Pphe Hotel Group Limited · LSE:PPH
Pphe Hotel — FY2018 Earnings Presentation
44 slides from Pphe Hotel's earnings presentation, March 2019
Slide 1: We Are Creators: Annual Results 2018
WE ARE CREATORS A N N UA L R E S U LT S 2018 Plaza on Park Plaza the River County Hall London Park Plaza London Riverbank Park Plaza Westminster Park Plaza Bridge London London Waterloo
Slide 2: Important Notice
I M P O R TA N T N O T I C E By attending the meeting where this presentation presentation upon request. PPHE gives no undertaking Any recipient of this presentation in jurisdictions outside Matters discussed in this document may constitute is made, or by reading this document, you agree to to provi
Slide 3: Presentation Team and Contents
P R E S E N TAT I O N T E A M CONTENTS 3 INTRODUCTION 13 RECENT DEVELOPMENTS AND PIPELINE Boris Ivesha Daniel Kos Robert Henke President Chief Financial Officer Executive Vice President & Chief Executive Officer Skills and experience & Executive Director Skills and experience Commercial & Corporate
Slide 4: £1.6 billion in prime assets, 24.57 EPRA NAV per share
A 3 0 -Y E A R T R A C K R E C O R D O F O W N I N G , D E V E L O P I N G A N D O P E R AT I N G P R I M E H O S P I TA L I T Y R E A L E S TAT E £1.6 billion £24.57 EPRA NAV per share Adjusted EPRA in prime assets (18.3% 8 year CAGR) earnings yield 9.5% International hospitality real estate We dev
Slide 5: Our Business Model
OUR BUSINESS MODEL T R A N S FO R M I N G H O S P I TA L I T Y R E A L E S TAT E P O T E N T I A L I N T O VA LU E A N D PR O F I T S We create shareholder value through developing, owning and operating chase real estate Pur hospitality real estate ea ting valu We own or co-own the majority of our p
Slide 6: A Diversified Portfolio of Operating Assets
A D I V E R S I F I E D P O R T F O L I O O F O P E R AT I N G A S S E T S Value split by geography1 Hotels and resorts by geography Hotels and resorts by ownership type (Includes franchises and excludes campsites (Includes franchises and excludes campsites) and development pipeline) Germany Croatia
Slide 7: Independent Operator with Brand Flexibility and Access to Global Distribution
I N D E P E N D E N T O P E R AT O R W I T H B R A N D F L E X I B I L I T Y A N D ACC E S S TO GLOBAL DISTRIBUTION The Park Plaza® brand is owned by The art’otel® brand, which is Radisson Hotel Group (“RHG”) and wholly owned by the Group, In Croatia, our subsidiary Arena operated in EMEA by the Gro
Slide 8: Centrally Located in Growth Markets
C E N T R A L LY L O C AT E D I N G R O W T H M A R K E T S Europe London Amsterdam Amsterdam Sloterdijk PARK PLAZA ART’OTEL Centraal LONDON PARK ROYAL Haarlemmerweg LONDON Station HOXTON ART’OTEL PARK PLAZA O sd AMSTERDAM SHERLOCK HOLMES Da orp PARK PL AZA LONDON er mra we VICTORIA g gracht Rozen k
Slide 9: Selection of Properties in Prime Locations
S E L E C T I O N O F P R O P E R T I E S I N P R I M E L O C AT I O N S Well-maintained, prime assets, with close proximity to major demand generators within leading capital cities, urban markets and resort destinations Properties Development opportunities LONDON Park Plaza Westminster Bridge Londo
Slide 10: Strong Balance Sheet with Diverse Approach to Funding
S TRO N G BAL AN CE SHEET W ITH DIVER SE APPROACH TO FUNDIN G Debt/Equity Accounting debt (backed by assets) £'m Park Plaza Westminster Bridge London units 129.2 £142.2 (999 year leases) 100+ year leases 187.7 28.7% £479.6 Net debt £1,048.3 £697.3 Bank debt leverage Gross bank debt 697.3 Cash (217.7
Slide 11: Long Term Bank Funding Secured at Low Average Cost
L O N G T E R M B A N K F U N D I N G S E C U R E D AT L O W AV E R A G E C O S T Loan maturity profile at 31 December 2018 Total 1 year 2 years 3 years 4 years 5 years Thereafter £’m £’m £’m £’m £’m £’m £’m 697.3 14.7 13.2 13.2 13.3 15.1 627.8 GAV Leverage – Average cost of bank debt 3.1% – Average
Slide 12: Leading to Strong Earnings and Value Growth
L E A D I N G T O S T R O N G E A R N I N G S A N D VA L U E G R O W T H Total revenue EBITDA Normalised PBT EPRA NAV per share Adjusted EPRA EPS Dividend per share £’m £’m £’m £ Pence Pence 115 115 104 104 97 97 96 96 91 91 37.7 341.5 113.2 325.1 107.3 32.1 31.7 35 29.8 94.1 272.5 24.02 24.57 24 26
Slide 13: ...And Solid Returns on Investment
...AND SOLID RETURNS ON INVESTMENT At market value Development asset and Operational assets excess cash Total 31 December 2018 £’m £’m £’m Net assets employed 1,587.6 82.5 1,670.1 – EPRA earnings affected by significant refurbishment Net bank debt (626.4) 146.8 (479.6) programmes in 2018 Minority in
Slide 14: Creating Value with Recent Development and Repositioning Projects
C R E AT I N G VA L U E W I T H R E C E N T D E V E L O P M E N T A N D R E P O S I T I O N I N G P R O J E C T S PA R K P L A Z A PA R K P L A Z A PA R K P L A Z A A R E N A O N E 9 9, L O N D O N W AT E R L O O LONDON RIVERBANK VIC TOR IA AMS TER DAM I S T R I A , C R O AT I A –S ite acquired in 2
Slide 15: ...And Continuing to Do So with Our Strong Pipeline
... AND CONTINUING TO DO SO WITH OUR STRONG PIPELINE Repositioning, renovation and development projects New hotel projects H 2 2 019 (£ 9 M I L L I O N ) H 2 2 019 (£ 8 M I L L I O N ) H 2 2 019 (£ 5 . 5 M I L L I O N ) OWNED (OPENING 2022/2023) PA R K P L A Z A S H E R L O C K H O L M E S PA R K P
Slide 16: Plaza on the River London / Park Plaza London Riverbank
Plaza on the River London Park Plaza London Riverbank PPHE Hotel Group Annual Results 2018 15
Slide 17: Financial Results
F I N A N C I A L R E S U LT S FINANCIAL R E S U LT S PPHE Hotel Group Annual Results 2018 16
Slide 18: Highlights
HIGHLIGHTS Premium listing London Repositioning Croatia Repositioning Transferred to the Premium listing Full opening Park Plaza London Riverbank Full opening of Arena One 99 Glamping, segment of the London Stock Exchange after £54 million repositioning programme after £8 million repositioning progr
Slide 19: Financial Highlights
FINANCIAL HIGHLIGHTS FY 2018 FY 2017 Change FY 2018 FY 2017 Change Total revenue £341.5m £325.1m +5.0% Normalised EPS 69p 58p +19.2% Like-for-like revenue1 £340.6.m £321.4m +6.0% Reported EPS 90p 57p +56.5% Ordinary dividend 35p 24p +45.8% EBITDA £113.2m £107.3m +5.5% EPRA NAV 1,053.0m 1,024.2m 2.8%
Slide 20: United Kingdom
UNITED KINGDOM Reported in GBP Like-for-like1 in GBP (£) (£) 12 months ended 12 months ended 12 months ended 12 months ended 31 December 2018 31 December 2017 31 December 2018 31 December 2017 Total revenue £195.1 million £185.8 million £194.3 million £185.8 million Room revenue £140.2 million £132.
Slide 21: The Netherlands
THE NETHERLANDS Reported in GBP Reported in local currency Euros Like-for-like GBP (£)1 (€)1 (£)2 12 months ended 12 months ended 12 months ended 12 months ended 12 months ended 12 months ended 31 December 2018 31 December 2017 31 December 2018 31 December 2017 31 December 2018 31 December 2017 Tota
Slide 22: Germany and Hungary
GERMANY AND HUNGARY Reported in GBP Reported in Like-for-like GBP (£)1 (€)1 (£)2 12 months ended 12 months ended 12 months ended 12 months ended 12 months ended 12 months ended 31 December 2018 31 December 2017 31 December 2018 31 December 2017 31 December 2018 31 December 2017 Total revenue £31.4 m
Slide 23: Croatia
C R O AT I A Reported in GBP Reported in (£)1 HRK 12 months ended 12 months ended 12 months ended 12 months ended 31 December 2018 31 December 2017 31 December 2018 31 December 2017 Total revenue £60.2 million £56.3 million HRK 503.8 million HRK 479.8 million Room revenue £34.1 million £32.5 million
Slide 24: Portfolio Update
PORTFOLIO Arena One 99 Glamping U P D AT E PPHE Hotel Group Annual Results 2018 23
Slide 25: Redevelopment and Positioning Our Owned Portfolio
REDEVELOPMENT AND POSITIONING OUR OWNED PORTFOLIO D E V E L O P M E N T/ R E P O S I T I O N I N G R A M P - U P T O M AT U R I T Y M AT U R E P E R F O R M A N C E O P E R AT I O N A L O P T I M I S AT I O N PA R K P L A Z A L O N D O N WAT E R L O O ( S O F T O P E N I N G D E C E M B E R 2 0 16 )
Slide 26: A New South Bank: Park Plaza London Riverbank
A NEW SOUTH BANK: PA R K P L A Z A L O N D O N R I V E R B A N K ( C O M P L E T E D O C T O B E R 2 0 1 8 ) D E V E LO PM E N T A N D R E P O S I T I O N I N G WO R K S (2 016 -2 018) – Complete room refurbishment for existing rooms – Added seven additional floors, creating 146 rooms – Reconfigurin
Slide 27: Creating Value from Repositioning: Park Plaza Victoria Amsterdam
C R E AT I N G VA L U E F R O M R E P O S I T I O N I N G PA R K P L A Z A V I C T O R I A A M S T E R D A M ( C O M P L E T E D J U LY 2 0 1 8 ) R E P OS I T I O N I N G WO R K S ( H 2 2 016 – H1 2 018) – Complete stripout and development of 150 rooms in the "Victoria" wing – Redesign and refurbish
Slide 28: Glamping's New Wave: Arena One 99 Glamping
G L A M P I N G ' S N E W W AV E : A R E N A H O S P I TA L I T Y G R O U P – A R E N A O N E 9 9 G L A M P I N G (CO M P L E T E D J U LY 2 0 18 ) R E P OS I T I O N I N G WO R K S ( H 2 2 017 – H1 2 018) – Provide complete site with utilities and infrastructure – Acquisition of approximately 200 l
Slide 29: Current and Planned Projects
CURRENT AND PL ANNED PROJECTS PPHE Hotel Group Annual Results 2018 28
Slide 30: Creating Value from Prime Site: art'otel London Hoxton & Sherlock Holmes
C R E AT I N G VA L U E F R O M P R I M E S I T E A R T ’ O T E L L O N D O N H O X T O N & PA R K P L A Z A S H E R L O C K H O L M E S L O N D O N N E W D E V E LO PM E N T CO M PL E T E R E P O S I T I O N I N G – A R T 'OT E L LO N D O N H OX TO N – PA R K PL A Z A S H E R LO C K H O L M E S LO
Slide 31: Redevelopment and Repositioning: Vondelpark and Utrecht
PA R K P L A Z A V O N D E L PA R K , A M S T E R D A M & PA R K P L A Z A U T R E C H T Redevelopment and repositioning REPOSITIONING REPOSITIONING – PA R K PL A Z A VO N D E L PA R K , A M S T E R DA M – PA R K PL A Z A U T R EC H T – Located in Amsterdam’s most affluent area – Located adjacent to
Slide 32: Creating Value from a New Asset Class
C R E AT I N G VA L U E F R O M A N E W A S S E T C L A S S ARENA K A ŽEL A C AMPSITE MEDULIN, VERUDEL A BE ACH RESOR T PUL A & HOTEL BRIONI PUL A REPOSITIONING REPOSITIONING – ARENA K AŽEL A CAMPSITE MEDULIN – V E R U D E L A B E AC H R E S O R T PU L A – L argest campsite in portfolio covering an
Slide 33: Supplementary Information
S U P P L E M E N TA R Y I N F O R M AT I O N PPHE Hotel Group Annual Results 2018 32
Slide 34: Consolidated Statement of Financial Position (Assets)
C O N S O L I D AT E D S TAT E M E N T O F F I N A N C I A L P O S I T I O N As at As at 31 December 31 December 2018 2017 Unaudited Audited £’000 £’000 Assets Non-current assets: Intangible assets 21,463 23,570 Property, plant and equipment 1,270,785 1,158,442 Investment in joint ventures 4,346 18,
Slide 35: Consolidated Statement of Financial Position (Equity and Liabilities)
C O N S O L I D AT E D S TAT E M E N T O F F I N A N C I A L P O S I T I O N As at As at 31 December 31 December 2018 2017 Unaudited Audited £’000 £’000 Equity and liabilities Equity: Issued capital – – Share premium 130,061 129,878 Treasury shares (3,636) (3,636) Foreign currency translation reserv
Slide 36: Consolidated Income Statement
C O N S O L I D AT E D I N C O M E S TAT E M E N T As at As at 31 December 31 December 2018 2017 Unaudited Unaudited £’000 £’000 Revenues 341,482 325,118 Operating expenses (220,775) (209,092) EBITDAR 120,707 116,026 Rental expenses (7,535) (8,722) EBITDA 113,172 107,304 Depreciation and amortisatio
Slide 37: High Quality Portfolio Independently Valued at £1.6 Billion
H I G H Q U A L I T Y P O R T F O L I O I N D E P E N D E N T LY VA L U E D AT £ 1 . 6 B I L L I O N 31 December 2018 Book value EPRA value* Valuation yield United Kingdom properties in operation (Gross) 736.5 Finance lease liabilities (187.7) Units in Park Plaza Westminster Bridge London owned by t
Slide 38: EPRA Performance Measures: Net Asset Value
EPR A PERFORMANCE MEASURES EPRA net asset value The main adjustment to the published figures included in the Group’s financial statements is the inclusion of the Group’s properties at their open market value as an operational hotel asset. On this basis, all of the Group’s properties have been indepe
Slide 39: EPRA Performance Measures: Earnings
EPR A PERFORMANCE MEASURES EPRA earnings The main adjustment to the published figures 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 calculated as 4% of the Group’s total revenues, re
Slide 40: Park Plaza London Waterloo: From Development to Refinance
PA R K P L A Z A L O N D O N W AT E R L O O F R O M D E V E L O P M E N T T O R E F I N A N C E ACQUISITION – Acquisition date (office building) June 2013 – Date of planning permission March 2014 – Construction completion date June 2017 – Total cost of investment (incl. site acquisition) £125.0m SA
Slide 41: Board of Directors
B OAR D OF DIREC TOR S Eli Papouchado Boris Ivesha Daniel Kos Kevin McAuliffe Nigel Jones Dawn Morgan Non-Executive Chairman President & Chief Financial Officer Non-Executive Deputy Non-Executive Director & Non-Executive Director Chief Executive Officer & Executive Director Chairman Senior Independe
Slide 42: Leadership Team
LEADERSHIP TEAM PPHE HOTEL GROUP A R E N A H O S P I TA L I T Y G R O U P Greg Hegarty Jaklien van Sterkenburg Robert Henke Inbar Zilberman Daniel Pedreschi Nieske van Reuel (“Reli”) Slonim Milena Perkovic Arnoud Duin Chief Operating Officer Executive Vice President Executive Vice President General
Slide 43: Largest Shareholders
LARGEST SHAREHOLDERS NUMBER OF ISSUED SHARES (EXCLUDING TREASURY ) 42,337,636 Percentage of issued share capital Largest shareholders as at 6 February 2019 Number of shares (excluding treasury Eli Papouchado1 19,852,714 46.89% Boris Ivesha2 6,690,027 15.80% Aroundtown Property Holdings 3,760,000 8.8
Slide 44: Correspondence
CORRESPONDENCE ROBERT HENKE Executive Vice President Commercial & Corporate Affairs County Hall – Riverside Building 2nd Floor, Belvedere Road London SE1 7GP United Kingdom T. +31 (0)20 717 8603 E. info@pphe.com pphe.com PPHE Hotel Group Annual Results 2018 43