Choice Hotels International, Inc. · NYSE:CHH
Choice Hotels International — Investor Presentation (March 2016)
27 slides from Choice Hotels International's investor presentation, Mar 10, 2016
Slide 1: Investor Presentation March 2016
Investor Presentation March 2016
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 Page 3 Investor Presentation
Slide 4: Choice Hotels Overview
Choice Hotels Overview Page 4 Investor Presentation • Growing U.S. hotel market share – 9.8% share of branded U.S. hotels (+30 basis points over trailing 5 years)* – 2nd largest U.S. hotelier* • Well-known, diversified brands • Global pipeline of 720 hotels, ~58,000 rooms Strong, growing, global hot
Slide 5: Diversified global footprint
Diversified global footprint Page 5 Investor Presentation United States & Caribbean Hotels open 5,276 Hotels under development 606 Rooms open & under dev. 446,813 Canada Hotels open 323 Hotels under development 45 Rooms open & under dev. 30,135 South America Hotels open 64 Hotels under development 7
Slide 6: Portfolio Overview
Page 6 Investor Presentation Portfolio Overview Brand Number of properties Number of rooms Occupancy (%) Average daily room rate (ADR) RevPAR Upscale 112 9,455 58.5% $127.27 $74.47 25 3,113 NA(a) NA(a) NA(a) Upper Midscale 1,156 89,545 65.0% 89.68 58.25 569 43,949 68.3% 93.89 64.16 175 24,449 57.2%
Slide 7: Franchise Portfolio Growth
Page 7 Investor Presentation Franchise Portfolio Growth • Worldwide unit growth has increased at a CAGR of 0.9% over the last 5 years • Executed a total of 630 new domestic hotel franchise contracts in 2015. Worldwide hotels* • Current domestic pipeline consists of 606 hotels, representing 46,441 ro
Slide 8: Strategy for Choice's brands, growth and shareholders
Page 8 Investor Presentation 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, Ascen
Slide 9: Investment Highlights
Page 9 Investor Presentation Investment Highlights
Slide 10: Investment Highlights
Page 10 Investor Presentation Investment Highlights Established hotel franchising platform with global scale Resilient fee-for service business model with stable cash flows Strong, growing loyalty program Effective central reservation system Strong pipeline expected to continue to grow as global eco
Slide 11: Established hotel franchising platform with global scale
Page 11 Investor Presentation 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 December 31, 2015. 7,812 6,423 5,032 4,565 4,366 3,873 1,282 886 599 0 1,000 2,00
Slide 12: Resilient fee-for-service business model with stable cash flows
Page 12 Investor Presentation Resilient fee-for-service business model with stable cash flows Source: Smith Travel Research, Management data, December 31, 2015. $0 $50 $100 $150 $200 $250 $300 $350 $400 (20.0%) (15.0%) (10.0%) (5.0%) 0.0% 5.0% 10.0% 15.0% 2005 2006 2007 2008 2009 2010 2011 2012 2013
Slide 13: Strong, growing loyalty program
Page 13 Investor Presentation Strong, growing loyalty program Choice Privileges revenue as percent of domestic gross room revenues* • Comprehensive loyalty rewards program • 25 million members worldwide – contribute approximately 1/3 of domestic gross room revenues • ~3.2 million new members added w
Slide 14: Effective marketing and central reservation system
Page 14 Investor Presentation 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
Slide 15: Strong pipeline expected to continue to grow
Page 15 Investor Presentation Strong pipeline expected to continue to grow as the global economy improves Historical international pipeline Historical domestic pipeline Source: Company’s public filings, Management data as of December 31, 2015. 0 50 100 150 200 250 300 350 400 450 500 Conv. New Const
Slide 16: Asset light franchising model with strong returns on investment
Page 16 Investor Presentation Asset light franchising model with strong returns on investment Capital light model generates strong after-tax returns on invested capital 100% of the properties are franchised Source: Company’s public filings, Management data as of December 31, 2015. 15.2% 16.1% 14.7%
Slide 17: Strong and consistent brand awareness
Page 17 Investor Presentation Strong and consistent brand awareness ® ® ® ® ® ® ® ® ® Source: Millward Brown, December 2015. 98% 92% 73% 93% 78% 88% 64% 45% 22% 29% 71% 2015
Slide 18: Financial Overview
Page 18 Investor Presentation Financial Overview
Slide 19: Recent performance
Page 19 Investor Presentation Recent performance Choice’s franchise business model provides stable, growing cash flows, driven primarily through unit expansion, RevPAR growth and effective royalty rate growth • Choice has experienced consistent revenue growth over the past eight quarters. Franchis
Slide 20: Historical Operating Metrics
Page 20 Investor Presentation Historical Operating Metrics RevPAR & occupancy Total worldwide rooms Source: Company’s public filings. $36.29 $38.63 $40.94 $42.20 $45.80 $48.78 51.5% 53.7% 55.6% 56.4% 59.5% 61.1% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% $- $10.00 $20.00 $30.00 $40.00 $50.00 $60
Slide 21: Historical Financial Overview
Page 21 Investor Presentation Historical Financial Overview Franchising Revenue Source: Company’s public filings. Adjusted EBITDA $169.2 $180.0 $201.2 $205.3 $223.9 $236.9 $- $50 $100 $150 $200 $250 2010 2011 2012 2013 2014 2015 ($ in m ill io n s ) $263.7 $286.5 $303.1 $317.0 $344.8 $366.7 $0 $50 $
Slide 22: Historical Financial Overview
Page 22 Investor Presentation Historical Financial Overview *Capital expenditures reflect tenant improvements related to the Company leasing extra space for a new technology center in Phoenix, AZ and the relocation of the Company’s corporate offices to Rockville, MD during 2010 and 2013 respectively
Slide 23: Questions and Answers
Page 23 Investor Presentation Questions and Answers
Slide 24: Disclaimer
Disclaimer Adjusted earnings before interest, taxes depreciation and amortization (EBITDA), return on average invested capital (ROIC), franchising revenues and free cash flows are non-GAAP financial measurements. These financial measurements are presented as supplemental disclosures because they are
Slide 25: Franchising Revenues
Franchising Revenues Page 25 Investor Presentation Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended ($ in thousands) December 31, December 31, December 31, December 31, December 31, December 31, 2015 2014 2013 2012 2011 2010 Total Revenues $ 859,878 $ 757,970 $ 724,650 $ 692,728 $ 6
Slide 26: Return on Invested Capital
Return on Invested Capital Page 26 Investor Presentation
Slide 27: Adjusted EBITDA
Adjusted EBITDA Page 27 Investor Presentation
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