H World Group Limited · HKEX:1179
H World — Q3 2024 Earnings Presentation
26 slides from H World's earnings presentation, Nov 27, 2024
Slide 1: Third Quarter of 2024 Earnings Call
Third Quarter of 2024 Earnings Call H World Group Limited (NASDAQ: HTHT and HKEX: 1179) November 27, 2024
Slide 2: Agenda
AGENDA 01 02 03 04 24Q3 Business 24Q3 Operational Q and A Appendix Update and Financial Review
Slide 3: Legacy-Huazhu - Blended RevPAR Decreased 8.1% YoY
3 Legacy-Huazhu - Blended RevPAR Decreased 8.1% YoY 华住中国 - 2024年三季度混合RevPAR同比下降8.1% ADR (RMB) OCC RevPAR (RMB) -1.0p.p. 324 -7.0% 85.9% 84.9% 278 -8.1% 301 256 Q3'23 Q3'24 Q3'23 Q3'24 Q3'23 Q3'24 * 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 Sep 30) Hotel closure excl. low quality economy soft brand and Hanting 1.0 774 2,935 2,899 217 545 139 123 45 Q3'23 Q3'24 Q3'23 Q3'24 Q3'23 Q3'24 *
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 Sep 30) (as of Sep 30) Economy Midscale Upper midscale and above Economy Midscale Upper midscale and above Economy Midscale
Slide 6: Continuous Penetration in Lower Tier Cities in China
6 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 Sep 30) (as of Sep 30) (hotels in operation and in pipeline) Tier-1 Tier-2 Tier-3, 4 and below Tier-1 Tier-2 Tier-3, 4 and below 10,707 2,935 2,899 2,000 9,
Slide 7: Further Development of Upper-Midscale Segment
7 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 +33%YoY +36%YoY 803 487 605 357 Q3'23 Q3'24 Q3'23 Q3'24 * Numbers in this page refers to Legacy-Huazhu bu
Slide 8: Launching Crystal Orange 2.5
8 Launching Crystal Orange 2.5 发布桔子水晶2.5 H W or ld
Slide 9: Strengthening Direct B2B Sales Capability
9 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 7.5mn+ 4,500+ +41% YoY +45% YoY +19% QoQ +23% QoQ * Numbers in this page refers to Legacy-Huazhu business H W or ld
Slide 10: Membership and CRS Contribution Rising
10 Membership and CRS Contribution Rising 会员规模及中央预定占比提升 Number of Members Continue Increasing Direct Booking through H World CRS +2.2p.p. YoY +4.3p.p. QoQ 257 228 64.2% 62.0% 59.9% 193 199 169 153 122 103 79 49 Q3'23 Q2'24 Q3'24 * Numbers in this page refers to Legacy-Huazhu business H W or ld * Inc
Slide 11: Legacy-DH - Blended RevPAR Increased 3.7% YoY
11 Legacy-DH - Blended RevPAR Increased 3.7% YoY DH - 2024年三季度混合RevPAR同比增长3.7% ADR (EUR) OCC RevPAR (EUR) +2.5% +0.8p.p. +3.7% 69.0% 69.8% 82 114 117 79 Q3'23 Q3'24 Q3'23 Q3'24 Q3'23 Q3'24 * Numbers in this page refers to Legacy-DH business H W or ld
Slide 12: Legacy-DH - Transformation of Asset Light is in Progress
12 Legacy-DH - Transformation of Asset Light is in Progress DH - 轻资产化转型 Ӫ Exited the Zleep A/S Joint Venture Ӫ 100% ownership of the Zleep brand now, and remain committed to brand's future growth Ӫ As part of our asset light strategy with 14 L&O hotels removed from our portfolio Ӫ Minimum impacts on
Slide 13: Legacy-DH - Major Restructuring Started in 3Q
13 Legacy-DH - Major Restructuring Started in 3Q DH - 进行重大重组 Streamlining of Continue to Scrutiny of hotel Occurred RMB 81mn the headquarters, reduce G&A performance and one-off restructuring and reduction of non-personnel costs optimization of expense in 3Q which administration hotel operations hav
Slide 14: Agenda
AGENDA 01 02 03 04 24Q3 Business 24Q3 Operational Q and A Appendix Update and Financial Review
Slide 15: Hotel Network Continues to Expand
15 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) +20% +11% 26,019 1,062,546 Legacy-DH 23,498 Legacy-DH 885,756 27,687 Legacy-DH 2,086 Legacy-DH 1,935 26,472 Legacy-Huazhu Legacy-Huazhu Legacy-Huazhu 1,034,859 859,28
Slide 16: Revenue Increased 2.4% YoY
16 Revenue Increased 2.4% YoY 三季度营收同比增长2.4% In million RMB 3Q24 3Q23 YoY 2Q24 QoQ Revenue from Legacy - Huazhu 5,162 5,113 1.0% 4,828 6.9% Ӫ Legacy-Huazhu revenue increased 1% YoY, inline with our guidance. The year-over-year - Leased & Owned Hotels 2,461 2,748 -10.4% 2,395 2.8% growth was driven pr
Slide 17: Increasing Revenue Contribution from Asset-Light Model
17 Increasing Revenue Contribution from Asset-Light Model 轻资产收入占比持续提升 Legacy-Huazhu Revenue Breakdown in Q3’23 Legacy-Huazhu Revenue Breakdown in Q3’24 Leased and owned hotels Manachised and franchised hotels Others Leased and owned hotels Manachised and franchised hotels Others 2% 2% 44% 54% 50% 48
Slide 18: Operating Income Achieved RMB1.7 Billion in Q3'24
18 Operating Income Achieved RMB1.7 Billion in Q3’24 三季度经营利润达到人民币17亿元 In million RMB 3Q24 3Q23 YoY 2Q24 QoQ Ӫ The YoY increase of hotel operating cost was due to an increase in personnel costs as we expand Hotel operating costs 3,799 3,613 5.1% 3,731 1.8% our hotel network. - Legacy-Huazhu 2,803 2,6
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 3Q24 3Q23 YoY 2Q24 QoQ income decreased YoY, due to the RevPAR decline from a high-base last Adjusted EBITDA* 2,113 2,334 -9.5% 2,040 3.6% year, and SG
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 RMB9.3 bn RMB4.0bn RMB3.6 bn * As of September 30, 2024 H W or ld * Cash balance and net cash position includes RMB1.4 bn time deposits and financial products
Slide 21: Shareholder Return – Continued Share Repurchase
21 Shareholder Return – Continued Share Repurchase 股东回报 – 持续回购 Share ~ USD270mn Repurchase YTD Q3’24 H W or ld
Slide 22: Guidance
22 Guidance 业绩指引 Q4 Revenue vs. Q4 2023 • Grow 1%-5% 2024 • Excluding DH - Grow 1%-5% H W or ld
Slide 23: Agenda
AGENDA 01 02 03 04 24Q3 Business 24Q3 Operational Q and A Appendix Update and Financial Review
Slide 24: Agenda
AGENDA 01 02 03 04 24Q3 Business 24Q3 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 September 30, September 30, September 30, September 30, yoy change yoy change yoy change (p.p.)
Slide 26: Number of Hotels and Rooms
26 Number of Hotels and Rooms 酒店数量和房间数量 As of September 30, 2024 Total Hotels Rooms Unopened hotels in operation in pipeline Economy hotels 5,461 449,937 1,091 HanTing Hotel 4,057 355,690 695 Hi Inn 551 28,987 237 NiHao Hotel 393 29,712 135 Elan Hotel 215 11,290 - Ibis Hotel 226 22,013 15 Zleep Hote