H World Group Limited · HKEX:1179
H World — Q1 2023 Earnings Presentation
24 slides from H World's earnings presentation, May 31, 2023
Slide 1: First Quarter of 2023 Earnings Call
First Quarter of 2023 Earnings Call H World Group Limited (NASDAQ: HTHT and HKEX: 1179) May 30, 2023
Slide 2: Agenda
AGENDA 01 02 03 04 23Q1 Business 23Q1 Operational Q and A Appendix Update and Financial Review
Slide 3: Solid RevPAR Recovery after Re-opening
3 Solid RevPAR Recovery after Re-opening RevPAR Blended RevPAR in 2023 compared to 2019 RevPAR Recovery in 2023 Special effect from Spring Festival Holiday 140% 127% 120% 96% Jan Feb Mar Apr * Numbers in this page refers to Legacy-Huazhu business H Worl d
Slide 4: RevPAR Recovery Driven by…
4 RevPAR Recovery Driven by… RevPAR Higher Market Uncovering Opportunities Continuous Penetration & Synergy through in Lower Tier Cities Product & Service Regional Headquarters With High Resilience Upgrade H Worl d
Slide 5: Continued Network Expansion in China
5 Continued Network Expansion in China 的 Number of New Signing Number of Hotel Opening Number of Hotel Closure Legacy-Huazhu excl. soft economy hotels Legacy-Huazhu excl. soft economy hotels Total hotel closure Hotel closure of soft economy hotels and Hanting 1.0 672 209 300 535 262 140 122 80 Q1‘22
Slide 6: Further Penetration to Lower Tier Cities in China
6 Further Penetration to Lower Tier Cities in China Number of Hotels in Operation Number of Hotels in Pipeline City Coverage (as of Mar 31) (as of Mar 31) (hotels in operation and in pipeline) Tier-1 Cities Tier-2 Cities Tier-3 and below Cities Tier-1 Cities Tier-2 Cities Tier-3 and below Cities 8,4
Slide 7: Launch of Orange Hotel 3.0
Launch of Orange Hotel 3.0 3.0 HEALTHY VITALITY SUN LOHAS
Slide 8: Orange 3.0: Lifestyles of Health and Sustainability
8 Orange 3.0: Lifestyles of Health and Sustainability 3.0: LOHAS Liberty Orange Healthy Activity Sustainability H Worl d
Slide 9: Grand Opening of New InterCity Hotels
9 Grand Opening of New InterCity Hotels H Worl d
Slide 10: Intercity Brand DNA: Ultimate Business Travel Experience
10 Intercity Brand DNA: Ultimate Business Travel Experience From Europe to China, Inheritance and Evolution 从德国到中国，传承与进化 STAY WORK SERVICE FOOD 智 联 贴 ⼼ ⻛ 味 H Worl d
Slide 11: CRS Contribution Hit A Record High
11 CRS Contribution Hit A Record High 务 Daily Active User (DAU) of Direct Sales Channel Direct Booking through H World CRS DAU of H World APP DAU of H World Mini Program +15 ppt +2x +3x 62% 1013k 436k 47% 489k 144k Q1'19 Q1'23 Q1'19 Q1'23 Q1'19 Q1'23 • CRS refers to central reservation system • Incl
Slide 12: Agenda
AGENDA 01 02 03 04 23Q1 Business 23Q1 Operational Q and A Appendix Update and Financial Review
Slide 13: Hotel Network Continues to Expand
13 Hotel Network Continues to Expand 的 Hotel Network Expansion Hotel Turnover (Number of rooms in operation) (in RMB millions) +7% +71% 820,099 16,245 764,859 Legacy-DH Legacy-DH Legacy-DH 26,172 1,387 24,366 9,485 Legacy-DH Legacy-Huazhu 683 Legacy-Huazhu Legacy-Huazhu 793,927 14,858 740,493 Legacy
Slide 14: Legacy-Huazhu - Blended RevPAR Recovered to 118% of Q1'19
14 Legacy-Huazhu - Blended RevPAR Recovered to 118% of Q1‘19 务 -2023 RevPAR 2019 118% ADR (RMB) OCC RevPAR (RMB) Compare to Q1’19 +25.4% Compare to Q1’19 -5.0p.p. Compare to Q1’19 +17.6% Compare to Q1’22 +23.9% Compare to Q1’22 +16.4p.p. Compare to Q1’22 +58.3% 210 277 81% 76% 178 59% 221 224 132 Q1
Slide 15: Legacy-DH - Blended RevPAR Increased 65.8% YoY
15 Legacy-DH - Blended RevPAR Increased 65.8% YoY DH-2023 RevPAR 65.8% ADR (EUR) OCC RevPAR (EUR) +17.7% +15.5p.p. +65.8% 104 54% 55 88 38% 33 Q1'22 Q1'23 Q1'22 Q1'23 Q1'22 Q1'23 H Worl d
Slide 16: Revenue in Q1'23 Increased 67%, Beating Our Guidance
16 Revenue in Q1’23 Increased 67%, Beating Our Guidance 67% In million RMB 1Q23 1Q22 YoY 4Q22 QoQ Revenue from Legacy - Huazhu 3,594 2,275 58.0% 2,757 30.4% - Leased & Owned Hotels 2,020 1,258 60.6% 1,537 31.4% 1Q23 revenue of Legacy-Huazhu increased significantly, thanks to 1. pent up demand; - Man
Slide 17: Operating Income
17 Operating Income In million RMB 1Q23 1Q22 YoY 4Q22 QoQ Hotel operating costs 3,250 2,813 15.5% 3,430 -5.2% - Legacy-Huazhu 2,383 2,255 5.7% 2,446 -2.6% Hotel operating cost increased YoY in 1Q23 - Legacy-DH 867 558 55.4% 984 -11.9% mainly due to the recovery of business. Pre-opening expenses 9 26
Slide 18: Adjusted EBITDA, Adjusted Net Income and Operating Cash Flow
18 Adjusted EBITDA, Adjusted Net Income and Operating Cash Flow EBITDA In million RMB 1Q23 1Q22 YoY 4Q22 QoQ Adjusted EBITDA 1,651 -333 Nm 398 314.8% 1Q23 Legacy-Huazhu’s adj. EBITDA and adj. net income improved significantly mainly - Legacy-Huazhu 1,730 -93 Nm 397 335.8% due to recovery of Legacy-H
Slide 19: Liquidity Position Update
19 Liquidity Position Update Net Cash Cash Balance Unutilized Bank Facilities RMB957 mn RMB10.4 bn RMB2.0 bn * As of March 31, 2023 H Worl d
Slide 20: Guidance
20 Guidance Q2 Revenue vs. Q2 2022 ● Grow 51%-55% Excluding DH - Grow 64%-68% 2023 ● H Worl d
Slide 21: Agenda
AGENDA 01 02 03 04 23Q1 Business 23Q1 Operational Q and A Appendix Update and Financial Review
Slide 22: Agenda
AGENDA 01 02 03 04 23Q1 Business 23Q1 Operational Q and A Appendix Update and Financial Review
Slide 23: Same-Hotel Operational Data by Segment
23 Same-Hotel Operational Data by Segment Number of hotels in Same-hotel RevPAR Same-hotel ADR Same-hotel Occupancy operation As of For the year ended For the year ended For the year ended March 31, March 31, March 31, March 31, yoy change yoy change yoy change (p.p.) 2022 2023 2022 2023 2022 2023 2
Slide 24: Number of Hotels and Rooms
24 Number of Hotels and Rooms As of March 31, 2023 Total Hotels Rooms Unopened hotels in operation in pipeline Economy hotels 4,896 387,694 916 HanTing Hotel 3,285 291,489 596 Hi Inn 445 23,193 129 NiHao Hotel 184 13,553 153 Elan Hotel 747 35,255 1 Ibis Hotel 219 22,308 24 Zleep Hotels 16 1,896 13 M