Covivio Hotels - Full year 2024 results: A year of growth and transformation

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PRESS RELEASE Paris, 18 February 2025 Covivio Hotels annual results for 2024: A year of growth and transformation Hotel market: positive momentum in Europe continued in 2024 The European hotel sector benefited from a good momentum in 2024, with the continued increase in RevPAR, by 4% on average, supported by the increase in prices and a slight increase in occupancy rates. Southern Europe contributed to this performance and in particular Spain, with a +13% increase in RevPAR. Germany continued to catch up, posting a +7% increase. France recorded more moderate results (+2%), with the wait-and-see attitude of tourists during the preparatory phase of the Olympic Games having partly offset the good performance of the summer. Hotel investment in Europe in 2024 was up by 34%, at €19.5 billion and now represents 9.5% of total real estate investment volumes. The Statutory Auditors' report on the annual financial information is in the process of being issued. covivio.eu Follow us on Twitter @covivio_ And on social media 1 COVIVIO HOTELS PRESS RELEASE Major consolidation transaction with AccorInvest In this context, Covivio Hotels had a particularly active year in 2024. At the end of November, the Group signed the transaction to consolidate the ownership of operating and property companies of hotels held jointly with AccorInvest, for a total exchange value of nearly €800 million. Until the end of November 2024, Covivio Hotels held the property companies of 54 hotels, let to the AccorInvest group as variable rent based on revenue, under long-term leases. AccorInvest owned the operating companies assets for these hotels and signed long-term management contracts with the Accor Group. Covivio Hotels was also, indirectly, owner and asset manager for a further 60 hotels let to AccorInvest and held via two joint ventures, established in 2010 and 2014 respectively: one is 80% held by Crédit Agricole Assurances and 20% by Covivio Hotels, while the other is shared between Caisse des Dépôts et Consignations, Société Générale Assurances and Covivio Hotels. The transaction involves the acquisition by Covivio Hotels (and its partners for the two joint ventures) of 43 operating companies 1 - thereby enabling them to be consolidated as properties owned and operated by Covivio Hotels - in exchange for the transfer to AccorInvest of 16 other hotel property companies, subsequently owned by AccorInvest. These consolidation transactions for Covivio Hotels and the joint-ventures represent a total of €393 million 2 for the hotel property companies sold by Covivio Hotels and its partners, equivalent to that of the operating companies owned and operated by the companies whose shares were acquired. The deal enables Covivio Hotels to strengthen its presence in the hotel sector in major tourist areas with considerable potential for value creation through repositioning and management optimization. Of the 43 hotels concerned, 14 are directly managed by the Covivio Hotels operational platform: WiZiU . Covivio Hotels also relies on two other players: Atypio and Sohoma, which will operate 12 and 10 establishments respectively, via management contracts. Five hotels are still operated by Accor. The Covivio Hotels hotel portfolio is now 62% lease assets, mainly fixed, and 38% operating properties assets. This transaction strengthens Covivio Hotels' transition from a real estate investor approach to an asset manager and hotel operator approach. Today, the Group supports nearly twenty brands in Europe, with an increasingly diversified model (assets under lease or assets in operating properties). Acquisition of a 4-star hotel in the Canary Islands, Spain's leading tourist destination Covivio Hotels also acquired for nearly €81 million including transfer taxes, a hotel located in Tenerife, in the Canary Islands, Spain's leading tourist destination with 69.7 million overnight stays in 2023 (20% of the national total), and the only leisure destination in Europe without seasonality. The temperate climate of the island allows the hotel to be open all year round, with an average occupancy rate of between 85% and 90%. The establishment consists of 429 rooms, a restaurant, 3 bars, 3 swimming pools, a gym, squash and volleyball courts, as well as 2 meeting rooms that can accommodate up to 140 people. Renovated in 2021, it has a solid environmental performance, with a carbon footprint of 18.9 kgCO 2 e/m²/year in 2023, in line with CRREM objectives 3 . Through the acquisition of shares in hotel operating companies Duties included, at 100% CRREM: Carbon Risk Real Estate Monitor 2 COVIVIO HOTELS PRESS RELEASE With a stabilised yield of around 6.75%, the hotel is leased on the basis of a firm triple net lease until 2041 with Iberostar, Spain's number 5 hotel operator which the Spanish Fluxa family has owned for 60 years. This first significant acquisition in Southern Europe marks Covivio Hotels' desire to strengthen its presence in the main tourist destinations in Southern Europe (Spain, Italy and Portugal). Four hotel renovations completed during the year: strong revenue growth In 2024, Covivio Hotels renovated two hotels in Lille and one hotel in Bruges, as well as a hotel leased to Melia in Malaga. These projects represent 458 keys, works worth a total of €28.5 million and a yield of more than 15%. Covivio Hotels has set up the new Novotel concept in Bruges, after having created 12 additional rooms and renovated the lobby and service areas. In Lille, two deliveries took place during the year: the Hilton Lille (replacing Crowne Plaza) after a complete renovation of the rooms, and the Grand Hôtel Bellevue located in the heart of the Grand Place de Lille, after the creation of five rooms and a rooftop bar. €455 million of disposals at margins higher than 2023 values At the same time Covivio Hotels signed new disposal commitments totaling €455 million in Group share (€606 million at 100%): 43 properties in France for €333 million, including 31 Accor-branded hotels, six hotels in Germany (€62 million), four in Poland (€34 million), one in Spain (€17 million) and one in Belgium (€9 million). The commitments were signed at a margin of around +4% over end-2023 appraisal values, reflecting strong investor appetite for the hotel industry. Portfolio up by +1.5%, driven by higher revenues and hotel renovation At the end of December 2024, Covivio Hotels held a portfolio worth €5,818 million (€6,439 million at 100%), characterized by: high-quality locations: the average grade given for "location" by customers on Booking.com is 8.9/10; a diversified portfolio, in terms of countries (12 countries), segments (66% of economy and mid-range hotels and 34% of high-end hotels) and partner operators (17 including leaders in Europe such as Accor, Marriott, IHG, NH and B&B); long-term leases of 11.0 years firm on average. Group Share (€ millions, excluding duties) Value 2023 Value 2024 Hotel lease properties 4 434 3 593 Hotel Operating properties 1 337 2 226 Total Hotels 5 771 5 818 Non-Strategic (Retail) 51 43 Total Covivio Hotels 5 822 5 861 1 LfL : Like-for-like 2 Yield excluding duties LfL change 1 Yield 2023 2 Yield 2024 2 1.4% 5.8% 6.0% 1.7% 6.2% 7.0% 1.5% 5.9% 6.4% -7.4% N/A N/A 1.4% 5.9% 6.4% At like-for-like scope, the hotel portfolio was up +1.5% over a year. The growth mainly concerns hotels in France (+2%) and in Southern Europe (+4.8% in Italy, +3.4% in Spain), driven by the increase in revenues and asset management. 3 COVIVIO HOTELS PRESS RELEASE The hotel portfolio has an average yield excluding transfer taxes of 6.4% (+50 bps over one year), of which 6% on the lease portfolio and 7% on the operating properties portfolio. Hotel portfolio breakdown at 31/12/2024 (Group share) 4 Successful refinancing, increased debt maturity and strengthened liquidity Three new financings for an amount of €880 million were arranged in 2024, making it possible to refinance future maturities. In particular, in May 2024 Covivio Hotels carried out a €500 million Green Bond issue with a nine-year maturity and a 148-bps margin spread over the mid-swap rate. The fixed rate of the issue was largely swapped for a floating rate in order to leverage the Group's hedging position. The net debt of Covivio Hotels decreased to €2,119 million in Group share compared to €2,260 million at 31 December 2023, for a rate of 2.33% at the end of December and an average maturity up by 1.2 4 Others: Hungary, Portugal, Czech Republic, Ireland and Poland. 4 COVIVIO HOTELS PRESS RELEASE years, to 4.8 years. Covivio Hotels had a strengthened debt coverage ratio of 95% at the end of December 2024 (compared with 89% at the end of 2023), with a high hedging maturity of 5.6 years. At 31 December 2024, the LTV (Loan To Value) stood at 32.5%, down -1.9 points compared to 2023. The interest coverage ratio (ICR) was 6.09x, an improvement compared to the end of 2023 (5.38x). The net debt/EBITDA ratio stood at 7.6x compared to 8.5x at the end of 2023. Covivio Hotels had €891 million liquidity (including undrawn credit lines) as of 31 December 2024. As part of its annual review, S&P Global Ratings confirmed Covivio Hotels' BBB+ stable outlook rating, in line with the overall Covivio rating. This confirmation recognizes the solidity of the company's operational and financial profile. S&P also upgraded Covivio Hotels' standalone rating from BB+ to BBB- Revenue growth: +7.2% like-for-like The good results of the hotel market and our hotels over the year resulted in revenue growth of +4.1% on a current basis and +7.2% on a like-for-like basis, to €334.6 million compared to €317.3 million as of 31 December 2023. € million 2023 2023 2024 2024 Group Group Share Share LFL 100% Group Share 100% Group Share (%) (%) (*) Hotel Lease properties (Variable rents) 71.3 71.3 74.5 74.5 4.4% 31.2% Hotel Lease properties (Others) 186.3 173.4 193.5 179.9 3.7% 4.3% Hotel Operating properties (EBITDA) 74.6 72.5 82.6 80.3 10.7% 4.9% Total Hotel Revenues 332.3 317.3 350.6 334.6 5.5% 7.2% Non-strategic (Retail) 6.3 6.3 2.1 2.1 -66.4% n.a Total revenues Covivio Hotels 338.6 323.6 352.7 336.7 4.1% 7.2% (*) On a like for like basis Hotel lease properties (76% of hotel revenue group share) Variable-rent hotels (22% of hotel revenue): the portfolio is mainly let to AccorInvest, in France and Belgium, and also includes the variable-rent portion of the minimum guaranteed rent leased assets located in Spain, Italy, and the UK. The 31.2% like-for-like year-on-year increase was driven by the excellent performance from hotels in Southern Europe. Fixed-rent hotels (54% of hotel revenue): rents up +4.3% like-for-like, mainly due to rental indexation (+5.6% in France, +3.8% in Germany, and +3.6% in Spain). The occupancy rate remained at 100% across the leased hotel portfolio. Hotel operating properties (24% of hotel revenue group share) Most of these hotels are located in Germany and France. Like-for-like EBITDA for operating properties rose +4.9% year-on-year, mainly driven by good hotel performances in Berlin and Nice. Revenues from operating hotels include the EBITDA for the month of December of the assets taken over as part of the consolidation operation with AccorInvest (+€5.0 million). Growth in recurring net income of +8% in 2024 Recurring net income (EPRA Earnings) was €258.1 million at the end of December 2024, up +8.1% from €238.8 million a year earlier, boosted by revenue growth. EPRA Earnings per share amounted to €1.74, also up +8.1% from €1.61 the previous year. 5 COVIVIO HOTELS PRESS RELEASE The EPRA NTA (net tangible assets) NAV stood at €3,815 million, compared with €3,550 million at the end of 2023. On a per-share basis, it was €25.8, up +7.5% compared with the end of 2023. The EPRA NDV NAV, which takes account of the fair value adjustment of interest rate hedges and fixed-rate debt, rose to €3,690 million, from €3,512 million at end-December 2023, up +5.1%. It stands at €24.9/share. Proposed dividend of €1.50/share, up +15% At the 15 April 2025 General Meeting, Covivio Hotels will propose a dividend of €1.50 per share, up +15% (€1.30 per share in 2023), putting the pay-out ratio at 86%. In order to support its development, Covivio Hotels will offer its shareholders the possibility of opting for the payment of this dividend in shares 5 . This payment option aims to give Covivio Hotels additional resources to accelerate its development in Europe. 2025 outlook As a leader in hotel real estate in the main European markets, Covivio Hotels intends to continue its development and Asset Management to extract the potential of its existing portfolio. 5 Subject to approval by the Shareholders' Meeting of 15 April 2025 6 COVIVIO HOTELS PRESS RELEASE CONTACTS Press Relations Investors Relations Géraldine Lemoine Vladimir Minot Tel: +33 (0)1 58 97 51 00 Tel: +33 (0)1 58 97 51 94 [email protected] [email protected] Louise-Marie Guinet Tel: +33 (0)1 43 26 73 56 [email protected] ABOUT COVIVIO HOTELS Covivio Hotels specializes in owning business premises in the hotel sector. A listed real estate investment company (SIIC), a real estate partner of the major players in the hotel industry, Covivio Hotels holds assets worth € 6.4 billion by the end of December, 2024. Covivio Hotels is graded BBB+ / Stable outlook by Standard and Poor's. ABOUT COVIVIO Thanks to its partnering history, its real estate expertise and its European culture, Covivio is inventing today's user experience and designing tomorrow's city. A preferred real estate player at the European level, Covivio is close to its end users, capturing their aspirations, combining work, travel, living, and co-inventing vibrant spaces. A benchmark in the European real estate market with €23.0bn in assets, Covivio offers support to companies, hotel brands and territories in their pursuit for attractiveness, transformation and responsible performance. Build sustainable relationships and well-being, is the Covivio's Purpose who expresses its role as a responsible real estate operator to all its stakeholders: customers, shareholders and financial partners, internal teams, local authorities but also to future generations and the planet. Furthermore, its living, dynamic approach opens up exciting project and career prospects for its teams. 7 COVIVIO HOTELS PRESS RELEASE APPENDICES Covivio Hotels, a 52.5%-owned subsidiary of Covivio as of 31 December 2024, is a listed property investment company (SIIC) and leading hotel real-estate player in Europe. It invests both in hotels under lease and hotel operating properties. The figures presented are expressed at 100% and in Covivio Hotels Group share (GS). Covivio owns a high-quality hotel portfolio (283 hotels / 39,477 rooms) worth €6.4 billion (€5.8 billion in Group share), focused on major European cities and let or operated by 17 major hotel operators such as Accor, B&B, IHG, NH Hotels, Mariott, etc. This portfolio offers geographic and tenant diversification (across 12 European countries) and asset management possibilities via different ownership methods (hotel lease and hotel operating properties). The asset swap with AccorInvest, finalized at the end of November 2024, impacted the income statement in December. 1. Hotels market: continued growth European hotels performance was robust again in 2024. The average RevPAR (revenue Per Available Room) in Europe shows an average increase of +4% year-on-year in 2024, as the market continues its positive momentum, supported by the rise average prices but also in occupancy. Southern European countries are showing very strong performances, particularly Spain up by +13%. Germany is continuing to catch up with a RevPAR growth of +7% over the year. In France, RevPAR growth is more modest at +2%, impacted by travel delays during the pre- Olympic period. On the investment side, volumes displayed one of the highest growths for a single asset class in Europe, reaching €19.5 billion 2024, +34% vs. 2023, according to CBRE. 8 COVIVIO HOTELS PRESS RELEASE Assets partially owned by Covivio Hotels include mostly: 91 B&B assets in France, including 89 held at 50.2% and 2 held at 31.2% 22 AccorInvest assets, including 21 assets in France et 1 asset in Belgium, between 31.2% and 33.3% owned. 2. Accounted revenues: +7;2% on a like-for-like basis (In € million) Change Change Revenues Revenues Revenues Revenues Group (%) 2023 2023 2024 2024 share Group 100% Group share 100% Group share (%) share LfL 1 Hotel Lease properties - Variable 71.3 71.3 74.5 74.5 +4.4% +31.2% Hotel Lease properties - Fixed 186.3 173.4 193.5 179.9 +3.7% +4.3% Operating properties - EBITDA 74.6 72.5 82.6 80.3 +10.7% +4.9% Total revenues Hotels 332.3 317.3 350.6 334.6 +5.5% +7.2% 1 LfL: Like-for-Like Hotel revenues increased by +7.2% like-for-like compared to 2023 to reach €335 million, due to: Lease properties: AccorInvest variable leases portfolio (22% of the hotel portfolio): the +31.2% year-on-year increase on a like-for-like basis is due to the very good performance of hotels in Southern Europe. Fixed leases (54% of the hotel portfolio): +4.3% rise in rents on a like-for-like basis, due in particular to rent indexation. Operating properties (24% of the hotel portfolio): mainly located in Germany and in the north of France, these hotels gain +4.9% of EBITDA like-for-like, thanks in particular to good performances at the Berlin and Nice hotels. At current scope, revenues increased by +5.5% year-on-year, impacted by the disposals of 2023 and 2024, while the asset swap with AccorInvest was only finalized at the end of November 2024 and only contributed for the month of December 2024. 9 COVIVIO HOTELS PRESS RELEASE 3. Annualized revenue Breakdown by tenant/operator and by country (based on 2024 revenues) which amount to €369.1 million in Group share. Germany 21% UK 12% Spain 11% France Belgium 35% 8% Others 13% Revenues are split using the following breakdown: fixed (50%), variable (8%) and EBITDA (42%) 4. Indexation Fixed-indexed leases are indexed to benchmark indices (ICC and ILC in France and the consumer price index for foreign assets). 5. Lease expiries: 11.0 years hotels residual lease term By lease % of By lease % of (In € million, Group share) end date total end date total (1st break) 2025 1% 0% 2.5 - 2026 11.3 5% - 0% 2027 4.2 2% - 0% 2028 5.8 3% - 0% 2029 2.6 1% 6.0 3% 2030 2.4 1% 9.1 4% 2031 30.1 14% 19.4 9% 2032 8.3 4% 10.6 5% 2033 10.2 5% 10.9 5% 2034 6.5 3% 10.2 5% Beyond 131.1 61% 148.8 69% Total Hotels in lease 215.0 100% 215.0 100% 10 Attention : This is an excerpt of the original content. To continue reading it, access the original document here .

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