Pphe Hotel Group Limited · LSE:PPH
Pphe Hotel — FY2019 Earnings Presentation
48 slides from Pphe Hotel's earnings presentation, Feb 26, 2020
Slide 1: Annual Results 2019: The Value We Create
A N N UA L R E S U LT S 2 019 T H E VA LU E W E C R E AT E
Slide 2: Important Notice
PPHE HOTEL GROUP A N N U A L R E S U LT S 2 0 19 IMPORTANT NOTICE By attending the meeting where this presentation right, without giving reasons, at any time and in any or residents thereof, or to any corporation, partnership Forward-looking statements involve a number of known is made, or by readin
Slide 3: Presentation Team and Contents
PPHE HOTEL GROUP A N N U A L R E S U LT S 2 0 19 PRESENTATION TEAM CONTENTS Boris Ivesha Daniel Kos Greg Hegarty Robert Henke 3 President & Chief Financial Officer Deputy Chief Executive Officer Executive Vice President Chief Executive Officer & Executive Director & Chief Operating Officer Commercia
Slide 4: Highlights of the Year
PPHE HOTEL GROUP A N N U A L R E S U LT S 2 0 19 HIGHLIGHTS OF THE YEAR Inclusion in the Completed £100+ million FTSE 250 Index repositioning programme Launched Holmes Hotel London, Park Plaza Vondelpark, Joined FTSE 250 and FTSE Amsterdam, Park Plaza Utrecht and Arena Kažela Campsite All Share Indi
Slide 5: Financial Highlights
PPHE HOTEL GROUP A N N U A L R E S U LT S 2 0 19 FINANCIAL HIGHLIGHTS FY 2019 FY 2018 Change FY 2019 FY 2018 Change Total revenue £357.7m £341.5m +4.8% Reported EPS 80p 90p -11.0% Like-for-like revenue1 £355.8m £338.4m +5.2% Ordinary dividend 37p 35p +5.7% EBITDA £122.9m £113.2m +8.6% EPRA NAV 1,091
Slide 6: Total Revenue Up 4.8% in the Year
PPHE HOTEL GROUP A N N U A L R E S U LT S 2 0 19 TOTAL REVENUE UP 4.8% IN THE YEAR £0.5m £1.1m £1.2m £(2.4m) £3.0m £0.5m £12.3m £341.5m £357.7m Reported Like-for-like growth Like-for-like growth Like-for-like growth Like-for-like growth Like-for-like growth Closure Vondelpark Lease termination Repor
Slide 7: EBITDA Increased 8.6% to £122.9 Million
PPHE HOTEL GROUP A N N U A L R E S U LT S 2 0 19 EBITDA INCREASED 8.6% TO £122.9 MILLION M A RG I N 33.1% (0.4%) 0.3% 0% 0% (0.3%) 0% 0.2% 1.5% 34.4% £0.3m £(0.3m) £0.1m £0.4m £5.3m £(1.0m) £4.2m £0.7m 113.2m 122.9m Reported Like-for-like Like-for-like Like-for-like Like-for-like Like-for-like Refur
Slide 8: Operational Cash Flow
PPHE HOTEL GROUP A N N U A L R E S U LT S 2 0 19 OPER ATIONAL CASH FLOW £3.2m £(0.5m) £(1.9m) £4.7m £8.4m £9.7m £56.6m £80.2m Reported EBITDA Working Interest Non-recurring Tax Other Reported 2018 capital cash items in 2018 2019 Tax payments reduced by investment Cash flow 2018 impacted tax credits
Slide 9: Net Debt Stable with Strong Ratios
PPHE HOTEL GROUP A N N U A L R E S U LT S 2 0 19 NET DEBT STABLE WITH STRONG R ATIOS NET DEBT £16.7m £(8.0m) £7.9 £98.6m £(80.2m) £479.7m £514.7m 31 December Operational Acquisition Dividend Foreign Other 31 December 2018 cash flow and Capex exchange 2019 NET BA NK I NTE R E S T COVE R R ATI O N DEB
Slide 10: EPRA NAV at £25.46 per Share
PPHE HOTEL GROUP A N N U A L R E S U LT S 2 0 19 EPR A NAV AT £25.46 PER SHARE PE R SH A R E £24.57 £1.07 £0.79 £(0.36) £(0.07) £(0.54) £25.46 £33.9m £(15.3m) £(2.9m) £46.0m £(23.0m) £1,053.0m £1,091.7m EPRA NAV Revaluation done Earnings Dividends Other Foriegn currency EPRA NAV as of 31 December 20
Slide 11: Pipeline Update
PPHE HOTEL GROUP A N N U A L R E S U LT S 2 0 19 PIPELINE UPDATE AR T’OTEL LO ND O N H OX TO N AR T’OTEL NE W YO RK H OTEL B ELGR ADE H OTEL Z AGREB (P OS T PER IO D END ACQUISITIO N) 10
Slide 12: Pipeline Update Continued
PPHE HOTEL GROUP A N N U A L R E S U LT S 2 0 19 PIPELINE UPDATE CONTINUED* AREN A K A ŽEL A C AM P SITE PHA SE 2 (REP OSITIO N IN G) (2020) VERUDEL A B E ACH RESO R T, PUL A (REP OSITIO N IN G) (2020) H OTEL B R IO N I , PUL A (REP OSITIO N IN G) (2021) SITE NE AR WATERLO O S TATIO N (LO ND O N) *
Slide 13: Redevelopment and Positioning Our Owned Portfolio
PPHE HOTEL GROUP A N N U A L R E S U LT S 2 0 19 REDEVELOPMENT AND POSITIONING OUR OWNED PORTFOLIO DEVELOPMENT/REPOSITIONING R AMP- UP TO STAB ILISATION STABLE PERFORMANCE OPER ATIONAL OP TIMISATION PA R K PL A Z A LO N D O N R I VE R B A N K PA R K PL A Z A (D ECE M B E R 2 018) V I C TO R I A , A
Slide 14: Introduction
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Slide 15: Track Record of Owning, Developing and Operating Prime Hospitality Real Estate
PPHE HOTEL GROUP A N N U A L R E S U LT S 2 0 19 A 30 -YEAR TR ACK RECORD OF OWNING, DEVELOPING AND OPER ATING PRIME HOSPITALIT Y REAL ESTATE £1.7 billion £25.46 EPRA NAV per share 128 pence Adjusted EPRA in prime assets as at 31 December 2019 earnings per share £1.7bn portfolio of 45 prime assets W
Slide 16: Our Business Model
PPHE HOTEL GROUP A N N U A L R E S U LT S 2 0 19 OUR BUSINESS MODEL TR ANSFORMING HOSPITALIT Y RE AL ESTATE POTENTIAL INTO VALUE AND PROFITS We create shareholder value through developing, WE (R E)F I N A N C E owning and operating hospitality real estate TO FUND F U R T HER WE PU R C HA S E I N V E
Slide 17: Total Value Chain Approach
PPHE HOTEL GROUP A N N U A L R E S U LT S 2 0 19 TOTAL VALUE CHAIN APPROACH 0% 100% Site development/ Hotel ownership Hotel operation Hotel Brand Asset Extracting Reinvestment/ acquisition repositioning management management value cash recycling T O TA L VA L U E C H A I N Independence and Optimise
Slide 18: A Diversified Portfolio of Operating Assets
PPHE HOTEL GROUP A N N U A L R E S U LT S 2 0 19 A DIVERSIFIED PORTFOLIO OF OPER ATING ASSETS VA LU E S PL I T BY G EO G R A PH Y1 HOTELS AND RESORTS BY GEOGRAPHY HOTELS AND RESORTS BY OWNERSHIP TYPE MANAGED, LEASED OR GERMANY CROATIA CROATIA ASSETS UNDER CROATIA UK CO-OWNED FRANCHISED AND HUNGARY H
Slide 19: Independent Operator with Brand Flexibility and Access to Global Distribution
PPHE HOTEL GROUP A N N U A L R E S U LT S 2 0 19 INDEPENDENT OPER ATOR WITH BR AND FLEXIBILIT Y AND ACCESS TO GLOBAL DISTRIBUTION art’otel® is a contemporary collection Park Plaza is an upscale and upper A collection of hotels and self-catering Situated close to the historical towns of upper upscale
Slide 20: Centrally Located in Growth Markets
PPHE HOTEL GROUP A N N U A L R E S U LT S 2 0 19 CENTR ALLY LOCATED IN GROW TH MARKETS Europe London Amsterdam Hampstead Heath Holloway Amsterdam Brent Park Sloterdijk ART’OTEL Chalk Farm A MS T E R D A M Centraal ZSL London Zoo Haarlemmerweg Station ART’OTEL The Regents PARK PLAZA LONDON O PARK PLA
Slide 21: Selection of Properties in Prime Locations
PPHE HOTEL GROUP A N N U A L R E S U LT S 2 0 19 SELECTION OF PROPERTIES IN PRIME LOCATIONS PR O PE R T I E S Well-maintained, prime assets, with close proximity to major demand generators within leading capital cities, urban markets and resort destinations LO N D O N Park Plaza Westminster Bridge L
Slide 22: Strong Balance Sheet with Diverse Approach to Funding
PPHE HOTEL GROUP A N N U A L R E S U LT S 2 0 19 STRONG BAL ANCE SHEET WITH DIVERSE APPROACH TO FUNDING D E B T/ EQ U I T Y Accounting debt (backed by assets) £'m 147.6 Park Plaza Westminster Bridge London units 126.7 (999 year leases) 29.4% 514.7 Net debt 1087.7 100+ year leases 197.6 leverage Bank
Slide 23: Long Term Bank Funding Secured at Low Average Cost
PPHE HOTEL GROUP A N N U A L R E S U LT S 2 0 19 LONG TERM BANK FUNDING SECURED AT LOW AVER AGE COST LOA N M AT U R I T Y PR O F I LE AT 31 D ECE M B E R 2 019 Total 1 year 2 years 3 years 4 years 5 years Thereafter £’m £’m £’m £’m £’m £’m £’m 678.3 13.4 13.4 13.4 15.1 13.1 609.9 GAV Leverage – Aver
Slide 24: Leading to Strong Earnings and Value Growth
PPHE HOTEL GROUP A N N U A L R E S U LT S 2 0 19 LEADING TO STRONG EARNINGS AND VALUE GROW TH TOTAL REVENUE EBITDA NORMALISED PROFIT EPRA NAV PER SHARE ADJUSTED EPRA EPS DIVIDEND PER SHARE BEFORE TAX Pence £m £m £m £ Pence £357.7m Like-for-like £122.9m Like-for-like £40.7m £25.46 128p 37p 122.9 25.4
Slide 25: ... and Solid Returns from Investment
PPHE HOTEL GROUP A N N U A L R E S U LT S 2 0 19 ... AND SOLID RETURNS FROM INVESTMENT At market value Development Operational asset and assets excess cash Total 31 December 2019 £’m £’m £’m Net assets employed 1,637.0 113.0 1,750 Net bank debt (625.5) 110.8 (514.7) Non-yielding assets represent 17.
Slide 26: Creating Value with Recent Development and Repositioning Projects
PPHE HOTEL GROUP A N N U A L R E S U LT S 2 0 19 CREATING VALUE WITH RECENT DEVELOPMENT AND REPOSITIONING PROJECTS PA R K PL A Z A PA R K PL A Z A PA R K PL A Z A LO N D O N A R E N A K A ŽEL A C A M P SITE VO N DELPA R K , A M S TER DA M LO N D O N WATE R LO O R IVE R BA NK CROATI A – Relaunched as
Slide 27: Continuing with Our Strong Pipeline
PPHE HOTEL GROUP A N N U A L R E S U LT S 2 0 19 ... AND CONTINUING TO DO SO WITH OUR STRONG PIPELINE New development Repositioning Repositioning OW NED (E XPEC TED O PEN IN G 2023) 2021 2020 A R T’OTEL LO N D O N H OX TO N H OTEL B R I O N I PUL A VE RU D EL A B E ACH R E SO R T PUL A Acquisition M
Slide 28: Supplemental Information
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Slide 29: United Kingdom
PPHE HOTEL GROUP A N N U A L R E S U LT S 2 0 19 UNITED KINGDOM Holmes Hotel London Reported in GBP (£) Like-for-like in GBP (£)1 Year ended Year ended Year ended Year ended 31 Dec 2019 31 Dec 2018 Change 31 Dec 2019 31 Dec 2018 Change Total revenue £207.4 million £195.1 million +6.3% £207.4 million
Slide 30: The Netherlands
PPHE HOTEL GROUP A N N U A L R E S U LT S 2 0 19 THE NETHERL ANDS Park Plaza Vondelpark, Amsterdam Reported in GBP1 (£) Like-for-like GBP2 Year ended Year ended Year ended Year ended 31 Dec 2019 31 Dec 2018 Change 31 Dec 2019 31 Dec 2018 Change Total revenue £53.8 million £49.6 million +8.5% £51.9 m
Slide 31: Croatia
PPHE HOTEL GROUP A N N U A L R E S U LT S 2 0 19 CROATIA Arena One 99 Glamping Reported in GBP (£) Reported in local currency HRK1 Year ended Year ended Year ended Year ended 31 Dec 2019 31 Dec 2018 Change 31 Dec 2019 31 Dec 2018 Change Total revenue £61.1 million £60.0 million +1.9% HRK 519.6 milli
Slide 32: Germany and Hungary
PPHE HOTEL GROUP A N N U A L R E S U LT S 2 0 19 GERMANY AND HUNGARY Park Plaza Nuremberg Reported in GBP1 (£) Like-for-like GBP2 Year ended Year ended Year ended Year ended 31 Dec 2019 31 Dec 2018 Change 31 Dec 2019 31 Dec 2018 Change Total revenue £29.5 million £31.4 million -6.1% £29.5 million £2
Slide 33: IFRS 16 Impact
PPHE HOTEL GROUP A N N U A L R E S U LT S 2 0 19 IFRS 16 –– Impact on PPHE solely for operating leases I M PAC T O N 2 019 P& L I T E M S (short term, i.e. <35 years), P&L –– Long term ground rents (>100 years) under previous excluding P&L IFRS 16 IFRS 16 accounting already on balance item impact im
Slide 34: Consolidated Statement of Financial Position
PPHE HOTEL GROUP A N N U A L R E S U LT S 2 0 19 CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 31 December 2019 2018 Audited Audited £’000 £’000 Assets Non-current assets: Intangible assets 18,036 21,463 Property, plant and equipment 1,113,661 1,270,785 Right of use assets 217,990 – Investment
Slide 35: Consolidated Statement of Financial Position
PPHE HOTEL GROUP A N N U A L R E S U LT S 2 0 19 CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 31 December 2019 2018 £’000 £’000 Equity and liabilities Equity: Issued capital – – Share premium 130,260 130,061 Treasury shares (3,636) (3,636) Foreign currency translation reserve 8,094 23,131 Hedg
Slide 36: Consolidated Income Statement
PPHE HOTEL GROUP A N N U A L R E S U LT S 2 0 19 CONSOLIDATED INCOME STATEMENT As at 31 December 2019 2018 £’000 £’000 Revenues 357,692 341,482 Operating expenses (233,024) (220,775) EBITDAR 124,668 120,707 Rental expenses (1,774) (7,535) EBITDA 122,894 113,172 Depreciation and amortisation (41,749)
Slide 37: High Quality Portfolio Independently Valued at £1.7 Billion
PPHE HOTEL GROUP A N N U A L R E S U LT S 2 0 19 HIGH QUALIT Y PORTFOLIO INDEPENDENTLY VALUED AT £1.7 BILLION 31 December 2019 Book value EPRA value1 Valuation yield United Kingdom properties in operation (gross) 732.5 Finance lease liabilities (195.0) Units in Park Plaza Westminster Bridge London o
Slide 38: EPRA Performance Measures
PPHE HOTEL GROUP A N N U A L R E S U LT S 2 0 19 EPR A PERFORMANCE MEASURES EPRA net asset value The EPRA NAV as at 31 December 2019, set out in the table below amounts to £1,091.7 million, which equates to £25.46 per share. The EPRA NAV was negatively affected by adverse currency movements. As at 3
Slide 39: EPRA Performance Measures
PPHE HOTEL GROUP A N N U A L R E S U LT S 2 0 19 EPR A PERFORMANCE MEASURES EPRA earnings The main adjustment to the normalised profit included in the Group’s financial statements is adding back the IFRS depreciation charge, which is based on assets at historical cost, and replacing it with a charge
Slide 40: Holmes Hotel London
HOLMES HOTEL LONDON Completed May 2019 Bringing a unique lifestyle brand to Central London
Slide 41: Arena Kažela Campsite
ARENA KAŽELA CAMPSITE Phase 1 completed summer 2019 New luxury camping offer in Croatia
Slide 42: Park Plaza Vondelpark, Amsterdam
Park Plaza Vondelpark, Amsterdam Launched October 2019
Slide 43: Park Plaza Utrecht
PARK PLAZA UTRECHT Completed October 2019 Property transformed to meet the expectations of today's business and leisure travellers
Slide 44: Istria
PPHE HOTEL GROUP A N N U A L R E S U LT S 2 0 19 Guest House Riviera Amphitheatre Boat to Venice Our Our Our Landmarks Transport Airports Hotels Resorts Campsites Marina Lighting Giants Pula International Airport Fresh food market PULA Arena Stoja Splendid Resort Campsite Horizont Resort ISTRIA Hote
Slide 45: Board of Directors
PPHE HOTEL GROUP A N N U A L R E S U LT S 2 0 19 BOARD OF DIRECTORS Eli Papouchado Boris Ivesha Daniel Kos Kevin McAuliffe Nigel Jones Dawn Morgan Kenneth Bradley Nigel Keen Non-Executive Chairman President & Chief Financial Officer Non-Executive Deputy Non-Executive Director & Non-Executive Directo
Slide 46: Leadership Team
PPHE HOTEL GROUP A N N U A L R E S U LT S 2 0 19 LEADERSHIP TEAM PPHE H OTEL G ROUP A R E N A H OSPITALIT Y G ROU P Boris Ivesha Daniel Kos Greg Hegarty Inbar Zilberman Reuel (“Reli”) Slonim Devansh Bakshi Arnoud Duin President & Chief Financial Officer Deputy Chief Executive Chief Corporate Preside
Slide 47: Largest Shareholders
PPHE HOTEL GROUP A N N U A L R E S U LT S 2 0 19 L ARGEST SHAREHOLDERS Number of issued shares Number of Percentage of the Company’s issued (excluding treasury) Shareholders with holdings of 5% or more of the Company’s issued share capital (excluding treasury) as at 21 February 2020 Ordinary Shares
Slide 48: Correspondence
PPHE HOTEL GROUP A N N U A L R E S U LT S 2 0 19 CORRESPONDENCE ROBERT HENKE Executive Vice President Commercial Affairs County Hall – Riverside Building 2nd Floor, Belvedere Road London SE1 7GP United Kingdom T. +31 (0)20 717 8600 E. info@pphe.com pphe.com 47