Hyatt Hotels Corporation · NYSE:H
Hyatt Hotels — Investor Day (May 2023)
25 slides from Hyatt Hotels's investor day presentation, May 11, 2023
Slide 1: Driving Financial Results
DRIVING FINANCIAL RESULTS JOAN BOTTARINI | EVP & CHIEF FINANCIAL OFFICER HOTEL FIGUEROA, CALIFORNIA HYATT AND RELATED MARKS ARE TRADEMARKS OF HYATT CORPORATION OR ITS AFFILIATES. © 2023 HYATT CORPORATION. ALL RIGHTS RESERVED. 1
Slide 2: Disclaimers
DISCLAIMERS 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
Slide 3: Transforming Our Earnings Profile
Operational and Commercial Execution Leading to Record Performance and Free Cash Flow † Strong Outlook Supported by Optimal Positioning and TRANSFORMING Investment in Capabilities OUR EARNINGS Industry Leading Growth Driven by Powerful Network Effect and Brand Preference PROFILE Capital Allocation S
Slide 4: Achieved Strong Operational & Financial Results in 2022
PARK HYATT SYDNEY, AUSTRALIA A C H I E V E D S T R O N G O P E R AT I O N A L & F I N A N C I A L R E S U LT S I N 2 0 2 2 Operational Results Cash Flow & Capital Allocation $ 908M + $94M + $63M $ 473M $ 717M Adjusted EBITDA † Net Deferrals ◊ Net Financed Contracts ◊ Free Cash Flow † Proceeds from D
Slide 5: Hyatt Is Positioned for Strong Growth in 2023
HYATT IS POSITIONED FOR PARK HYATT SHANGHAI, CHINA STRONG GROWTH IN 2023 Q 1 2 0 2 3 R E S U LT S +43% +33% System-wide RevPAR ◊ vs LY System-wide Net Package RevPAR ◊ vs LY +6% +3% System-wide RevPAR ◊ vs 2019 Levels Asia Pacific RevPAR ◊ vs 2019 Levels F U L L - Y E A R 2 0 2 3 PA C E +24% +15% Gr
Slide 6: Outlook for 2023 Implies Another Year of Record Results
OUTLOOK FOR 2023 IMPLIES ANOTHER YEAR OF RECORD RESULTS 2023 OUTLOOK Adjusted EBITDA † + Net Deferrals ◊ + Net Financed Contracts ◊ (USD in millions) + 23 % 1,225 +6% -1% 60 23 % +3% +4% Gr owth Dr iven by 120 +10% 63 65 1,000 2023 Outlook 94 63 94 Asset Light Accounts for: 12%-16% 75% of Growth Sys
Slide 7: Full-Year 2023 Outlook Is Strong
FULL-YEAR 2023 OUTLOOK IS STRONG 12-16% ~6% ~$225M ~$550M RevPAR ◊ Range Net Rooms Growth Net Income Free Cash Flow † $1,020M to + ~$120M + ~$60M $1,070M Net Deferrals ◊ Net Financed Contracts ◊ Adjusted EBITDA † ALILA HINU BAY, OMAN The Company’s 2023 outlook is based on a number of assumptions tha
Slide 8: Growth Expected to Continue in 2024 & 2025
GROWTH EXPECTED TO CONTINUE IN 2024 & 2025 E X P E C T E D I L L U S T R AT I V E C A G R : 2 0 2 4 - 2 0 2 5 System-wide RevPAR ◊ Net Package RevPAR ◊ Net Rooms Growth 3% - 7 % 3% - 7 % 6% - 7 % ALG Vacations Depar tur es M ove Dir ectionally UVC Signed Contr acts M ove Dir ectionally with Net Pack
Slide 9: 2025 Illustrative Outlook Reflects Strong Momentum
2025 ILLUSTRATIVE OUTLOOK REFLECTS STRONG MOMENTUM 12 % Adjusted EBITDA † + Net Deferrals ◊ + Net Financed Contracts ◊ (USD in millions) CAGR - - 2024 & 2025 1,400 70 + 12 % CAGR 120 2024-2025 Outlook 60 100 1,125 120 60 5% 120 System-wide RevPAR ◊ & Net 1,210 Package RevPAR ◊ Growth Asset Light Acc
Slide 10: Earnings Model Sensitivities Reflect a More Resilient, Asset Light Business
EARNINGS MODEL SENSITIVITIES REFLECT A MORE RESILIENT, ASSET LIGHT, & FREE CASH FLOW † GENERATIVE BUSINESS KEY METRICS EARNINGS MODEL SENSITIVITIES FOR 2024 AND 2025 System-wide RevPAR ◊ Fee-Based Adjusted EBITDA† O&L Adjusted EBITDA† +/- 1 point ~$ 8 – $ 12M ~$ 3 – $ 5M Net Package RevPAR ◊ +/- $ 1
Slide 11: Asset-Light, Fee-Driven Model Increases Cash Flow and Reduces Volatility
ASSET-LIGHT, FEE-DRIVEN MODEL INCREASES CASH FLOW AND REDUCES VOLATILITY 9% Benefits of Asset-Light Business >80% 11% Model 2025 • More Predictable Earnings Stream Asset-Light Earnings Mix ◊ Driven by Top-Line Revenue Estimated Mix by Source1 <20% • Long-Term Durable Contracts $1.2B • Low Capital In
Slide 12: Asset Light Transformation Drives Lower Capital Expenditures
ASSET LIGHT TRANSFORMATION DRIVES LOWER CAPITAL EXPENDITURES… 2025 ILLUSTRATIVE OUTLOOK (In millions, USD) 1,400 70 120 1,065 63 1,210 ~$200M 94 908 Run-Rate Capital Expenditures 792 Reduction since 2017 ~300 ~200 ~100 >33pt 0 2017 2022 2025E Midpoint Asset-Light Earnings Mix ◊ Increase As s et-Li g
Slide 13: …and Higher Free Cash Flow Conversion
…AND HIGHER FREE CASH FLOW CONVERSION ◊ 2025 ILLUSTRATIVE OUTLOOK (In millions, USD) 1,400 70 120 1,065 1,210 ~$450M 63 94 Free Cash Flow † Growth 908 since 2017 792 54% 44% ~17pt ~750 37% 473 289 0 Free Cash Flow 2017 2022 2025E Conversion ◊ Percentage Increase Midpoint since 2017 Adjusted EBITDA †
Slide 14: Free Cash Flow Results in Significant Cumulative Cash Generation
FREE CASH FLOW † RESULTS IN SIGNIFICANT COMMUNE BY THE GREAT W ALL, CHINA CUMULATIVE CASH GENERATION OVER THE NEXT THREE YEARS 2023E – 2025E CUMULATIVE RANGE at the Midpoint Adjusted EBITDA † + Net Deferrals ◊ + Net Financed Contracts ◊ ~$3.8B Illustrative Outlook Range Free Cash Flow † Illustrative
Slide 15: Significant Cash on Hand to Invest in Growth & Increase Shareholder Returns
ALILA HINU BAY, OMAN SIGNIFICANT CASH ON HAND TO INVEST IN GROWTH & INCREASE SHAREHOLDER RETURNS CUMULATIVE ILLUSTRATIVE 2023E TO 2025E Free Cas h Fl ow † Pos t-Tax O &L Di s pos i ti on Proc eeds ~$1.9B ~$1.1B $1.3B O&L Disposition Proceeds less ~15% assumed tax rate CASH AVAILABLE TO DRIVE VALUE ~
Slide 16: Invest for Growth: Prioritize Investments in Asset Light Platforms
INVEST FOR GROWTH: HYATT WILL CONTINUE TO PRIORITIZE INVESTMENTS IN ASSET LIGHT PLATFORMS Acquired 2017 Acquired 2018 Acquired 2021 Acquired 2023 $400M $467M $2.7B $125M Acquisition Price Acquisition Price Acquisition Price Acquisition Price 1 + Development CapEx ~8X Aggregate Earnings Multiple on P
Slide 17: Committed to Returning Capital Through Dividends & Share Repurchases
COMMITTED TO ALILA VILLAS ULUWATU, INDONESIA RETURNING CAPITAL THROUGH DIVIDENDS & EXCESS CASH THROUGH SHARE REPURCHASES QUARTERLY DIVIDEND REINSTATED SHARE REPURCHASE AUTHORIZATION $0.15 Hyatt resumes cash dividends, declaring a $0.15 per share cash dividend 1 for the $1.5B Hyatt increases authoriz
Slide 18: Committed to Investment Grade
HYATT PLACE PANAMA CITY BEACH / BEACHFRONT, FLORIDA COMMITTED TO INVESTMENT GRADE Debt Maturity by Year Total Debt: $3.1B $M USD Credit Ratings BBB- Baa3 BBB- Stabl e Stabl e Negati v e $1.5B Revolver 848 749 Liquidity 660 Strong position with: 452 404 $1.2B $1.5B Cas h, Cas h Equi v al ents , Rev o
Slide 19: Unlocking Value Through Asset Sales Is Core to Our Long-Term Strategy
UNLOCKING VALUE THROUGH ASSET SALES IS CORE TO OUR LONG-TERM STRATEGY 2017 2018 2019 2020 2021 2022 TOTAL Asset $305M 1 $1.4B $956M $11M $779M $852M $4.3B Sales HR Scottsdale GH San Francisco HR Atlanta HR Baku HR Lost Pines HR Indian Wells Royal Palms Resort AZ Maui GH Seoul HR Lake Tahoe GH San An
Slide 20: High Quality & Diverse Asset Base Provides Optionality
HIGH QUALITY & DIVERSE ASSET BASE PROVIDES OPTIONALITY FOR CURRENT COMMITMENT & BEYOND CURRENT PORTFOLIO OF OWNED ASSETS AT 13 – 15X MULTIPLE IMPLIES $3.9B – $4.5B OF VALUE IRREPLACEABLE LUXURY LUXURY WELLBEING/RESORTS GROUP/CONVENTION BUSINESS/OTHER 5 HOTELS 4 HOTELS 7 HOTELS 7 HOTELS MIRAVAL AUSTI
Slide 21: Irreplaceable Luxury
PARK HYATT CHICAGO PARK HYATT NEW YORK PARK HYATT ZURICH ~$500 ADR◊ ~$1,050 ADR◊ ~$750 ADR◊ IRREPLACEABLE LUXURY 5 Iconic Sought After Locations PARK HYATT PARIS-VENDÔME ANDAZ LONDON LIVERPOOL STREET ~$1,000 ADR◊ ~$3 5 0 ADR◊ Figures based on full year estimates for 2023 21
Slide 22: Luxury Wellbeing/Resorts
MIRAVAL ARIZONA MIRAVAL AUSTIN RESORT AND SPA RESORT AND SPA ~$1,800 TRevPOR ~$1,500 TRevPOR ~410 Acres ~240 Acres LUXURY WELLBEING/ RESORTS High barrier to entry resorts on MIRAVAL BERKSHIRES HYATT REGENCY ARUBA expansive acreage RESORT AND SPA RESORT SPA & CASINO ~$1,700 TRevPOR ~$600 ADR◊ ~380 Ac
Slide 23: Group & Convention Hotels
HYATT REGENCY ORLANDO GROUP & CONVENTION HOTELS ~204K SQ. FT UNIQUELY POSITIONED WITH OVER 400K SQ. FT OF AGGREGATE MEETING SPACE; STRONG GROUP DEMAND TRENDS WITH VERY LIMITED NEW CONVENTION HOTEL SUPPLY HYATT REGENCY BALTIMORE HYATT REGENCY PHOENIX HYATT REGENCY LONG BEACH INNER HARBOR ~36K SQ. FT
Slide 24: Shift Towards Asset Light Continues
SHIFT TOWARDS ASSET LIGHT CONTINUES ASSET-LIGHT EARNINGS MIX ◊ +2800 bps +500 bps 2026 & BEYOND 2017 2022 Illustrative Ongoing shift 2025 + 100bps 47 % 75 % > 80 % per year and ability to shift further through monetizing owned assets THE CAROLINA INN, NORTH CAROLINA Figures calculated as of each res
Slide 25: Transforming Our Earnings Profile
Operational and Commercial Execution Leading to Record Performance and Free Cash Flow † Strong Outlook Supported by Optimal Positioning and TRANSFORMING Investment in Capabilities OUR EARNINGS Industry Leading Growth Driven by Powerful Network Effect and Brand Preference PROFILE Capital Allocation S