Accor Sa · EURONEXT:AC
Accor Sa — AccorHotels — Investor Day (October 2016)
189 slides from Accor Sa's investor day presentation, October 2016
Slide 1: Opening Remarks
OPENING REMARKS Sébastien Bazin
Slide 2: We operate in a world where change is the only constant
We operate in a world where change is the only constant AC C O RHO TE L S | I NV E STO R D AY – O C TO BE R 2 0 1 6 2
Slide 3: Hotel & Leisure industry changes
Hotel & Leisure industry changes Raise of lodging alternative offers focusing on local flavor and personalized services Constant innovation of hoteliers to address guest expectations and create preference Reinforcement of value proposal to owners Structural growth of distribution costs pressuring ho
Slide 4: Solid growth in global Hospitality Revenues with diverse dynamics
Solid growth in global Hospitality Revenues with diverse dynamics 2010-2015 Business Volumes 2010-2015 Volume growth 800 724$Bn 700 114 629$Bn 44% 600 115 57 65 500 44 45 400 28% 300 488 15% 200 425 100 0% -1% 0 2010 2015 Hotels Private rental Cruises Other AC C O RHO TE L S | I NV E STO R D AY – O
Slide 5: Changes at accelerated pace
Changes at accelerated pace More informed than ever Marriott / Starwood a game changer CONSUMER INDUSTRY in the US Market BEHAVIOR Seek experience more than attributes CONSOLIDATION FRHI Acquisition by AccorHotels Want different experiences Are much more flexible DIGITAL IS OF Precise channel manage
Slide 6: Hence changes of focus from stakeholders
Hence changes of focus from stakeholders PRIVATE AirBnB perceived as the new Recently targeted by global Hoteliers OTAs RENTAL key threat, overshadowing OTAs with vast Members’ rate campaigns SEARCH Google an increasing leader Taking over computers at MOBILE ENGINES as a prescriptor of room sales tr
Slide 7: A full day ahead to better capture our path
A full day ahead to better capture our path MORNING SESSIONS AFTERNOON SESSIONS BRANDS & DEVELOPMENT HOTELINVEST & THE BOOSTER PROJECT Gaurav Bhushan John Ozinga LUXURY & UPSCALE HOTELS FINANCE Chris Cahill Jean-Jacques Morin NEW BUSINESSES & BRANDS CLOSING REMARKS Elodie Vazquez, David Amsellem, Gu
Slide 8: Thank you
yy Feel Welcome THANK YOU AA y ukGINy SOY sorrrec onefinestay Jk] pultman swissétel NovoTEL Mercure adagio MAMA 302 ibis ibis ibis, noteu-a
Slide 9: Development Strategy
DEVELOPMENT STRATEGY Gaurav Bhushan
Slide 10: Unique one stop shop covering all segments
Ultra Luxury A Comprehensive brand portfolio Unique ‘one stop shop’ covering all segments Economy ACCORHOTELS | INVESTOR DAY – OCTOBER 2016 10
Slide 11: Strong complementary brand portfolio
Strong complementary brand portfolio SO Hua Hin, Sofitel Paris The Plaza, New York, Thailand Le Faubourg, France Fairmont Hotel, USA LIFESTYLE 100 to 250 rooms LUXURY 100 to 300 rooms ICONIC HOTELS 250 to 500 rooms REBELLIOUS CONTEMPORARY NORTH AMERICAN HERITAGE STRONG DESIGN ELEMENT FRENCH ELEGANCE
Slide 12: Strong complementary brand portfolio
Strong complementary brand portfolio Pullman Shanghai South, Hotel Muse Bangkok Langsuan – Swissotel Zurich, China MGallery, Thailand Switzerland CONTEMPORARY 200 to 500 rooms BOUTIQUE 100 to 200 rooms MODERN 200 to 500 rooms INSTYLE & INDIVIDUAL “SWISSNESS” INTERNATIONAL UNIQUE PERSONALITY NATURAL
Slide 13: Strong complementary brand portfolio
Strong complementary brand portfolio Novotel New York Times Square, Mercure Jakarta Sabang, USA Indonesia MODERN 200 to 400 rooms GENUINE EXPERIENCE 100 to 250 rooms INTERNATIONAL LOCALLY INSPIRED FULL SERVICE ACCORHOTELS | INVESTOR DAY – OCTOBER 2016 13
Slide 14: Strong complementary brand portfolio
Strong complementary brand portfolio Ibis new room concept Ibis Styles Liverpool WELL-BEING AT THE BEST PRICE 100 to 250 rooms PERSONALIZED DESIGN 50 to 200 rooms STANDARDIZED POSITIVE & TRENDY CARING & EFFICIENT ALL INCLUSIVE ACCORHOTELS | INVESTOR DAY – OCTOBER 2016 14
Slide 15: Global presence today
Global presence today EUROPE 2,800 h. / 310 kr. 54% of total rooms NORTH AM / CENTRAL AM. ASIA PACIFIC 83 h. / 27 kr. 5% of total rooms 741 h. / 149 kr. 95 COUNTRIES 26% of total rooms 4,084 HOTELS MEA 572K ROOMS 174 h. / 39 kr. LATIN AM 7% of total rooms 286 h. / 47 kr. 8% of total rooms Network (h
Slide 16: Pipeline overview
Pipeline overview EUROPE 194 h. / 24 kr. 14% of total pipeline 925 HOTELS NORTH AM / 174K ROOMS CENTRAL AM. ASIA PACIFIC 15 h. / 4 kr. 374 h. / 80 kr. 2% of total pipeline 46% of total pipeline 27% 43% Luxury Economy MEA By LATIN AM 174 h. / 42 kr. segment 24% of total pipeline 168 h. / 24 kr. 30% M
Slide 17: Network outlook mid-term
Network outlook mid-term NETW ORK PIPELINE MID TERM OUTLOOK Hotels Rooms (k) % Hotels Rooms (k) % Hotels Rooms (k) % EUROPE 2 800 310 54% 194 24 14% 2 994 334 45% MEA 174 39 7% 174 42 24% 348 81 11% AMERICAS 369 74 13% 183 28 16% 552 102 14% ASIA PACIFIC 741 149 26% 374 80 46% 1 115 229 31% TOTAL 4
Slide 18: Driving high margin development
Development strategy key pillars “DRIVING HIGH MARGIN DEVELOPMENT” Build Focus on Accelerate New network high value development growth scale contracts in Luxury segment levers ACCORHOTELS | INVESTOR DAY – OCTOBER 2016 18
Slide 19: Build network scale
BUILD NETWORK SCALE
Slide 20: Build network scale
Build network scale A multi branded strategy per region underpinned by a single distribution & loyalty platform SCALE HELPS TO: Spread support costs Drive brand Invest more Invest in more over a larger network visibility resources in “on-ground” of hotels – driving marketing actions - resources to h
Slide 21: Consolidate leadership in our key leading countries
Consolidate leadership in our 10 key leading countries FRANCE 1667H UK 245H GERMANY POLAND 372H 83H Leverage our SPAIN ITALY scale effect 84H 95H CHINA 279H BRAZIL Use our 374H full brand matrix INDONESIA 197H AUSTRALIA CONSOLIDATE 233H LEADERSHIP DRIVE MARGIN ~ 70% of network 45% of pipeline ACCORH
Slide 22: Focus on China
Focus on China Midterm target of 350-400 hotels under AH brands HUAZHU DEVELOPMENT OF ACCORHOTELS BRANDS Formed a local alliance with Huazhu aiming at: Lead position in the second largest hotel market globally ~ 13 27 176 Hotel openings Hotels committed Hotels under Accelerating development of midsc
Slide 23: Build scale & critical mass in fast growing markets
Build scale & critical mass in fast growing markets RUSSIA 48H Focus on key gateway cities to address international demand SAUDI ARABIA 60H Progressively densify INDIA to tap local demand COLOMBIA 79H 16H with multiple brands (“hub & spoke”) ESTABLISH LEADERSHIP DRIVE SCALE & MARGIN 11% of network 3
Slide 24: Explore new markets with significant growth potential
Explore new markets with significant growth potential IRAN # of tourists x4 by 2020 CUBA Focus on large hotels Total hotel using selective x2 supply by 2030 international brands High barriers to entry 1st mover advantage ETHIOPIA Hotel demand x2 by 2020 Leverage pioneering position to establish lead
Slide 25: Focus on high value contracts
FOCUS ON HIGH VALUE CONTRACTS
Slide 26: Focus on high value long term contracts - North America
Focus on high value long term contracts- North America Large Hotels in major cities with high RevPARs Large Management Fees Volume 480 rooms Novotel New York (€ 1 to 5 million p.a. + system fees) Times Square 40%-75% of business through distribution & loyalty platform High Margin on management fees
Slide 27: Focus on high value long term contracts - Asia Pacific
Focus on high value long term contracts- Asia Pacific Large Hotels in major cities with high RevPARs Seoul Yongan Complex 1,700 keys Grand Mercure, Novotel, Large Management Fees Volume Opening in 2018 Novotel Suites & Ibis Styles (€ 1 to 5 million p.a. + system fees) 40%-75% of business through dis
Slide 28: Focus on high value long term contracts - Middle East
Focus on high value long term contracts- Middle East Large Hotels in major cities with high RevPARs Large Management Fees Volume 412 rooms Novotel Dubai (€ 1 to 5 million p.a. + system fees) World Trade Center 40%-75% of business through distribution & loyalty platform High Margin on management fees
Slide 29: Accelerate development in luxury segment
ACCELERATE DEVELOPMENT IN LUXURY SEGMENT
Slide 30: Scalable & high margin segment
Scalable & high margin segment GROWTH & PROFITABILITY MARKET SIZE 3-4% RevPAR growth vs 2-3% for mid/eco 35% of branded rooms (3.5 mr) ~x3 Fees per hotel vs mid/eco 41% of branded pipeline (790 kr) >50% Margin on management fees ~50% of pipeline in emerging countries ADDITIONAL BENEFITS Makes our di
Slide 31: Strong momentum in fast-growing markets
Strong momentum in fast-growing markets NETWORK - 508 HOTELS PIPELINE - 198 HOTELS c.50% in Middle East & Asia Pacific c.80% in Middle East & Asia Pacific NORTH AMERICA 5 h / 2 kr 5% LATIN AMERICA 3 h / 1 kr LATIN AMERICA 1% NORTH AMERICA 25 h / 6 kr 51 h / 22 kr 4% 17% MIDDLE EAST ASIA PACIFIC ASIA
Slide 32: Doubling growth over the next years
Doubling growth over the next 5 years x2 c. 250 h. 132 h. 80% committed TARGET x2 PACE OF DEVELOPMENT 2011-2015 openings 2016-2020 forecast IN THIS SEGMENT Dedicated LUX development team SIGNIFICANT INCREASE IN PROJECT SIGNINGS created, working with 110 regional & DEAL FLOW FOR FRHI BRANDS developer
Slide 33: New growth levers
NEW GROWTH LEVERS
Slide 34: Leveraging our Branded Residential Capabilities
Leveraging our Branded Residential Capabilities Significant lever to win flagship projects Attractive Fees Streams Significant growth potential across current AH brands (Middle East, Asia Pacific) Synergies with private rental platforms INSIGHT 75% of FRHI pipeline includes a residential component U
Slide 35: AccorHotels Branded Residences
AccorHotels Branded Residences Manila, Philippines Nanjing, China Vancouver, Canada Istanbul, Turkey Chengdu, China Dubai, UAE Abu Dhabi, UAE ACCORHOTELS | INVESTOR DAY – OCTOBER 2016 35
Slide 36: AccorHotels Branded Residences
AccorHotels Branded Residences San Diego, California Inspiration, Florida At Nature’s Door, El Corazon de Santa, Acapulco Diamante, Zimbali, South Africa Whistler New Mexico Mexico Ghirardelli Square, Mayakoba, Mexico San Francisco Franz Klammer Lodge, Telluride ACCORHOTELS | INVESTOR DAY – OCTOBER
Slide 37: Raffles Residences Jakarta – Case Study
Raffles Residences Jakarta – Case Study 88 ultra-luxury Residences, together with 173 room hotel Dynamic mixed -use development (retail, offices, hotel, apartments and residences) Designed exclusively for owner occupancy Dedicated residential amenities, plus integration with Hotel facilities Partner
Slide 38: AccorHotels Resorts
AccorHotels Resorts AN ATTRACTIVE & STRATEGIC MARKET 3m rooms: a sizeable market ~15% of hotel rooms worldwide Fairmont Zimbali > 25% of upscale / luxury supply Strong growth in resort destinations > 2 times faster than business travel Sofitel Agadir Sofitel Dubai the Palm Valuable in our loyalty pr
Slide 39: AccorHotels Resorts
AccorHotels Resorts ACCORHOTELS WELL POSITIONED Reinforced expertise FRHI acquisition (25% resorts) Sofitel Mauritius >35k rooms / 150 hotels under operation Sofitel Moorea La Ora 15% of our pipeline in resort destinations >80% of resort pipeline in APAC Raffles Seychelles ACCORHOTELS | INVESTOR DAY
Slide 40: Lifestyle Hotels
Lifestyle Hotels AN ATTRACTIVE & STRATEGIC MARKET Acceleration of development Market size to double over the next 3-5 years 10% of ww pipeline (vs 1% of the existing offer) SO Bangkok Aligned with new social environment Engagement of guests and hotel teams Mama Shelter Los Angeles ACCORHOTELS | INVE
Slide 41: Lifestyle Hotels
Lifestyle Hotels ACCORHOTELS WELL POSITIONED Multi-tiered strategy Mama Shelter Mama Shelter Paris Marseille Luxury Midscale SO Hua Hin Economy SO Hua Hin SO Singapore ACCORHOTELS | INVESTOR DAY – OCTOBER 2016 41
Slide 42: Concluding thoughts
CONCLUDING THOUGHTS…
Slide 43: Asia Pacific case study - scale effect
Asia Pacific case study - scale effect Number of hotels Scale effect on support costs 800 700 x1,7 600 3 500 400 730 300 2,5 200 430 100 0 2 2010 2015 1,5 Fee volume € 2,8% 300 2,3% 1 250 x2,4 200 150 0,5 100 239 50 100 0 0 2010 2015 2010 2015 As % of gross revenue ACCORHOTELS | INVESTOR DAY – OCTOB
Slide 44: Consolidating our leadership position
A steady increase of our pace of openings Consolidating our leadership position 250-280h. 40-45kr 228h. 36kr - China MEA - New brands - New levers 157h. of growth APAC 20kr Americas Europe 2010 2015 Mid-term annual objective ACCORHOTELS | INVESTOR DAY – OCTOBER 2016 44
Slide 45: A structural change in our revenue and profit mix
A structural change in our revenue and profit mix 40-45 kr 30-35 kr High growth 50% of fees & high margin 30% of fees 25% of openings 20% of openings 30% of fees Growth in emerging 25% of fees 30% of openings markets 30% of openings High density 40% of fees 25% of fees in all markets 50% of openings
Slide 46: Thank you
> Feel Welcome THANK-YOU MA NM ¢ LKGEINy SO! soiree onefinestay I1| puitman swissdtel NovoTEL Mercure adagio MAMA 308 ibis ibis ibis, notew=1
Slide 47: Focus on Luxury Strategy
FOCUS ON LUB STRATEGY Chris Cahill
Slide 48: Luxury Hotels FRHI Acquisition Value Drivers
1 2 3 LUXURY FRHI VALUE HOTELS ACQUISITION DRIVERS ACCORHOTELS | INVESTOR DAY – OCTOBER 2016 48
Slide 49: Luxury hospitality demand
Luxury hospitality demand % Luxury Market from Asia-Pacific, Latin America, the Middle East & Africa 25% The 15 fastest growing 19% emerging markets will provide 90% of the growth in 9% consumption of luxury goods in the next 10 years (led by China) 2008 2013 2020 The rising middle class is driving
Slide 50: Luxury Hotels
Luxury Hotels Product Program People Aesthetics vs. Physical Brand Positioning elements Integrated Talent & Culture Services approach Value vs. cost Recognition Business acumen Experiential vs. functional Leadership Luxury is high touch ACCORHOTELS | INVESTOR DAY – OCTOBER 2016 50
Slide 51: FRHI Acquisition: expand portfolio in luxury/upper upscale
FRHI Acquisition: EXPAND PORTFOLIO IN LUXURY/UPPER UPSCALE Three remarkable brands Expanded footprint to the Strengthened our internationally recognized largest and most influential human capital for their iconic Luxury North American market in Luxury hotels and superior customer experience FRHI acq
Slide 52: Integration status
Integration status Successful Day 1 & integration launch Smooth leadership transition on Day 1 All 3 FRHI brands with booking capability on AccorHotels.com Stringent process to continue integration work and synergy realization All teams integrated 300+ employees involved across ~25workstreams Detail
Slide 53: Value drivers
Value drivers A Retain hotel management agreements B Secure key talent C Maintain brand integrity D Maximize performance Key drivers to ensure solid business momentum ACCORHOTELS | INVESTOR DAY – OCTOBER 2016 53
Slide 54: Continuity in hotel management agreements
Continuity in hotel management agreements Secured position for COO Multi-brand for North America Key hotel owners contacted by senior executives Key points of contact for FRHI owners maintained On-going work to provide owners with full benefits from integration All contracts retained ACCORHOTELS | I
Slide 55: Securing key talent
Securing key talent Review of talent Identification and Organizational Best talent profiles and formal tracking of high charts refined for all positions interviews of all potentials done selected candidates finalized Key executives identified and 95% secured ACCORHOTELS | INVESTOR DAY – OCTOBER 2016
Slide 56: Luxury organization designed to drive value
Luxury organization designed to drive value CEO Luxury Talent & Brand Food & Operations Wellness Culture Management Beverage Dedicated resources on service touch points Leverage multi-brand organization for efficiency ACCORHOTELS | INVESTOR DAY – OCTOBER 2016 56
Slide 57: An oasis for the well-travelled (Raffles)
AN OASIS FOR THE WELL-TRAVELLED A true pioneer of worldly elegance and hospitality. Each Raffles hotel offers warm and discreet service, delivering emotional luxury to well-travelled guests. Legendary service since 1887. Charming and Graceful Thoughtful and Welcoming ACCORHOTELS | INVESTOR DAY – OCT
Slide 58: Turning moments into memories (Fairmont)
TURNING MOMENTS INTO MEMORIES Honoring a deep connection with its many communities, Fairmont’s charismatic hospitality is a gateway to cherished memories. Unique architecture, expressive decor and thoughtful service elevate every moment. Unforgettable. Since 1907. Charismatic, Connected, Thoughtful,
Slide 59: Life is Magnifique (Sofitel)
LIFE IS MAGNIFIQUE Where innate French elegance artfully blends with local culture to create exceptional experiences. Authentic Luxury Hotels with a French Soul ACCORHOTELS | INVESTOR DAY – OCTOBER 2016 59
Slide 60: A collection of memorable hotels
A COLLECTION OF MEMORABLE HOTELS Charming boutique hotels where art de recevoir enhances authentic local discovery and shapes memorable moments. Charming Boutique Hotels, Inspiring and Singular ACCORHOTELS | INVESTOR DAY – OCTOBER 2016 60
Slide 61: Our world is your playground
OUR WORLD IS YOUR PLAYGROUND Hotels and resorts in tune with today’s mobile world, connecting performance with enjoyment; always in tempo, definitely in style. In-Style Upscale Hotels, Connecting Performance with Enjoyment ACCORHOTELS | INVESTOR DAY – OCTOBER 2016 61
Slide 62: Life is a journey live it well
LIFE IS A JOURNEY LIVE IT WELL Through quality, efficiency and care, our Swiss hospitality gives guests the peace of mind they need to explore the world and discover life’s true rewards. Vitality. Sustainability. Swissness. ACCORHOTELS / INVESTOR’S DAY 62
Slide 63: A complementary and performing portfolio of luxury/upper upscale brands
A complementary and performing portfolio of luxury/upper upscale brands Luxury Upper Upscale Limited overlap in brand positioning ACCORHOTELS | INVESTOR DAY – OCTOBER 2016 63
Slide 64: Maximize performance
Maximize performance 1 Key metrics 2 B2B strength 3 Leverage loyalty customer base 4 Growth ACCORHOTELS | INVESTOR DAY – OCTOBER 2016 64
Slide 65: Key metrics
Key metrics Employee Guest service Competitive Financial engagement performance results Inspect what you expect ACCORHOTELS | INVESTOR DAY – OCTOBER 2016 65
Slide 66: B2B strength
B2B strength AccorHotels FRHI Sales OTA’s Strength in North American expanded global economies of scale Europe, the Middle strength network East & Asia Leveraging the combined organization ACCORHOTELS | INVESTOR DAY – OCTOBER 2016 66
Slide 67: Leverage loyalty customer base
Leverage loyalty customer base WW - YTD Dec 2015 Members 28M 3,3M Revenue / member c. €600 c. €1,200 Contribution to Total Revenue 28% 36% Combine recognition with reward ACCORHOTELS | INVESTOR DAY – OCTOBER 2016 67
Slide 68: Growth
Growth Dedicated Luxury Branded residential Dedicated Luxury Opportunities with development expertise acquired tech services existing AccorHotels team from FRHI & design team partners Well resourced for expansion ACCORHOTELS | INVESTOR DAY – OCTOBER 2016 68
Slide 69: Summary
Summary FRHI Integration on target Opportunity in markets where we dominate Robust room for growth Brand-specific luxury strategy avoids brand dilution Best practices in complementary brands ACCORHOTELS | INVESTOR DAY – OCTOBER 2016 69
Slide 70: Thank you
y- Feel Welcome THANK YOU oe ae RAFFLES @Yairmont LEGIN) SQ’ soriter |
Slide 71: Leading Digital Hospitality
LEADING DIGITAL HOSPITALITY Vivek Badrinath
Slide 72: Oct. 2014 Statement Review
1 2 3 4 Oct. 2014 PERFORMANCE WHAT WE NEXT STATEMENT ACHIEVEMENTS DELIVERED REVIEW + 2 years ACCORHOTELS | INVESTOR DAY – OCTOBER 2016 72
Slide 73: What we said in October 2014
WHAT WE SAID IN OCTOBER 2014: ACCORHOTELS | INVESTOR DAY – OCTOBER 2016 73
Slide 74: Our assets at the end of the digital plan (2018)
Our assets at the end of the digital plan (2018) 1 The best « mobile first » oriented, scalable distribution system of the 2 One of the largest, highly qualified Guest database of the travel industry hospitality industry 3 An innovative seamless journey solution offering repeated and relevant real-
Slide 75: AccorHotels Digital Plan breakdown
Accorhotels Digital Plan breakdown 3 targets to serve CLIENT DIGITAL ECOSYSTEM Launched in €225m +€25m FASTBOOKING OCTOBER 2014 invested over MarketPlace 5 years = €250m EMPLOYEE PARTNER DISTRIBUTION SYSTEM & BIG DATA IT INFRASTRUCTURE 2 pillars to strengthen ACCORHOTELS | INVESTOR DAY – OCTOBER 201
Slide 76: Major movements on the market confirm relevance of our digital plan
Major movements on the market over the past 2 years, which confirm the relevance of our digital plan Direct Booking Managing Indirect Regulation The European Commission announces 2015 AH launches “Feel 2015 AH acquires 2014 antitrust investigation in the online JUNE Welcome” campaign APRIL Fastbooki
Slide 77: Performance achievements
PERFORMANCE ACHIEVEMENTS + 2 years ACCORHOTELS | INVESTOR DAY – OCTOBER 2016 77
Slide 78: A 5 year investment plan
A 5 year investment plan €225M TO FOSTER GROWTH In €m 73 74 69 66 CAPEX 48 55% Offensive: 40% Defensive: 60% OPEX 25 45% CAPEX 5 5 Plan Capex Opex 2014 2015 2016 2017 2018 Optimization of the investment plan: on track, on time. ACCORHOTELS | INVESTOR DAY – OCTOBER 2016 78
Slide 79: Performance: online inventory
Performance ENLARGING ACCORHOTELS ONLINE INVENTORY WITH THE MARKETPLACE, FRHI & OUR SCOPE EXTENDED TO AND PRIVATE RENTAL HUAZHU, HOTELS DISTRIBUTED VS. RESTAURANTS, MEETING ROOMS JOINED OUR PORTFOLIO* 2014 AND SPAS Properties distributed + 68% 2,000 3,600+ 5,000 properties 500 3,717 3,873 4,300 2,00
Slide 80: Performance: demand generation
Performance BOOSTING DEMAND GENERATION EVERY SINGLE DAY LE CLUB ACCORHOTELS MEMBERS DEMAND per day TARS* BOOKING per day per day 2014 2016E 2014 2016E 2014 2016E + 50% + 60% X2 AccorHotels 45m 69m Rooms 77k 125k New members 11k 24k channels look AccorHotels + 50% E-mails 1.5m 2.3m 28m members by H1
Slide 81: Performance: seamless customer experience
Performance ENRICHING THE SEAMLESS EXPERIENCE FOR OUR CUSTOMERS EASIER, MORE FLEXIBLE PAYMENT FACILITIES A DIGITALIZED CUSTOMER JOURNEY Le Club AccorHotels X2 Online check-in 4,6 X8 1,824 Points burned (k) (bn) 3 1,037 2,2 222 2014 2015 2016 YTD 2014 2015 2016 YTD 250 Fast check-out X 700 2,754 Cust
Slide 82: Performance: infrastructure costs
Performance MANAGING COMPLEXITY WHILE CONTROLLING INFRASTRUCTURE COSTS FOR A MORE EFFICIENT SYSTEM A work unit is defined as a system solicitation For one of the 30 macro functions (look, pricing updates,…) WORK UNIT COST PER WORK UNIT (BILLIONS) BASE 100 2014 2016E 2014 2016 X4 465bn 1.794bn 100 -
Slide 83: Results: ambitious KPIs
Results AMBITIOUS KPIS 1 2 3 4 WEB CHANNEL MOBILE IN DIRECT WEB LE CLUB ACCORHOTELS TARS* CONTRIBUTION CHANNEL CONTRIBUTION Q4 2014 35% 12% 24% 59% H1 2016 37% 18% 31% 63% Tomorrow 50% 40% 40% 70% * AccorHotels Central Reservation System ACCORHOTELS | INVESTOR DAY – OCTOBER 2016 83
Slide 84: What we delivered
3 WHAT WE DELIVERED ACCORHOTELS | INVESTOR DAY – OCTOBER 2016 84
Slide 85: Becoming the leading digital hotelier requires focus on customer journey
Becoming the leading digital hotelier requires a focus on customer journey EXPAND OUR HOSPITALITY EXCELLENCE THROUGHOUT THE CUSTOMER JOURNEY DREAM SELECT BOOK PREPARE STAY RETURN SHARE ACCORHOTELS | INVESTOR DAY – OCTOBER 2016 85
Slide 86: Digital initiatives compared to major hotel chains
Where does AccorHotels’ digital initiatives stand today compared to major hotel chain players H1 2016 DREAM SELECT BOOK PREPARE A September 2016 benchmark* scored the digital initiatives = + + = launched on each step of the customer journey (61 use cases) = STAY SHOWING THAT ACCORHOTELS IS BECOMING
Slide 87: IT Pillar achievements: 4 building blocks
DISTRIBUTION SYSTEM & IT INFRASTRUCTURE IT Pillar achievements: 4 building blocks SCALABLE IN 1 SECOND IRMA: a solution to speed up room Increase since 2014 availability display in a cache mode 4 TARS reservations +30 % OPEN CLOUD FLEXIBLE 900+ availability requests on TARS +125 % API: Application 2
Slide 88: Data Pillar achievements
BIG DATA Data Pillar achievements DIGITAL PLAN PUSHES UP ACCORHOTELS TO BECOME A DATA DRIVEN COMPANY Fuel up net revenue Be more predictive Data everywhere of properties with with customers across the company predictive algorithms Channel Management : New customer segmentation, next Business Datalak
Slide 89: Customer journey: Dream and Select stage
Dream Select Book Prepare Customer journey: reaching hospitality Stay excellence at DREAM and SELECT stage Return Share BENEFITS CLIENT CLIENT EMPLOYEE EMPLOYEE ACCORHOTELS.COM RESTAURANTS BY SOCIAL DESK: Is now a market place ACCORHOTELS: + 500 hotels equipped + 5,000 hotels + 3,600 restaurant fact
Slide 90: Marketplace value proposition well received by independent hoteliers
AccorHotels.com Marketplace value proposition is well received by independent hoteliers Hotels signed Q2 375 Hotels signed aligned with plan 2,000 383 1,500 208 90 53 Other 1,000 Europe 88 131 500 112 82 31 Other Asia 84 2015 2016Q1 2016Q2 2016 E ACCORHOTELS | INVESTOR DAY – OCTOBER 2016 91
Slide 91: AccorHotels.com Marketplace commitments
AccorHotels.com Marketplace 3 commitments ATTRACTIVENESS FOR CUSTOMERS MORE TRAFFIC FOR ACCORHOTELS WILL INCREASE THROUGH BROADER GENERATE ADDITIONAL REVENUE BRANDS AND CURATED OFFERING IN KEY FOR PARTNER HOTELS DESTINATIONS FOR INCREMENTAL BOOKINGS RESULTS : RESULTS : RESULTS : Better offer
Slide 92: One app
One app tablet, smartphone, watch ≈ 5 DOWNLOADS / MIN ON AVERAGE IN JUNE X6 vs 2014 2.8m DOWNLOADS AT JUNE-END 2016 DAU/MAU MEASURES THE DEPTH OF ENGAGEMENT OF THE APP USERS ACCORHOTELS | INVESTOR DAY – OCTOBER 2016 93
Slide 93: Members' rate
Members’ rate ACCORHOTELS DIRECT WEB RATE, ONLY AVAILABLE ON DIGITAL DIRECT CHANNELS BEST PRICE PERCEPTION Improve guests’ perception of “best price” for brand sites vs. OTAS Drive long term PERFORMANCE Higher conversion rate on AH.com Reduce OTA growth AH.com outperforms OTA traffic on some markets
Slide 94: Customer journey: Book and Prepare stage
Dream Select Book Prepare Customer journey: reaching hospitality Stay excellence at BOOK and PREPARE stage Return Share BENEFITS CLIENT CLIENT EMPLOYEE EMPLOYEE BOOK IN ONE CLICK ON LINE CHECK-IN SMART PRICING New features on AH App to shorten + 1.8m in our hotels. A tool to help GMs and Revenue res
Slide 95: Payment card storage with Electronic Personal Wallet
Payment Card storage with Electronic Personal Wallet A ONE CLICK EXPERIENCE improving the CUSTOMER STICKINESS to AccorHotels digital ecosystem SINCE LAUNCH (June 2016) 250,000 CUSTOMERS WITH AN ACTIVE WALLET 60,000 >> high monthly growth + >> over €20,000,000 transaction per week ACCORHOTELS | INVES
Slide 96: Customer journey: Stay stage
Dream Select Book Prepare Customer journey: reaching hospitality Stay excellence at STAY stage Return Share BENEFITS CLIENT CLIENT EMPLOYEE EMPLOYEE MY WEB CONCIERGE FOLS MOBILE DATAVIZ A one-click access to the hotel PMS becomes mobile and hotel teams GMs access hotel daily result services via the
Slide 97: FOLS Mobile: PMS becomes mobile
FOLS Mobile 6 COUNTRIES PILOTING Friendly user design for hotel teams PMS* becomes mobile and hotel teams personalize welcome anywhere *Property Management System TOWARDS FOLS CLOUD PARTNERING WITH MICROSOFT ACCORHOTELS | INVESTOR DAY – OCTOBER 2016 98
Slide 98: Customer journey: Share and Return stage
Dream Select Book Prepare Customer journey: Reaching hospitality Stay excellence at SHARE and RETURN stage Return Share BENEFITS CLIENT EMPLOYEE DEMATERIALIZED LE CLUB ACCORHOTELS CARD VOICE OF THE GUEST LCAH card is always available on AH App to Satisfaction Surveys (GSS) and AH hotels check benefi
Slide 99: Voice of the Guest reputation management
Voice of the Guest reputation management One stop shop to monitor eReputation and improve guest satisfaction Since 2016, hotel Reputation Performance Score included in GM bonus for full customer centricity 3.1m 3,930 Reviews Collected Hotels Equipped Since Jan 1st, 2016 50% 27 Languages Covered Revi
Slide 100: Conquered Leadership Outside North America
Conquered Leadership Outside North America 2008 2009* 2012 2013 2014 2015 2016 Program of the Year / Europe Program of the Year / Middle East - Asia - Oceania Best Promotion / Europe Best Promotion / Middle East - Asia - Oceania Best Elite Program / Europe Best Customer Service / Europe Best Redempt
Slide 101: Building a digital culture for employees
Building a digital culture for employees EMPLOYEE Communication tool available Monthly conferences on Innovation Mini series spreading the digital on personal smartphones for hotel & Digital with an external speaker, awareness among hotel employees. and HQ employees. displayed on Intranet: Available
Slide 102: Easy: Mobile services for deskless employees
Building a digital culture for employees EMPLOYEE Easy: Mobile services for DESKLESS EMPLOYEES 80% OF ACCORHOTELS PEOPLE ACCORHOTELS | INVESTOR DAY – OCTOBER 2016 104
Slide 103: A web portal dedicated to partners
A web portal dedicated to partners PARTNER OPERATING IN 4 COUNTRIES FOR + 600 FRANCHISE PARTNERS Potential Partners Contracted Partners Showcasing AccorHotels Secured access to offers: personalized information: • Brands • Performance dashboards • Services • Hotel visit reports • Partner advantages •
Slide 104: Developing the ability to change is a competitive advantage
Developing the ability to change is a competitive advantage Deployment map of 34 main initiatives with impact on hotel operations (status June 2016) 1 91,000 MAN DAYS BUILD (since launch) 2 6 TO 15 PEOPLE X REGIONS RELAY % Projects deployed ( H1 2016) >70% 3 26 HOTEL LABS 60% - 70% TEST 50 – 60% 4 <
Slide 105: Next
4 NEXT ACCORHOTELS | INVESTOR DAY – OCTOBER 2016 108
Slide 106: A stabilized and consistent digital spend
A stabilized and consistent digital spent Digital initiatives spent in €m 80 70 digital plan €225m 69 new digital initiatives 66 60 50 48 40 37 30 20 10 0 5 2014 2015 2016 2017 2018 2019 2020 ACCORHOTELS | INVESTOR DAY – OCTOBER 2016 109
Slide 107: Priorities for 2017 & 2018
Priorities for 2017 & 2018 TRANSFORMATION TOPLINE FOCUS DIGITAL BACKBONE TO Embark all teams on New initiatives PROVIDE SERVICES TO OWNERS all digital projects to develop business HotelServices robust digital solutions to manage the relationship with owners • Owner database • Worldwide launch of MIC
Slide 108: The journey continues
The journey continues The technology foundations Change management Much more than to support HOTELSERVICES for skillful usage a street fight on bookings, transformation is largely of digital tools is a massive the stakes are around in place or under way endeavor for which AccorHotels the pivot towar
Slide 109: Thank you
y- Feel Welcome THANK YOU MA y ukGINy SOY sorrrec onefinestay J}| pultman swissétel NovoTEL Mercure adagio MAMA 302 ibis ibis ibis, noteuea
Slide 110: Q&A Session
y- Feel Welcome QSA Session RAFFLES amon AkGIN) SO! sorirec onefinestay pullman swissdtel NovoTeL Mercure adagio MAMA 308 ibis ibis ibis, notei=1 SHeLTER sTuLeS ack?
Slide 111: onefinestay, John Paul, Fastbooking
onefinestay, John Paul, Fastbooking Emilie Vazquez Keyvan Nilforoushan Guillaume de Marcillac David Amsellem AccorHotels onefinestay FastBooking John Paul AC C O RHO TE L S | I NV E STO R D AY – O C TO BE R 2 0 1 6
Slide 112: Digital Plan
ACCORHOTELS | INVESTOR DIGITAL PLAN DAY––OCTOBER OCTOBER2016 2016 115
Slide 113: ACCORHOTELS | INVESTOR DAY – OCTOBER 2016
ACCORHOTELS | INVESTOR DAY – OCTOBER 2016 116
Slide 114: ACCORHOTELS | INVESTOR DAY – OCTOBER 2016
ACCORHOTELS | INVESTOR DAY – OCTOBER 2016 117
Slide 115: John Paul & AccorHotels: placing the client at the heart of our attention
JOHN PAUL & ACCORHOTELS PLACING THE CLIENT AT THE HEART OF OUR ATTENTION ACCORHOTELS | INVESTOR DAY – OCTOBER 2016
Slide 116: John Paul, the enhanced concierge
JOHN PAUL, THE ENHANCED CONCIERGE PREMIUM DIGITAL CONCIERGE CUSTOMER LOYALTY The immutable values We build end-to-end loyalty programs of the grand tradition concierge focused on the best customer experience equipped with the latest technology. at every touch point. WORLDWIDE LEADER IN PREMIUM CUSTO
Slide 117: Digital concierge vs. hotel concierge?
DIGITAL CONCIERGE VS. HOTEL CONCIERGE? PRE-STAY STAY POST-STAY FEEL WELCOME… EVERYWHERE! ACCORHOTELS | INVESTOR DAY – OCTOBER 2016 120
Slide 118: Driving customer engagement
W I T H A C C O R HO TEL S ? DRIVING CUSTOMER ENGAGEMENT THE BEST CUSTOMER EXPERIENCE Offering the best of John Paul to enhance the customer journey, from A to Z. BUSINESS KPIS FROM BUSINESS OTHER INDUSTRIES IMPACTS Retention (cf. automotive industry +12%) Optimization of the acquisition costs by hi
Slide 119: Reinventing the travel journey
W I T H A C C O R HO TEL S ? REINVENTING THE TRAVEL JOURNEY THE LARGEST CONCIERGE PLATFORM WORLDWIDE Connecting together 20,000 concierges from AH and 1,000 concierges from JP, we are at scale to offer the most powerful travel platform to the world. DISRUPTIVE BUSINESS APPROACH IMPACTS New agnostic
Slide 120: Launching new verticals
W I T H A C C O R HO TEL S ? LAUNCHING NEW VERTICALS GENERATING NEW PROFITABLE STREAMS OF REVENUES Offering new hospitality services to all the targets: club members, AH clients but also travelers, corporate travelers, local inhabitants… LEVERAGING ON BUSINESS EXISTING CAPABILITIES IMPACTS Offering
Slide 121: Fastbooking
FASTBOOKING
Slide 122: Fastbooking role and focus
FASTBOOKING WW HOSPITALITY MARKET ROLE We are a Digital factory Focusing on the Independent hotel segment 2/3 Independents OUR FOCUS: THINK DIRECT 1/3 We help hoteliers Large Intl Chains Develop an efficient direct online distribution strategy 4 4 125
Slide 123: Fastbooking solutions
FASTBOOKING SOLUTIONS Maximize Drive Bookings & Margins Web Revenue Booking Engine Traffic Acquisition SEM Distribution Manager Display Ads Direct Link (Metasearch) GDS Connectivity Website Design (PMS, CRM, Payment, RMS) Optimization tools (Rate checker, Smart Pricer) ACCORHOTELS | DIGITAL PLAN – O
Slide 124: More than 4,000 hotels – focus Europe & Asia
MORE THAN 4 000 HOTELS – FOCUS EUROPE & ASIA
Slide 125: What AccorHotels brings to us
WHAT Resources ACCORHOTELS BRINGS TO US… Access to new markets Leverage on partners 128
Slide 126: What we bring to AccorHotels
Connectivity Hub WHAT WE BRING TO ACCORHOTELS Agile development … Ad Hoc web solutions New revenue opportunities 129
Slide 127: The Digital Factory
FAST The Digital Factory
Slide 128: Thank you
THANK YOU AC C O RHO TE L S | I NV E STO R D AY – O C TO BE R 2 0 1 6
Slide 129: HotelInvest
HOTELINVEST John Ozinga AC C O RHO TE L S | I NV E STO R D AY – O C TO BE R 2 0 1 6
Slide 130: Disclaimer
Disclaimer By attending the meeting where this presentation is made, or by reading the following presentation slides, you further agree to be bound by the following limitations and qualifications: This presentation includes only summary information and does not purport to be comprehensive. The infor
Slide 131: The HotelInvest journey started late 2013
The HotelInvest journey started late 2013 Embarked teams Created and Changed in a new brought mindsets dedicated a true real estate focused on value organization culture creation A new major business line created delivering strong value creation in just 2.5 years ACCORHOTELS | INVESTOR DAY – OCTOBER
Slide 132: Agenda
Agenda 1 2 A SUCCESSFUL REPOSITIONING A NEW GROWTH STRATEGY: INITIATED IN NOVEMBER 2013 BOOSTER PROJECT ACCORHOTELS | INVESTOR DAY – OCTOBER 2016 135
Slide 133: A successful repositioning initiated in November 2013
1 A SUCCESSFUL REPOSITIONING INITIATED IN NOVEMBER 2013
Slide 134: New group organization focused on two core competencies
Late 2013, AccorHotels implemented a new group organization to focus on two core competencies to accelerate value creation HOTELINVEST HOTELSERVICES Hotel owner & investor Hotel operator & franchisor FEES TO HOTELSERVICES BUSINESS PROFILE BUSINESS PROFILE Hotel operator & Brand Hotel owner & investo
Slide 135: HotelInvest long-term vision
HotelInvest long-term vision Manage and rationalize portfolio Deliver high & stable cash-flows Become Create value through renovations & repositioning the leading hotel investor in Europe Natural partner for AccorHotels development Develop in a sustainable way ACCORHOTELS | INVESTOR DAY – OCTOBER 20
Slide 136: Key achievements over the past years
Key achievements over the past years Implementation Ambitious asset of a dedicated management restructuring program delivered structure and organization Repositioned profile More focus on Owned hotels Development program delivering significant More resilient portfolio incremental value Geared toward
Slide 137: HotelInvest today
HotelInvest today SIZEABLE EUROPEAN ECO & MIDSCALE VALUE ORIENTED PROFITABLE ~ 1,183 ~ 87% ~ 90% ~ €7.3bn 7.8% hotels of asset value of asset value GAV EBIT margin 2015 as of 30/06/16 ACCORHOTELS | INVESTOR DAY – OCTOBER 2016 140
Slide 138: HotelInvest segments
HotelInvest segments ~50% ~40% ~10% ECO/BUDGET MIDSCALE LUXE/UPSCALE ~ 90% of portfolio value on eco & midscale assets ACCORHOTELS | INVESTOR DAY – OCTOBER 2016 141
Slide 139: A strong evolution of the portfolio mix
A strong evolution of the portfolio mix Portfolio evolution 2012 2016e over the last 4 years Owned hotels 301 hotels ~ 325 hotels +8% Variable lease hotels 761 hotels ~ 570 hotels (25)% Fixed lease hotels 355 hotels ~ 240 hotels (32)% Repositioned portfolio reducing exposure to leases ACCORHOTELS |
Slide 140: Dynamic portfolio restructuring
Dynamic portfolio restructuring 2014 2015 2016e Total Hotel Mostly leases converted to ownership 117 7 47 171 acquisition Hotel S&FB / S&MB of single 46 89 168 303 disposals or portfolio of assets Lease Re-negotiations of lease agreements 7 87 23 117 restructuring TOTAL 170 183 238 591 Almost 600 op
Slide 141: Portfolio reshaping in line with objectives set in 2013
Portfolio reshaping in line with objectives set in 2013 INCREASE OF INCREASE OF AAA FOCUS ON CONTRIBUTION FROM NUMBER OF HOTELS HOTELS WITH HIGHEST HOTELS WITH POSITIVE NOI IN PORTFOLIO GOP 49% 2012 66% 38% level of hotels with GOP of hotels with positive NOI of hotels with AAA location margin above
Slide 142: Portfolio evolution overview
Portfolio evolution overview END OF 2012 2016e Owned Owned 21% 38% Variable Variable # of rooms lease lease 55% Fixed lease 37% 24% Fixed lease 24% Net Leased Owned Leased Owned operating 50% 50% 39% 61% income ACCORHOTELS | INVESTOR DAY – OCTOBER 2016 145
Slide 143: Portfolio repositioning leading to outstanding financial performance
Portfolio repositioning leading to outstanding financial performance EBIT RECURRING CASH FLOW (NOI) EBIT margin €378m +92% + 67% €437m €292m €364m €197m 7.8% €262m 6.1% 4.1% 2013 2014 2015 2013 2014 2015 EBIT margin has almost doubled during the last 2 years ACCORHOTELS | INVESTOR DAY – OCTOBER 2016
Slide 144: Significant value creation for shareholders
Significant value creation for shareholders ASSET MANAGEMENT ~€1.0bn ~€2.3bn + €1.3bn ~€7.3bn + €1.7bn €(0.7)bn + €0.5bn + €1.3bn ~€4.5bn A gross return of ~50% on GAV (unlevered pre-tax IRR of ~18%) Not e (*): Incl ude a cquis it ion of F RHI Owned a nd L ea s ed a s s et s for € 0 .1 bn ACCORHOTEL
Slide 145: Development program creating significant value
Development program creating significant value Munich - Arnulfstrasse London - Canary Wharf Combo Ibis & Novotel Novotel Opening: sept. 2015 Opening: nov. 2016 204 Ibis & 185 Novotel rooms 313 rooms Fully owned Fully owned Value creation Value creation £107m + 47 % €78m +18% £91m €53m Capex Appraisa
Slide 146: Focus on Gross Asset Value (GAV)
Focus on Gross Asset Value (GAV) METHODOLOGY PROCESS TYPE OF ASSET VALUATION Three international independent Two types of interests to value Valuation method: Discounted appraisers: BNPP Real Estate, Cash Flow on a hotel by hotel Real Estate and business Jones Lang LaSalle and Cushman basis interest
Slide 147: Focus on Gross Asset Value (GAV) assumptions
Focus on Gross Asset Value (GAV) CAPITALIZATION RATE ON NOI & DISCOUNT RATE CONSTRUCTION FREE RISK YIELD ASSUMPTIONS EXIT CAPITALIZATION RATE COUNTRY + + HOTEL INDUSTRY AVERAGE INFLATION Over cash flow duration + = OWNERSHIP DISCOUNT RATE + ASSUMPTIONS ASSET GEOGRAPHICAL LOCATION + SPECIFIC PREMIUM
Slide 148: A new growth strategy: Booster Project
2 A NEW GROWTH STRATEGY: BOOSTER PROJECT
Slide 149: Booster Project overview
Booster Project overview FIRST STEP IS TO CREATE AN INDEPENDENT LEGAL ENTITY 100% New legal entity HotelServices MAJORITY OF Management contracts HOTELINVEST ASSETS Brand owner, asset light operator Owned & Leased and digital player Assets owner ACCORHOTELS | INVESTOR DAY – OCTOBER 2016 152
Slide 150: Booster Project overview
Booster Project overview SECOND STEP IS TO OPEN HOTELINVEST TO INVESTORS Less than 50% More than 50% Long-term institutional investors Booster legal entity NEW DEBT HotelServices MAJORITY OF Management ~€2.0bn contracts HOTELINVEST ASSETS Brand owner, asset light operator Owned & Leased and digital
Slide 151: Perimeter overview
Perimeter overview ~1,135 HOTELS EXPECTED END OF 2016 IN BOOSTER PROJECT REMAINING IN AH ~90% ~10% ~1,000 hotels Owned & Leased (~130k rooms) Orbis ~43% in France Management Leases* ~47% in Europe (excl. France) ~10% in the Rest of the world Selected Joint Ventures such as Grape Hospitality * Leases
Slide 152: Booster to focus on European hotels
Booster to focus on European hotels BOOSTER TOTAL GAV OF ~€6.5BN BOOSTER GAV BY LOCATION BOOSTER GAV BY GEOGRAPHY CCC AsPac Africa BBB 5% 4% 3% 16% LatAm 7% AAA Europe 79% France (excl.France) 26% 60% ~80% of GAV Over 85% of GAV from hotels in premium locations from hotels in Europe ACCORHOTELS | IN
Slide 153: Ready for its next phase of growth
Ready for its next phase of growth PROJECT BOOSTER Capitalize on long term management INVESTMENT MATRIX agreements with AccorHotels Expected Development return Deploy capital on value creative hotel renovations Major renovations Continued acquisitions of best performing assets Acquisition of real es
Slide 154: Management contract framework with AccorHotels
Management contract framework with AccorHotels ECONOMICS DURATION PERFORMANCE CLAUSES Global economics Long term Performance clauses in line with management contracts in line with market existing framework (>40 years) standards ACCORHOTELS | INVESTOR DAY – OCTOBER 2016 157
Slide 155: Solid foundations established for a long term sustainable project
Solid foundations established for a long term sustainable project Great teams Restructured Sound growth Strong continued motivated to go portfolio potential through relationship with ahead for a new delivering refurbishment and journey improved results development ACCORHOTELS | INVESTOR DAY – OCTOBE
Slide 156: We are now in a unique position to embark on a new journey of growth
We are now in an unique position to embark on a new journey of growth ACCORHOTELS | INVESTOR DAY – OCTOBER 2016 159
Slide 157: Thank you
THANK YOU AC C O RHO TE L S | I NV E STO R D AY – O C TO BE R 2 0 1 6
Slide 158: Finance
Gt RAFFLES (Faw Fee Welcome FINANCE J ean-] acques Morin Chief Financial Officer MA NK ZRGINy SOQ! soiree onefinestay J] pullman swissdtel NOVOTEL Mercure adagio MAMA 398 ibis ibis ibis, hoteirt sTules xa
Slide 159: Transformation acceleration
Transformation acceleration ASSET DIGITAL & NEW BRAND PORTFOLIO RESTRUCTURING BUSINESSES EXPANSION Booster Launch Grape John Paul Hospitality FRHI Huazhu Onefinestay Marketplace Squarebreak Fastbooking Oasis HotelInvest Mama HotelServices Tritax & Shelter New organization Moorpark Digital Plan Launc
Slide 160: Agenda
Agenda 1 2 BOOSTER PROJECT FINANCIAL IMPLEMENTATION ACCORHOTELS TOMORROW ACCORHOTELS | INVESTOR DAY – OCTOBER 2016 163
Slide 161: Booster Project Financial Implementation
1 BOOSTER PROJECT FINANCIAL IMPLEMENTATION
Slide 162: Booster project overview
Booster project overview 100% <50% Booster Legal Entity HotelServices Majority of Brand owner, Management HotelInvest assets contracts asset light operator Owned & Leased and digital player Assets owner ACCORHOTELS | INVESTOR DAY – OCTOBER 2016 165
Slide 163: Published HotelInvest financials at a glance
Published HotelInvest financials at a glance Growth In €M FY 13 FY 14 FY 15 Rents - D&A 13-15 Revenues 4,798 4,794 4,815 - 868 828 EBITDAR 1,354 1,401 1,424 +5% 770 % Margin 28.9% 29.2% 29.6% +70bps EBITDA 486 573 654 +35% 289 281 276 % Margin 10.1% 11.9% 13.6% +350bps EBIT 197 292 378 +92% % Margin
Slide 164: Booster project on track
Booster project on track PERIMETER ACCOUNTING Asset perimeter almost finalized Combined audited accounts launched Valuations updated Pro forma accounts initiated Organization/ Corporate costs Discontinued operations analysis allocation in progress LEGAL & TAX FINANCING Legal structure step plan in p
Slide 165: Solid financing structure for HotelInvest
Solid financing structure for HotelInvest €7.3BN GROSS ASSET VALUE (JUNE 16) STANDALONE FINANCING STRUCTURE DAY 1 POSITIVE MARKET CONDITIONS External debt drawn Day 1 sized at ca. 2BN (60% of owned asset value) Historically low interest rates Additional credit facilities to be negotiated to fund fut
Slide 166: Tax structuring
Tax structuring Past years acquisitions structured to facilitate global transfer of assets STRUCTURING Transfers of assets mainly through sales or contribution of shares benefitting from “participation-exemption” regimes. Anticipated partial demergers generally tax neutral and comforted by tax rulin
Slide 167: Booster project indicative timeline
Booster project indicative timeline Formal Project Launch Contemplated AGM Jul 12, 2016 Mid-2017 PREPARATION PHASE EXECUTION PHASE Board initial review Apply for tax rulings & produce audited Perimeter definition financial statements Validation of legal and tax schemes Implement legal schemes Key or
Slide 168: AccorHotels Tomorrow
2 ACCORHOTELS TOMORROW
Slide 169: AccorHotels 2015 current P&L
AccorHotels 2015 current P&L €m CORPORATE HOTELSERVICES HOTELINVEST & INTERCOS ACCORHOTELS Revenue 1,339 4,815 (574) 5,581 EBITDAR 426 1,424 (70) 1,780 EBITDAR Margin 31.8% 29.6% N/A 31.9% EBITDA 399 654 (66) 986 EBITDA Margin 29.8% 13.6% N/A 17.7% EBIT 359 378 (71) 665 EBIT Margin 26.8% 7.8% N/A 11
Slide 170: AccorHotels P&L
AccorHotels P&L 2015 KEY ADJUSTMENTS MID TERM PUBLISHED €m Revenue 5,581 Revenues divided by 2 HotelInvest EBITDA 986 deconsolidation Central costs allocation EBITDA Margin 17.7% FRHI EBIT 665 New Businesses EBIT margin EBIT Margin 11.9% doubled ACCORHOTELS | INVESTOR DAY – OCTOBER 2016 173
Slide 171: Illustrative impact on AH financial structure
Illustrative impact on AH financial structure Assuming 50%-80% disposal on €6.5bn gav JUNE 2016 JUNE 2016 Pro forma FRHI & John Paul Acquisitions Pro forma FRHI & John Paul Acquisitions Illustrative Booster proceeds Before cash allocation to HotelInvest POSITIVE EFFECT ON ACCORHOTELS CREDIT PROFILE
Slide 172: Optionality for a disciplined capital allocation
Optionality for a disciplined capital allocation Further investment in current brands Significant capacity to finance bolt-on and pipeline of new hotel properties and /or transformational acquisitions ORGANIC SELECTIVE Addition of niche brands to cater GROWTH Building-out digital portfolio into M&A
Slide 173: Transformation & performance measurement
Transformation & performance measurement 2013 TODAY TOMORROW ASSET Underperforming asset base Better valued asset base Asset light pure-play BASE Inefficient balance sheet Improved balance sheet Deleveraged balance sheet KEY EBITDAR & EBITDAR margin EBIT & EBIT margin Network & Gross Volume PERFORMA
Slide 174: Finance on top of in-depth Group's transformation
Finance on top of in-depth Group’s transformation ACCORHOTELS | INVESTOR DAY – OCTOBER 2016 177
Slide 175: Thank you
>» Feel Welcome THANK YOU MA NM ZRGINy SOQ! soiree onefinestay J] pullman swissdtel NOVOTEL Mercure adagio MAMA 302 ibis ibis ibis, noteura
Slide 176: Closing Remarks
CLOSING REMARKS Sébastien Bazin
Slide 177: Key achievements from 2013 Roadmap
Key achievements from 2013 Roadmap ORGANIZATION Distinct and coordinated teams and Asset management plan being REAL Business Units with clear objectives delivered, combining acquiring ESTATE Both on track, on plan, on budget, and and selling properties, unlocking now facing new external challenges s
Slide 178: 2013-2016 Incremental initiatives
2013-2016 Incremental initiatives Transforming acquisition of FRHI JV allowing AccorHotels to HOTEL CHINA participate in the fastest-growing CONSOLIDATION Mama Shelter and soon largest emitting market FastBooking, key to marketplace Private rental with onefinestay, New Talent & Culture organization
Slide 179: Structured and bolt-on strategy
Structured and bolt-on strategy ESSENTIAL IMPORTANT SMART Organization around two business lines New Shadow Comex onefinestay / OASIS / Squarebreak Transformation of HotelInvest Acquisition of John Paul New Services to locals & Booster Project FRHI Acquisition Food & Beverage Marketplace "Client Fir
Slide 180: A key growth driver for the future AccorHotels Development
A key growth driver for the future AccorHotels DEVELOPMENT A structural change in our revenue and profit mix 40-45 kr Pipeline is stronger than ever 30-35 kr 50% of fees 30% of fees 25% of openings 20% of openings Potential for growth is sustainable over long term 30% of fees 25% of fees 30% of open
Slide 181: Enlarged DNA, new talents, strong brand equity and substantial synergies
Enlarged DNA, with new talents, strong brand equity and substantial synergies LUXURY BRANDS Competitive positioning in the Luxury tier FRHI synergies per plan 193 82 Maximized performance 277 183 111 Accorhotels now a heavyweight 96 52 champion in luxury Marriott AccorHotels IHG Hyatt Hilton Starwoo
Slide 182: AccorHotels far ahead on Digital Hospitality
AccorHotels far ahead on Digital Hospitality DIGITAL 2008 2009* 2012 2013 2014 2015 2016 Program of the Year / Europe The plan bears fruits Program of the Year / Middle East - Asia - Oceania Best Promotion / Europe Incremental initiatives Best Promotion / Middle East - on top of original plan Asia -
Slide 183: A global operator & provider of Hospitality & daily life services
A global operator & provider of Hospitality & daily life services NEW INITIATIVES DISTRIBUTION GUEST PROGRAM PLATFORM Luxury / curated private homes Incremental initiatives to reinforce B2C focus A new stream of high margin business CONCIERGERIE DIGITAL SERVICES B2C SERVICES TO HOTELIERS ACCORHOTELS
Slide 184: Time to leverage and unlock value to create options
Time to leverage and unlock value to create options HOTELINVEST & BOOSTER A successful execution Sum of NOI 2014, 2015, H1 2016 €2.3bn Transformation almost complete + €1bn Booster project on the right track + €1.3bn New phases ahead for both Accorhotels hotelinvest Net value Cumulated NOI Total inc
Slide 185: Highly disciplined capital allocation
Highly disciplined capital allocation ORGANIC Consolidate leaderships and SELECTIVE Continue to screen potential tactical GROWTH seize new market opportunities M&A acquisitions with a focus on building a consistent portfolio of Services Expand services and offer to guests & partners Capture Core M&A
Slide 186: Key Success factors for AccorHotels
Key Success factors for AccorHotels Create PREFERENCE and raise AWARENESS Brand equity and community Guest loyalty and daily life services GUESTS ORIENTED Offer wide & curated CHOICE Extensive coverage of locations & lodging segments Multiple brand offer for specific experience & personalized servic
Slide 187: How to win
How to win Progressively extend Constantly increase our Leverage on the into a leading performance as a creativity and “DIGICAL” PROVIDER OF TOP QUALITY SERVICE commitment of our HOSPITALITY SERVICES PROVIDER TO OWNERS INSPIRED TEAMS MAXIMIZE VALUE CREATION FOR SHAREHOLDERS ACCORHOTELS | INVESTOR DA
Slide 188: Q&A Session
y- Feel Welcome QSA Session RAFFLES amon AkGIN) SO! sorirec onefinestay pullman swissdtel NovoTeL Mercure adagio MAMA 308 ibis ibis ibis, notei=1 SHeLTER sTuLeS ack?
Slide 189: Thank you
yy Feel Welcome THANK YOU AA y ukGINy SOY sorrrec onefinestay Jk] pultman swissétel NovoTEL Mercure adagio MAMA 302 ibis ibis ibis, noteu-a