels excluding hotels under requisition Number of hotels in operation Same-hotel RevPAR Same-hotel ADR Same-hotel Occupancy As of For the quarter ended For the quarter ended For the quarter ended March 31, March 31, March 31, March 31, yoy
Slide 29: Number of Hotels and Rooms
Number of Hotels and Rooms 酒店数量和房间数量 As of March 31, 2022 Total Hotels Rooms Unopened hotels in operation in pipeline Economy hotels 4,824 388,174 951 HanTing Hotel 3,096 277,885 608 Hi Inn 447 24,682 117 NiHao Hotel 83 5,772 178 Elan Hotel 965 55,421 2 Ibis Hotel 219 22,751 32 Zleep Hotels 14 1,663