Scandic Hotels Group Ab · OMXSTO:SHOT
Scandic Hotels Group Ab — Q1 2020 Earnings Presentation
18 slides from Scandic Hotels Group Ab's earnings presentation, May 20, 2020
Slide 1: Scandic Hotels Q1 2020
SCANDIC HOTELS Q1 2020 May 20, 2020
Slide 2: Highlights
HIGHLIGHTS
Slide 3: Substantial Cost Reductions & Secured Financing
SUBSTANTIAL COST REDUCTIONS & SECURED FINANCING Q1 NET SALES DOWN 18% AND ADJUSTED EBITDA OF -174 MSEK EXTENSIVE SET OF MEASURES TO ADJUST COST BASE AND PROTECT CASH FLOWS ONE-OFF IMPACTS: RESTRUCTURING COST OF 184 MSEK, WRITE DOWN OF INTANGIBLE ASSETS OF 2,955 MSEK AND NON CASH TAX COST OF 400 MSEK
Slide 4: Significant Impact on Market Demand
SIGNIFICANT IMPACT ON MARKET DEMAND Reduced international travel Measures taken by Bookings began to fall in late and travel restrictions authorities to reduce the LFL sales of -47% in March February among corporate customers spread of Covid-19 SWEDEN (TOTAL MARKET OCCUPANCY) NORWAY (TOTAL MARKET OC
Slide 5: Scandic's Occupancy and Bookings Have Picked Up Since Mid-April
SCANDIC’S OCCUPANCY AND BOOKINGS HAVE PICKED UP SINCE MID-APRIL SCANDIC OCCUPANCY 7 DAYS ROLLING SCANDIC BOOKINGS 7 DAYS ROLLING No. of room nights booked over the past 7 days 12 % 80 000 70 000 10 % 60 000 8% 50 000 6% 40 000 30 000 4% 20 000 2% 10 000 0% 0 Apr 19 Apr 26 May 3 May 10 May 17 Apr 19
Slide 6: Cost Reduction Measures
COST REDUCTION MEASURES TEMPORARY CLOSURE OF MORE THAN 50% OF HOTELS REDUCED STAFF NUMBER BY >80% INCLUDING FURLOUGH “A demanding TOTAL REDUCTION OF SOME 6,000 EMPLOYEES (1) process to lay off OPERATIONS and terminate the employment of so MANAGEMENT TAKEN A 20% VOLUNTARY PAY CUT many team members” G
Slide 7: Cash Flow Protection
CASH FLOW PROTECTION CANCELLATION OF 2019 DIVIDEND DISTRIBUTION CASH FLOWS PROJECTS FREEZE AND RESCHEDULED CAPEX AGREEMENT WITH LANDLORDS TO ADJUST PAYMENT TERMS DEFERRED RENTS EXPECTED TO PEAK IN Q3 2020 7
Slide 8: Hotel Portfolio and Pipeline
HOTEL PORTFOLIO AND PIPELINE Of which LEASE CONTRACTS TO BE ADAPTED TO MARKET Rooms in with lease Rooms in CONDITIONS operation contracts Pipeline Sweden 17,539 16,747 1,188 15% LEASE CONTRACTS UP FOR RENEWAL BY END OF 2022 AND 25% BY END OF 2025 Norway 16,531 14,371 902 PIPELINE FOR 2020-2024 CORRE
Slide 9: Hotels Expected to Reopen During May-August
HOTELS EXPECTED TO REOPEN DURING MAY-AUGUST Hotel status as of May 20 Open Closed Total GRADUAL REOPENING EXPECTED IN MAY-AUGUST Sweden 84 0 84 Norway 19 69 88 ABILITY TO REOPEN QUICKLY WITHIN 1-2 DAYS, ONE Finland 15 49 64 WEEK INCLUDING MARKETING Denmark 12 15 27 ACCORDING TO RECENT SURVEY, THE MA
Slide 10: Scandic Has Executed Quickly in a Difficult 2020 to Reset for Strong Recovery
SCANDIC HAS EXECUTED QUICKLY IN A DIFFICULT 2020 TO RESET FOR STRONG RECOVERY IN 2021-2022 Reduced non-rent costs by 70%, adjusted payment terms for rent and extended financing Q2 Expected gradual increase in occupancy of a few percentage points per month in May and June 2020 Gradual recovery in the
Slide 11: Financial Update
FINANCIAL UPDATE
Slide 12: Like-for-Like Net Sales Down 18% in Q1 2020, and 47% in March
LIKE-FOR-LIKE NET SALES DOWN 18% IN Q1 2020, AND 47% IN MARCH Jan-Mar Jan-Mar LFL NET SALES EVOLUTION PER 2020 2019 % SEGMENT IN MARCH: Net sales 3,343 4,066 -17.8% March 2020 FX -16 -0.3% Sweden -44.3% Organic growth -707 -17.5% Norway -48.5% New hotels 55 1.3% Finland -45.0% Exited hotels -67 -1.7
Slide 13: Negative Adjusted EBITDA Following Market Weakness in March
NEGATIVE ADJUSTED EBITDA FOLLOWING MARKET WEAKNESS IN MARCH Jan-Mar Adjusted MSEK Net sales Adjusted EBITDA EBITDA, % 2020 2019 2020 2019 2020 2019 Sweden 1,154 1,372 1 118 0.1% 8.6% IMPLEMENTED COST REDUCTIONS TO Norway 888 1,152 -64 45 -7.2% 3.9% MITIGATE THE NEGATIVE EFFECT OF LOW Finland 833 975
Slide 14: Results Impacted by Restructuring, Impairment and Non-Cash Tax Expense
RESULTS IMPACTED BY RESTRUCTURING, IMPAIRMENT AND NON- CASH TAX EXPENSE January-March excluding IFRS 16 2020 2019 RESTRUCTURING COSTS OF Total operating income 3,343 4,066 184 MSEK RELATED TO STAFF EBITDAR 857 1,263 REDUCTION Total rental charges -1,031 -1,103 Adjusted EBITDA -174 160 Pre-opening co
Slide 15: Low Level of Operation Impacted Cash Flow Development
LOW LEVEL OF OPERATION IMPACTED CASH FLOW DEVELOPMENT January-March 2020 2019 WORKING CAPITAL Adjusted EBITDA -174 160 WAS LARGELY Change in working capital -24 -254 UNCHANGED DURING Q1, HELPED Paid tax, interest, pre-opening and other items -303 -234 BY DEFERRED RENT Cash flow from operations -501
Slide 16: Outlook
OUTLOOK
Slide 17: Cost Assumptions During "Sleep Mode"
COST ASSUMPTIONS DURING “SLEEP MODE” SLEEP MODE DEFINED AS SCANDIC ”Normalized” Cost Of which Of which OPERATING AT VERY LOW cost base in reduction in company Government MSEK Q2 sleep mode specific support OCCUPANCY AND A SIGNIFICANT % OF HOTELS CLOSED Cost of goods sold -150 90% 100% 0% FURTHER MEA
Slide 18: Market Outlook for Q2 2020
MARKET OUTLOOK FOR Q2 2020 WE EXPECT A GRADUAL INCREASE IN OCCUPANCY OF A FEW PERCENTAGE POINTS PER MONTH IN MAY AND JUNE WE EXPECT A FURTHER IMPROVEMENT AS DOMESTIC TOURISM RESUMES WHEN THE HOLIDAY SEASON STARTS 18