Choice Hotels International, Inc. · NYSE:CHH
Choice Hotels International — Investor Presentation (June 2013)
30 slides from Choice Hotels International's investor presentation, Jun 4, 2013
Slide 1: June 2013
June 2013 Exhibit 99.1
Slide 2: Disclaimer
Disclaimer Certain matters discussed throughout all of this presentation constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Generally, our use of words such as “expect,” “estimate,” “believe,” “anticipate,” "should,“ “will,” “forecast,”
Slide 3: Company overview
Company overview
Slide 4: Choice Hotels overview
Choice Hotels overview Growing US hotel market share – 9.7% share of branded US hotels (+60 basis points over trailing 5 years)* – 2 largest U.S. hotelier* Well-known, diversified brands Global pipeline of 476 hotels Stable, profitable, long-term growth throughout economic cycles Cumulative free cas
Slide 5: Diversified global footprint
Diversified global footprint* Source: Choice internal data *As of March 31, 2013. The Company includes its Caribbean properties within domestic operating statistics.
Slide 6: Portfolio overview
Upscale Upper Midscale Midscale Extended Stay Economy Portfolio overview Brand Number of properties Number of rooms Occupancy (%) Average daily room rate (ADR) RevPAR 5,481 65.2% $115.20 $75.09 2,221 NA NA NA 1,332 104,159 59.7% 81.99 48.95 46,079 62.2% 85.88 53.43 27,268 50.1% 75.06 37.57 27,685 57
Slide 7: Franchise portfolio growth
Franchise portfolio growth Worldwide hotels* Domestic pipeline* Worldwide unit growth has increased at a CAGR of 2.2% over the last 5 years Executed a total of 492 new domestic hotel franchise contracts during the trailing twelve months ended March 31, 2013, a 45% increase over the prior year Curren
Slide 8: Strategy for Choice's brands, growth and shareholders
Strategy for Choice’s brands, growth and shareholders Improve and Grow Brands – Increase portfolio profitability of the Comfort brand family – Refresh Sleep Inn to improve long-term brand growth potential – Invest in and expand emerging brands/segments – Cambria, Ascend, International Capture Greate
Slide 9: Investment highlights
Investment highlights
Slide 10: Investment highlights summary
Established hotel franchising platform with global scale Resilient fee-for service business model with stable cash flows Strong and growing brand awareness. Asset light franchisin model with strong > Strong, growing loyalty returns on investment program Strong pipeline expected to continue to Effect
Slide 11: Established hotel franchising platform with global scale
Established hotel franchising platform with global scale One of the largest hoteliers… … with a significant number of rooms in the portfolio Source: Various public companies’ filings as of March 31, 2013, except for Hilton, Accor and Carlson which are as of December 31, 2012.
Slide 12: Resilient fee-for-service business model with stable cash flows
Resilient fee-for-service business model with stable cash flows Source: Smith Travel Research, Management data, December 2012
Slide 13: Strong, growing loyalty program
Strong, growing loyalty program Choice Privileges revenue as percent of domestic gross room revenues* Source: Management Data, December 31, 2012, Company’s public filings * 2001-2008 Data Excludes Econo Lodge and Rodeway Inn brands Comprehensive loyalty rewards program 16.5 million members worldwide
Slide 14: Effective marketing and central reservation system
Effective marketing and central reservation system Consists of the telephone reservation system, proprietary internet site, mobile phone applications, global distribution systems and other internet reservation sites Central Reservation System (“CRS”) provides a data link to the Company’s franchised
Slide 15: Strong pipeline expected to continue to grow as the global economy improves
Strong pipeline expected to continue to grow as the global economy improves Historical international pipeline Source: Company’s public filings, Management data as of December 31, Historical domestic pipeline
Slide 16: Asset light franchising model with strong returns on investment
Asset light franchising model with strong returns on investment Capital light model generates strong after-tax returns on invested capital Virtually 100% of the properties are franchised* * The Company owns a limited number of hotels that it holds for strategic purposes. Source: Company’s public fil
Slide 17: Strong and growing brand awareness
Strong and growing brand awareness Source: Percentage of survey respondents. Millward Brown, December 2012. * Econo Lodge, Rodeway Inn and Suburban Extended Stay measured among economy hotel users.
Slide 18: Financial overview
Financial overview
Slide 19: Choice's franchise business model provides stable, growing cash flows
Choice’s franchise business model provides stable, growing cash flows, driven primarily through unit expansion, RevPAR growth and effective royalty rate growth Recent performance LTM Revenue LTM Adjusted EBITDA Choice has experienced consistent revenue growth over the past eight quarters Revenues ha
Slide 20: Historical operating metrics
Historical operating metrics RevPAR & occupancy Total worldwide rooms Source: Company’s public filings
Slide 21: Historical financial overview
Historical financial overview Revenue* Adjusted EBITDA *Excludes marketing and reservation revenues Source: Company’s public filings ($ in millions)
Slide 22: Questions and answers
Questions and answers
Slide 23: Disclaimer
DISCLAIMER Adjusted earnings before interest, taxes depreciation and amortization (EBITDA), return on average invested capital (ROIC) and free cash flows are non-GAAP financial measurements. These financial measurements are presented as supplemental disclosures because they are used by management in
Slide 24: Franchising revenues
FRANCHISING REVENUES Source: Choice Internal Data, December 2012 ($ amounts in thousands) Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, December 31, December 31, December 31, December 31, Total Revenues 691
Slide 25: Slide 25
Slide 26: Return on invested capital
RETURN ON INVESTED CAPITAL (a) Operating income and tax rate for the year ended December 31, 2001 have been adjusted to exclude the effect of a $22.7 million impairment charge related to the write-off of the company’s investment in Friendly Hotels. Source: Choice Internal Data, December 2012 Year En
Slide 27: Slide 27
Slide 28: Free cash flows
FREE CASH FLOWS Source: Choice Internal Data, March 31, 2013 Year to Date Ended Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended March 31, December 31, December 31, December 31, December 31, December 31, December 31, December 31, December 31, ($ in thousands) N
Slide 29: Slide 29
Slide 30: Adjusted EBITDA
Source: Choice Internal Data, March 31, 2013 ADJUSTED EBITDA LTM Year Ended Year Ended Year Ended Year Ended Year Ended ($ in thousands) March 31, December 31, December 31, December 31, December 31, December 31, Operating Income 192,543 $ 193,142 $ 171,863 $ 160,762 $ 148,073 $ 174,596 $ Adjustments
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