Covivio Hotels Sca · EURONEXT:COVH
Covivio Hotels Sca — Covivio Hotels — Debt Investor Presentation (May 2024)
48 slides from Covivio Hotels Sca's debt investor presentation, May 15, 2024
Slide 1: Covivio Hotels Credit Presentation
Grand Hôtel Palazzo dei Dogi - Venezia Kimpton Fitzroy - London COVIVIO HOTELS CREDIT PRESENTATION Anantara Plaza - Nice Mercure Tour Eiffel - Paris
Slide 2: Speakers
SPEAKERS Tugdual Millet Paul Arkwright CEO Covivio Hotels Covivio Group CFO
Slide 3: Summary
SUMMARY I. A PRIME HOTELS PORTFOLIO IN EUROPE 4 II. HIGH 2023 REVENUE & RESULTS GROWTH 12 III. STRONG BALANCE SHEET 16 IV. PIONEER IN SUSTAINABILITY 20 V. FAVOURABLE OUTLOOK 27
Slide 4: I. A Prime Hotels Portfolio in Europe
I. A PRIME HOTELS PORTFOLIO IN EUROPE Palazzo Naiadi - Rome
Slide 5: A 20-Year Experience in Hotel Real Estate
A 20-YEAR EXPERIENCE IN HOTEL REAL ESTATE… COVIVIO HOTELS IS LEADER IN HOTEL REAL ESTATE IN EUROPE # 1 # 2 # 3 # 4 - EXPANSION AND PORTFOLIO UPSCALING, COVID A NEW EXPANSION THROUGH SALE & LEASEBACKS - MANAGING ALL REAL ESTATE VALUE CHAIN BREAK GROWTH PHASE (LEASE & MANAGEMENT CONTRACTS) Creation of
Slide 6: Creating a €5.8bn Hotels Platform
…CREATING A €5.8 BN HOTELS PLATFORM EXPOSURE TO THE MAJOR EUROPEAN CITIES €5.8BN UK / Ireland 14% Belgium / Netherlands 8% Germany 24% COVIVIO HOTELS Glasgow PORTFOLIO Edimburgh 5.9% Hamburg Manchester Amsterdam Berlin Brussels Leipzig London Dresden AVERAGE YIELD Lille Frankfurt Prague Hungary / Fr
Slide 7: A Diversified and Well Balanced Portfolio
A DIVERSIFIED AND WELL BALANCED PORTFOLIO Exposure to Major European Well balanced A diversified portfolio Strong partnerships with markets, in strategic locations contract types in terms of segments Major Operators 14% 14% Others Belgium 5% 43% 32% 5% variable 7% 11% Spain Upscale 8% 74% 13% Upscal
Slide 8: Prime and Strategic Positioning for Hotel Operators
WITH A PRIME AND STRATEGIC POSITIONING FOR HOTEL OPERATORS Non-replicable prime locations 8.9/10 Average Booking.com 89% Located in Major Tourist Location grade destinations GEOGRAPHY CONTRACT TYPE Strong diversification In terms of SEGMENTS OPERATORS Solid operator Base Working with 12 Years leadin
Slide 9: Top 10 Hotels Assets – 1/2
TOP 10 HOTELS ASSETS (25% OF THE PORTFOLIO) – 1/2 ParkInn Alexanderplatz, Berlin, 4 stars Kimpton Fitzroy, London, 5 stars The Westin Grand Berlin, 5 stars 1,028 rooms - Operating property 334 Rooms - Lease property 400 rooms - Operating property Palazzo Naiadi, Rome, 5 stars Le Méridien, Nice, 4 st
Slide 10: Top 10 Hotels Assets – 2/2
TOP 10 HOTELS ASSETS (25% OF THE PORTFOLIO) – 2/2 Eurostar Grand Marina, Barcelona, 5 stars Ibis Cambronne, Paris, 3 stars 291 rooms - Lease property 528 rooms – Lease property Kimpton Charlotte Square, Edinburg, 5 stars NY Palace, Budapest, 5 stars 199 rooms – Lease property 185 rooms - Lease prope
Slide 11: Resilient Asset Values
RESILIENT ASSET VALUES YIELD EQUAL TO 2015 LEVEL, FOR A HIGHER QUALITY (89% IN MAJOR EUROPEAN CITIES VS. 45%) HIGH YIELD ACROSS COUNTRIES 2023 2023 2023 2023 2022 2023 Value Yield 2023, In €million Value Like-for- Yield Yield €1.9 Bn 5.7% (CovH share) Like value €1.4 Bn 5.8% Lease properties 4,434 -
Slide 12: II. High 2023 Revenue & Results Growth
II. HIGH 2023 REVENUE & RESULTS GROWTH Grand Hôtel Palazzo dei Dogi - Venice
Slide 13: +13% Like-for-Like Revenue Growth in 2023
+13% LIKE-FOR-LIKE REVENUE GROWTH IN 2023 Fully benefitting from FIXED LEASES 57% OF HOTELS PORTFOLIO +9% indexation and asset management LIKE-FOR-LIKE VARIABLE LEASES 20% +19% LIKE-FOR-LIKE Fully benefitting from high recovery OPERATING PROPERTIES 23% +19% LIKE-FOR-LIKE 13
Slide 14: Recurring Net Result: +8% vs. 2022 and +14% vs. 2019
RECURRING NET RESULT: +8% VS. 2022 AND +14% VS. 2019 Change Change Change (€ million, Group share) 2019 2022 2023 vs 2022 Vs 2022 (%) Vs 2019 (%) Rental revenues 225.1 226.1 251.1 +25.0 Cost on buildings -5,1 -5.5 -5.9 -0.4 Net costs on credit losses 0.0 10.7 -0.5 -11.3 Net rental income 220.0 231.3
Slide 15: To Be Continued in 2024: +5% LFL Revenue Growth in Q1
TO BE CONTINUED IN 2024: +5% LFL REVENUE GROWTH IN Q1 Fixed +5% +4.6% leases 57% PORTFOLIO Like-for-like LIKE-FOR-LIKE Indexation on fixed rents Continued growth of the hotel Variable revenues Benefits from asset management revenues +3% works 43% Like-for-like 15
Slide 16: III. Strong Balance Sheet
III. STRONG BALANCE SHEET Kimpton Fitzroy – London
Slide 17: Healthy Balance Sheet
HEALTHY BALANCE SHEET Improved debt metrics compared to pre-pandemic levels 2019 2023 LTV Including duties 34.9% 34.4% LTV S&P1 Debt/(Debt+Equity) 43.2% 41.6% S&P RATING COST OF DEBT 2.2% 2.4% BBB+, STABLE OUTLOOK ICR 5.1x 5.4x STANDALONE RATING NET DEBT / EBITDA 8.6x 8.5x IMPROVED TO BBB- ON APRIL
Slide 18: With a Diversified Debt Profile
WITH A DIVERSIFIED DEBT PROFILE DIVERSIFIED DEBT PROFILE Diversified maturities Debt maturities (in €million, in Covivio Hotel’s shares) CORPORATE LOANS 800 9% 698 662 719 600 BONDS 400 37% 234 200 146 109 13 0 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 + Corporate credit lines Mort
Slide 19: Covivio Underpinning Covivio Hotels BBB+ Rating
COVIVIO UNDERPINNING COVIVIO HOTELS BBB+ RATING LONGSTANDING AND SUPPORTIVE SHAREHOLDERS Shared Financing Risks ❑ Cross default financing clauses between Covivio Hotels and Covivio: a default at Covivio Hotels level triggering default at Covivio level (both in Covivio 16% Crédit Agricole Assurances
Slide 20: IV. Pioneer in Sustainability
IV. PIONEER IN SUSTAINABILITY Mercure Tour Eiffel – Paris
Slide 21: A Tailor-Made ESG Strategy for Hotels Real Estate
A TAILOR-MADE ESG STRATEGY ADDRESSING HOTELS REAL ESTATE SECTOR SPECIFICITIES Specific ESG challenges …Covivio Hotels specific ESG approach of the Hotels Real Estate sector… GHG emissions and energy consumption Ambitious decarbonation and energy reduction related to hotel operations trajectories of
Slide 22: A High-Performance Portfolio Aligned with a 1.5°C Scenario
A HIGH-PERFORMANCE PORTFOLIO ALIGNED WITH A 1.5°C SCENARIO CARBON INTENSITY OF THE COVIVIO HOTELS PORTFOLIO in kgCO2e/m2 at operating asset level incl. the GHG emissions related to energy consumption of the hotel operators In line with a 1.5°C scenario 80 70 -70% targeted between 60 2010 and 2030 50
Slide 23: Beyond Carbon, Addressing Overall Environmental Impact
BEYOND CARBON, ADDRESSING OVERALL ENVIRONMENTAL IMPACT Targets 2023 achievements Key highlights 308 kWhpe/m²/year Longstanding commitment in the energy efficiency of its in energy consumption by 2030 277 kWhpe/m²/year portfolio, with already -55% achieved since 2010 Hotel operators awareness on this
Slide 24: Sustainable Bond Framework Set in 2023
SUSTAINABLE BOND FRAMEWORK SET IN 2023 GREEN BOND PRINCIPLES 1 USE OF PROCEEDS: to finance and/or refinance Eligible Green Portfolio (Eligible Green assets, capital and selected operational expenditures, and investments) 2 PROCESS FOR PROJECT EVALUATION AND SELECTION: Green Bond Committee (“GBC”) wi
Slide 25: Overview of Covivio Hotels' Eligibility Criteria
OVERVIEW OF COVIVIO HOTELS’ ELIGIBILITY CRITERIA RENEWABLE ENERGY & ENERGY GREEN HOTEL BUILDINGS EFFICIENCY MEASURES Acquisition & Best market Renovation Construction Eligible Green Criteria Ownership practices On-site following equipment and GHG intensity thresholds as defined instruments that comp
Slide 26: A €3.8bn Eligible Green Portfolio
A €3.8BN (€2.9BN NET1) ELIGIBLE GREEN PORTFOLIO €3.8bn value 99.8% of refinancing of Green Assets eligible under the Acquisition & Ownership 230 eligible hotels criteria and 0.2% of energy efficiency CAPEX invested on the portfolio GEOGRAPHY DISTRIBUTION ELIGIBILITY CRITERIA DISTRIBUTION OPERATORS D
Slide 27: V. Favourable Outlook
V. FAVOURABLE OUTLOOK B&B Porte des Lilas - Paris
Slide 28: Hotels Market – Strong Performances in 2023, Well Above 2019
HOTELS MARKET – STRONG PERFORMANCES IN 2023, WELL ABOVE 2019 HOTELS INDUSTRY RAPIDLY ERASES CRISES AND IS A POWERFUL INFLATION HEDGE Increasing REVPAR in 2023… Strong average prices… …And improving occupancy vs. 2022 vs. 2019 vs. 2022 vs. 2019 vs. 2022 vs. 2019 +16% +20% +8 % +23% +5.5pt -1.8pt +28%
Slide 29: Hotels Market – Growth to Continue in 2024
HOTELS MARKET – GROWTH TO CONTINUE IN 2024 Q1 2024 Q1 2024 Q1 2024 REVPAR ADR OCCUPANCY vs. 2023 vs. 2023 vs. 2023 +2% +1% +0.6pt +8% +6% +1.3pt +2% +2% +0.1pt +5% +3% +1.2pt +17% +11% +3.6pt +7% +2% +2.7pt Palazzo Naiadi - Roma 29
Slide 30: Hotels Market – Structural Tailwinds (1/2)
HOTELS MARKET – STRUCTURAL TAILWINDS (1/2) REVPAR BEAT GDP OVER THE LONG TERM & BENEFIT FROM RECOVERY POST CRISIS RevPAR and GDP over 2000 - 2023 180 173 France RevPAR CAGR: +2.4% ✓ RevPAR Outperformance vs.GDP over a 23-year period 160 151 Europe RevPAR CAGR: +1.8% ✓ Limited volatility except GFC 1
Slide 31: Hotels Market – Structural Tailwinds (2/2)
HOTELS MARKET – STRUCTURAL TAILWINDS (2/2) FAVORABLE DEMAND AND SUPPLY IMBALANCE ❑ Overnight stays are expected to grow by +5%/year until Number of rooms under construction vs. existing stock 2030, +6% from international demand / +3% for domestic demand Overnight stays CAGR 2023-2030 5.0% +5%/year ❑
Slide 32: Hotels Market – One of the Most Resilient Investment Markets
HOTELS MARKET – ONE OF THE MOST RESILIENT INVESTMENT MARKET HOTELS: A HIGH REQUESTED ASSET CLASS LATEST TRANSACTIONS ~10% of real estate investments volumes 2 times higher than healthcare sector Edwardian UK Radisson Hotels Portfolio (10 hotels - 2,048 rooms) Increasing appetite of new investors exp
Slide 33: Hotels – Strategic Priorities
HOTELS – STRATEGIC PRIORITIES #1 Extract full potential of our hotels, benefitting from industry growth #2 Continue to boost performances through asset management operations Asset swap with AccorInvest Capex programs 33 Santa Lucia – Venice
Slide 34: Ongoing Major Asset Deal with AccorInvest (1/2)
ONGOING MAJOR ASSET DEAL WITH ACCORINVEST (1/2) AN ASSET SWAP FOR GREATER AGILITY AND HIGHER RETURNS Deal description Top 8 OpCos acquired / 75% of Total In November, Covivio Hotels entered into exclusive talks with AccorInvest to buy OpCos while selling PropCos. +€260m Acquisition of ~€1.0bn 24 OpC
Slide 35: Ongoing Major Asset Deal with AccorInvest (2/2)
ONGOING MAJOR ASSET DEAL WITH ACCORINVEST (2/2) AN ASSET SWAP FOR GREATER AGILITY AND HIGHER RETURNS Owning OpCos & PropCos Earnings accretion A creates value and gives more flexibility & # 1 From Year 1 win/win deal DEAL RATIONALE profitability on investments MAIN IMPACTS High yielding and value- #
Slide 36: Asset Management Upside in the Other Parts of the Portfolio
ASSET MANAGEMENT UPSIDE IN THE OTHER PARTS OF THE PORTFOLIO FIXED LEASES OPERATING PROPERTIES New lease agreement Lease extension Ongoing capex programs Melià NH Collection For 3 assets in Spain In Madrid, Spain 15 years +9 years New lease Lease extension €15M 9% >30% +15% Capex Yield on Capex Rent
Slide 37: Key Takeaways
KEY TAKEWAYS THE ONLY EUROPEAN HOTEL REIT IN THE INVESTMENT GRADE BOND MARKET STRONG BUSINESS PROFILE HEALTHY FINANCIAL PROFILE 1 # Strong performance +13% LfL rental growth in 2023 #1 Maintained low Loan-to-value (34.4%) # 2 Growing results and above 2019 levels # 2 Improved ND/EBITDA (8.5x) # 3 Re
Slide 38: Appendix
APPENDIX 38
Slide 39: A Leader in Europe
A LEADER IN EUROPE European Hotel Property companies (ranked by Number of rooms) 43,600 36,000 30,000 23,000 23,000 23,000 22,000 15,000 Covivio Blackstone Aroundtown Pandox DekaBank London+Regional APG Union Investment Sources: Companies, GreenStreet 39
Slide 40: Selected Examples of Operating Successes
SELECTED EXAMPLES OF OPERATING SUCCESSES Variable leases Operating properties Significant increase in rents in 2023, driven by strong performances in Strong performances in 2023 despite rising costs, driven by France (Paris) and Belgium France and Germany Rents EBITDA Change 2023 vs 2022 +17% +21% +
Slide 41: Portfolio
PORTFOLIO Value 2022 Value 2023 Value 2023 LfL 1 Yield % of (In € million. Excluding Duties) Yield 2023 Group Share 100% Group share change 2022 total value France 1,656 2,117 1,597 -3.6% 4.7% 5.6% 28% Paris 717 833 703 Greater Paris (excl. Paris) 311 461 290 Major regional cities 385 511 375 Other
Slide 42: P&L
P&L € million- Consolidated data 31/12/2022 31/12/2023 Variation Rents 239 264 25 Rental charges not recovered -3 -3 0 Expenses on Buildings -3 -3 0 Net bad debt expenses 11 -1 -11 NET RENTS 244 257 13 Revenue from hotels under management 228 287 59 Operating expenses of hotels under management -166
Slide 43: Balance Sheet
BALANCE SHEET € million - Consolidated data 31/12/2022 31/12/2023 € million - Consolidated data 31/12/2022 31/12/2023 INTANGIBLE ASSETS Capital 593 593 Goodwill 120 117 Premiums 1,701 1,660 Other intangible assets 0 0 Treasury shares 0 0 TANGIBLE ASSETS Consolidated reserves 806 1,147 Operating buil
Slide 44: Covivio Hotels EU Taxonomy Alignment Analysis
COVIVIO HOTELS EU TAXONOMY ALIGNMENT ANALYSIS In 2023, Covivio Hotels performed an analysis of its taxonomy eligible and aligned CAPEX and revenues (methodology and results reviewed by EY) And worked with a third party to study the compliance of its procedures and policies in terms of minimum safegu
Slide 45: Green Eligible Portfolio Performance Analysis
GREEN ELIGIBLE PORTFOLIO PERFORMANCE ANALYSIS ENERGY PERFORMANCE GHG EMISSIONS GREEN BOND VS. COVIVIO HOTELS GREEN BOND VS. COVIVIO HOTELS VS. MARKET* VS. MARKET* PORTFOLIO TOTAL PORTFOLIO PORTFOLIO TOTAL PORTFOLIO 173 184 211 20.5 24.9 39.2 kWhfe/m2/year kWhfe/m2/year kWhfe/m2/year kgCO2e/m2/year k
Slide 46: Top Hotels Included in the Eligible Portfolio
TOP 10 HOTELS INCLUDED IN THE ELIGIBLE PORTFOLIO 1. Palazzo Naiadi - Roma 5. Ibis - Paris Cambronne 9. Ibis - Paris Bastille TOP 10 2. 3. Park Inn - Alexander Platz Méridien - Nice 6. 7. Club Med - Da Balaia NH - Amsterdam 10. Crowne Plaza - Brussels Airport HOTELS 4. The Westin Grand - Berlin 8. Th
Slide 47: Focus on CRREM Decarbonisation Pathways
FOCUS ON CRREM DECARBONISATION PATHWAYS The Project Carbon Risk Real Estate Monitor (CRREM) provides the real estate industry with transparent, science-based decarbonisation pathways aligned with the requirements of the Paris Agreement to limit global warming to a maximum of 1.5°C. ➔ Dynamic traject
Slide 48: Investor Relations Contacts
Vladimir MINOT Christina EDING Head of IR IR Vladimir.Minot@covivio.fr Christina.Eding@covivio.fr Tel: +33 1 58 97 51 94 Tel: +33 1 58 97 50 00 10, rue de Madrid 75008 - Paris covivio.eu
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