H World Group Limited · HKEX:1179
H World — Q1 2024 Earnings Presentation
26 slides from H World's earnings presentation, May 20, 2024
Slide 1: First Quarter of 2024 Earnings Call
First Quarter of 2024 Earnings Call H World Group Limited (NASDAQ: HTHT and HKEX: 1179) May 20, 2024
Slide 2: Agenda
AGENDA 01 02 03 04 24Q1 Business 24Q1 Operational Q and A Appendix Update and Financial Review
Slide 3: Legacy-Huazhu - Blended RevPAR Increased 3.1% YoY
3 Legacy-Huazhu - Blended RevPAR Increased 3.1% YoY 华住中国-2024年一季度混合RevPAR同比增长3.1% ADR (RMB) OCC RevPAR (RMB) +1.0% +1.6p.p. +3.1% 277 280 77.2% 216 75.6% 210 Q1'23 Q1'24 Q1'23 Q1'24 Q1'23 Q1'24 * Numbers in this page refers to Legacy-Huazhu business H W or ld
Slide 4: Accelerated Network Expansion in China
4 Accelerated Network Expansion in China 酒店网络加速扩张 Number of Hotel Opening Number of Hotel Closure Number of Hotel in Pipeline Total hotel closure (as of Mar 31) Hotel closure excl. low quality economy soft brand and Hanting 1.0 209 569 3,138 148 2,304 262 87 72 Q1'23 Q1'24 Q1'23 Q1'24 Q1'23 Q1'24 *
Slide 5: Economy and Midscale as the Core Products Serving the Mass Market
5 Economy and Midscale as the Core Products Serving the Mass Market 经济型及中档酒店为核心，服务大众市场 Number of Hotels in Operation Number of Hotels in Pipeline Number of Hotel Opening (as of Mar 31) (as of Mar 31) Economy Midscale Upper midscale and above Economy Midscale Upper midscale and above Economy Midscale
Slide 6: Consistent Product Upgrade for 'Iron-Triangle' Brands - Hanting
6 Consistent Product Upgrade for ‘Iron-Triangle’ Brands - Hanting 铁三角品牌的持续升级 - 汉庭 Proportion of Hanting 3.5 and Above in Operation Hanting 3.5 and above 33.2% 29.8% 19.5% 13.3% 11.8% 2020 2021 2022 2023 Q1'24 * Numbers in this page refers to Legacy-Huazhu business H W or ld
Slide 7: Consistent Product Upgrade for 'Iron-Triangle' Brands - JI
7 Consistent Product Upgrade for ‘Iron-Triangle’ Brands - JI 铁三角品牌的持续升级 - 全季 Proportion of JI 4.0 and Above in Operation JI 4.0 and above 69.0% 65.7% 56.1% 45.3% 30.0% 2020 2021 2022 2023 Q1'24 * Numbers in this page refers to Legacy-Huazhu business H W or ld
Slide 8: Consistent Product Upgrade for 'Iron-Triangle' Brands - Orange
8 Consistent Product Upgrade for ‘Iron-Triangle’ Brands - Orange 铁三角品牌的持续升级 - 桔子 Proportion of Orange LOHAS in Pipeline Others LOHAS 315 317 58.4% 75.7% 41.6% 24.3% 2023 Q1'24 * Numbers in this page refers to Legacy-Huazhu business H W or ld
Slide 9: Launching New Version of NiHao
9 Launching New Version of NiHao 推出全新版本 你好 H W or ld
Slide 10: Continuous Penetration in Lower Tier Cities in China
10 Continuous Penetration in Lower Tier Cities in China 持续渗透低线城市 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 Tier-2 Tier-3, 4 and below Tier-1 Tier-2 Tier-3, 4 and below 9,684 3,138 8,464 2,000 40
Slide 11: Further Development of Upper-midscale Segment
11 Further Development of Upper-midscale Segment 不断发展中高档品牌 Number of Upper-midscale Hotels Number of Upper-midscale Hotels Multi-brand Strategy for in Operation in Pipeline Upper-midscale Segment +28%YoY +81%YoY +6%QoQ +11% QoQ 686 430 645 386 534 237 Q1'23 Q4'23 Q1'24 Q1'23 Q4'23 Q1'24 * Numbers in
Slide 12: Strengthening Direct B2B Sales Capability
12 Strengthening Direct B2B Sales Capability 华住商旅的不断加强 Direct Room Nights Number of Active Booked via B2B Corporate Clients 5mn+ 2,700+ +34% YoY +57% YoY * Numbers in this page refers to Legacy-Huazhu business H W or ld
Slide 13: Legacy-DH - Blended RevPAR Increased 4.5% YoY
13 Legacy-DH - Blended RevPAR Increased 4.5% YoY DH-2024年一季度混合RevPAR同比增长4.5% ADR (EUR) OCC RevPAR (EUR) +0.2% +2.3p.p. +4.5% 104 104 55.8% 58 53.5% 55 Q1'23 Q1'24 Q1'23 Q1'24 Q1'23 Q1'24 * Numbers in this page refers to Legacy-DH business H W or ld
Slide 14: Legacy-DH - Uncovering Global Opportunities
14 Legacy-DH - Uncovering Global Opportunities DH-积极推进国际化发展 Hotels in Operation, by region Hotels in Pipeline, by region (as of Mar 31 2024) (as of Mar 31 2024) Germany Europe (excl. Germany) Africa APAC Germany Europe (excl. Germany) Africa APAC 7% 15% 14% 6% 38% 53% 26% 41% * Numbers in this page
Slide 15: Agenda
AGENDA 01 02 03 04 24Q1 Business 24Q1 Operational Q and A Appendix Update and Financial Review
Slide 16: Hotel Network Continues to Expand
16 Hotel Network Continues to Expand 酒店网络持续扩张 Hotel Network Expansion Hotel Turnover (Number of rooms in operation) (in RMB millions) +17% 955,657 +21% Legacy-DH 820,099 19,669 27,148 Legacy-DH Legacy-DH 26,172 16,245 1,602 Legacy-DH 1,387 Legacy-Huazhu Legacy-Huazhu Legacy-Huazhu 928,509 793,927 Le
Slide 17: Revenue: Q1'24 Increased 18%, Beat Guidance
17 Revenue: Q1’24 Increased 18%, Beat Guidance 营收一季度同比增长18%，优于指引上限 In million RMB 1Q24 1Q23 YoY 4Q23 QoQ Revenue from Legacy - Huazhu 4,245 3,594 18.1% 4,384 -3.2% Ӫ Legacy-Huazhu revenue increased 18% YoY, exceeded the high-end of our - Leased & Owned Hotels 2,112 2,020 4.6% 2,288 -7.7% guidance, d
Slide 18: Operating Income Achieved RMB1.0 Billion in Q1'24
18 Operating Income Achieved RMB1.0 Billion in Q1’24 一季度经营利润达到人民币10亿元 In million RMB 1Q24 1Q23 YoY 4Q23 QoQ Ӫ The YoY increase of hotel operating cost was mainly due to our hotel network Hotel operating costs 3,565 3,250 9.7% 3,996 -10.8% expansion, as well as less rental - Legacy-Huazhu 2,615 2,383
Slide 19: Adjusted EBITDA, Adjusted Net Income and Operating Cash Flow
19 Adjusted EBITDA, Adjusted Net Income and Operating Cash Flow 经调整后的EBITDA，净利润以及经营性净现金流情况 Ӫ Legacy-Huazhu’s adj. EBITDA and adj. net In million RMB 1Q24 1Q23 YoY 4Q23 QoQ income improved both YoY and QoQ, thanks to continued business growth and Adjusted EBITDA* 1,421 1,031 37.8% 1,130 25.8% our ass
Slide 20: Liquidity Position Update
20 Liquidity Position Update 流动性情况更新 Cash Balance Net Cash Unutilized (incl. Time Deposits) (incl. Time Deposits) Bank Facilities RMB8.9 bn RMB3.1 bn RMB2.4 bn * As of March 31, 2024 H W or ld * Cash balance and net cash position includes RMB2.2bn time deposits and financial products
Slide 21: Return to Shareholders
21 Return to Shareholders 股东回报情况 Cash Dividend Share Repurchase ~USD300 mn ~USD75 mn paid in Q1’24 in Q1’24 * Cash dividend was announced in Nov 2023, and was paid out in Q1‘2024 H W or ld
Slide 22: Guidance
22 Guidance 业绩指引 Q2 Revenue vs. Q2 2023 • Grow 7%-11% 2024 • Excluding DH - Grow 7-11% H W or ld
Slide 23: Agenda
AGENDA 01 02 03 04 24Q1 Business 24Q1 Operational Q and A Appendix Update and Financial Review
Slide 24: Agenda
AGENDA 01 02 03 04 24Q1 Business 24Q1 Operational Q and A Appendix Update and Financial Review
Slide 25: Same-Hotel Operational Data by Segment
25 Same-Hotel Operational Data by Segment 同店经营数据 Number of hotels in Same-hotel Same-hotel RevPAR Same-hotel ADR operation Occupancy As of For the quarter ended For the quarter ended For the quarter ended March 31, March 31, March 31, March 31, yoy change yoy change yoy change (p.p.) 2023 2024 2023
Slide 26: Number of Hotels and Rooms
26 Number of Hotels and Rooms 酒店数量和房间数量 As of March 31, 2024 Total Hotels Rooms Unopened hotels in operation in pipeline Economy hotels 5,118 420,702 1,185 HanTing Hotel 3,744 329,477 785 Hi Inn 482 25,014 198 NiHao Hotel 310 23,115 177 Elan Hotel 339 18,193 - Ibis Hotel 227 22,992 11 Zleep Hotels 1