CORPORATE PRESENTATION April 2011 - Carlson

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CORPORATE PRESENTATION April 2011 - Carlson

CORPORATE

PRESENTATION

April 2011


About Us

One of the

fastest

growing hotel

companies in

the world

2 / Corporate Presentation / April 2011

A portfolio of more than 400 Hotels &

almost 90,000 Rooms

64 countries across Europe, Middle East & Africa

A portfolio of great hotel brands:

Radisson Blu, Park Inn by Radisson, Regent,

Country Inn and Hotel Missoni

Hotel Missoni: Worldwide License Agreement with

Italian fashion house Missoni

Publicly Listed on Stockholm Stock Exchange since

2006


Our Story

450

400

350

300

250

200

150

100

50

0

1994

1995

3 / Corporate Presentation / April 2011

Managed Leased Franchised Owned

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

IPO

2007

2008

Sale of Regent

CAGR / Compound Annual Growth Rate

Dated / 31 March 2011

2009

2010

419 hotels

89,400 rooms

Q1-2011


Our Presence

• Rezidor in EMEA

• 60+ countries

• 317 hotels in operation

• 102 under development

• Rezidor+Carlson worldwide

• 90+ countries

• 1,070 hotels in operation

• 240 under development

• Global brand alignment benefits

4 / Corporate Presentation / April 2011

▌Number of hotels in operation & under development


Our Portfolio

29%

1%

70%

Radisson Blu Park Inn Others

33%

Brands Regions

6%

61%

Radisson Blu Park Inn Others

5 / Corporate Presentation / April 2011

In Operation: 300+ Hotels, 66,000 Rooms

43%

20%

23%

14%

EE MEAO NORD ROWE

In Pipeline: 100 Hotels, 21,000+ Rooms

7%

19%

38%

36%

EE MEAO NORD ROWE

53%

Contracts

Contracts

21%

26%

Franchised Leased Managed

89%

11% 0%

Franchised Leased Managed


Our Brandscape

Core Competence

Brand

Management

Culture

of Service

6 / Corporate Presentation / April 2011

Luxury

First class

Mid-market

Economy

Budget

Holiday Inn

Novotel

Scandic

Morgan

W

Increased level of service

Currently on-hold

Four Seasons

Ritz Carlton

Bvlgari

InterContinental

Hilton

Marriott

Sheraton

Sofitel

The luxury brand

owned by Formosa

Our lifestyle brand

Our up-market

core brand

Our mid-market

growth brand

Source: HVS


Our Hotel Brands

• Largest upscale brand in

Europe

• “New Breed” properties

• Moving South & East into

new markets

7 / Corporate Presentation / April 2011

• 2 nd largest mid-scale

pipeline in Europe

• Strong franchising platform

• Clustered growth; UK,

Germany & Russia

• Our lifestyle brand

• Pursue opportunities

worldwide

• Target fashionable cities

and resort areas


Largest Upscale Hotel Brand in Europe

Number of Hotels Number of Rooms

180

160

140

120

100

80

60

40

20

0

169 168

Ramada

145

87

79

8 / Corporate Presentation / April 2011

Hilton

Marriott

Melia

Barcelo

74

Crowne Plaza

68 68

Thon

Sheraton

55

Maritim

41

45,000

40,000

35,000

30,000

25,000

20,000

15,000

10,000

5,000

0

38,900 37,000

Hilton

21,500 21,100 19,800

17,300 15,400

15,200

11,800

9,700

Ramada

Marriott

Melia

Source / MKG Hospitality Database - December 2010 (In Operation)

Barcelo

Crowne Plaza

Sheraton

Maritim

Thon


Our Restaurants & Bars

• The benefits

• Standardisation

• Economies of scale

• Purchasing power

9 / Corporate Presentation / April 2011

100+ outlets


Our Vision

10 / Corporate Presentation / April 2011


Our Purpose

We provide business and leisure

guests with a choice of relevant and

excellent hospitality products and

services that offer good value, while

assuring a competitive return to

owners and shareholders, and

inspiration to employees.

11 / Corporate Presentation / April 2011


Our Values

• Trust: To earn trust, then show it; honesty, integrity and loyalty, we promise – we

deliver

• Openness: Be frank and transparent, accessible, flexible, prepared to listen and to

consider all options

• Empowerment: Enable and equip employees to make the decisions that matter

• Respect: Respecting individuals, community and the environment we live and operate

in

• Nurturing: We engage individuals and are determined to develop and grow talent

from within

• Fighting Spirit: Always entrepreneurial, always opportunity driven, always hungry for

more. Decisive!

• Z-factor: Daring to be different, in a fun & rewarding way

12 / Corporate Presentation / April 2011


Innovative Hospitality: The Z-factor!

• 1 st to go asset light

• 1 st to focus on managing other peoples’

brands

• 1 st to successfully co-brand

• 1 st to offer Free Internet

• 1 st to have an award winning marketing

partnership with Nespresso

• 1st to offer 100% Guest Satisfaction

Guarantee

• 1 st to establish ambitious Responsible

Business programme

13 / Corporate Presentation / April 2011


WHY REZIDOR?


We Promise, We Deliver

15 / Corporate Presentation / April 2011

CUSTOMERS

EMPLOYEES

INVESTOR

COMMUNITY

HOTELS

SHARE

HOLDERS

HOTEL

OWNERS

MEDIA

PARTNERS


Why Owners choose Rezidor?

• Two well-known, core brands

• Strong existing portfolio

• Reputation for innovation

• Continuity in leadership

• Perceived as owner-friendly

• Local expertise in key emerging markets

• 70% of 2010 openings from multi-unit owners

16 / Corporate Presentation / April 2011

Norwegian hotel group, Linstow

Owners of former Reval hotels


Why Investors choose Rezidor?

• Ranked Number 2 on HVS Corporate Governance Ranking for European listed

companies

• World’s Most Ethical Companies (by Ethisphere) for two years in a row

• Solid company with strong growth prospects

• Industry leading pipeline of upscale and mid-market segment

• A strong portfolio of hotel brands

• Global alignment synergies with Carlson

• Emerging market exposure – early mover advantage

• Competent management team

17 / Corporate Presentation / April 2011


Why Guests choose Rezidor?

• A culture of innovative hospitality and pioneering initiatives

• Individuality … no cookie cutter

• Local adaptation of international brands

• Strategic design and service concepts

• Priced to sell, not to discount

• Sell them what they want to buy

18 / Corporate Presentation / April 2011


Why Media choose Rezidor?

Helping build a positive image of the company and its brands

Fostering a transparent dialogue

Ranked at Top 2 position for Best Corporate Website in Europe on Hallvarsson &

Halvarsson Ranking 2009

Industry-leading group-wide magazine called, Hotline, with a readership of

20,000 in 75 countries

Award-winning group website with a dedicated Financial Centre and Media

Room

Live webcasts of Annual Capital Market Days

Live webcasts of Quarterly Financial Results

Annual Business Conference for General Managers and Hotel Owners to

address top issues and long-term strategies

Strong internal communication to involve, inform and engage employees across

60+ countries

19 / Corporate Presentation / April 2011


Why communities choose Rezidor?

Environmental programme in place since mid 1990s. Comprehensive

Responsible Business programme launched in 2001

Winner of the Worldwide Hospitality Award 2004 by MKG for Best Initiative in

Sustainable Development

Taking responsibility for well-being of employees and guests

Respecting the social and ethical issues in the company, as well as in the

community

Reducing the company’s negative impact on the environment

World Childhood Foundation as global charity organisation

Ranked World’s Most Ethical Hotel Company in 2010 and 2011 by Ethisphere

Institute, US

20 / Corporate Presentation / April 2011


Why Employees choose Rezidor?

A team of 35,000+

140 nationalities

Hire attitude and train for skills

Promote from within : 95% of our General Managers are “home grown”

Highest Employee Satisfaction score in 2009 (85.8%) and 2010 (86.7%)

Training & Development

– Rezidor Business School

– Mentor Mentee Programme

– Centres of Excellence

– Management Development Programme

– Rezidor Learning Network

21 / Corporate Presentation / April 2011


HOTEL INDUSTRY

UPDATE


Continued Recovery

• Steady global recovery across almost all markets

• Macroeconomic uncertainties remain

• Social and political unrest in the Middle East and Northern Africa

• Industry pipeline back to growth

• Hotel transactions expected to increase

23 / Corporate Presentation / April 2011


Absolute RevPAR still at a low level

€80

€70

€60

€50

€40

€30

€20

€10

€0

24 / Corporate Presentation / April 2011

Occ ADR Europe €

Jan-01

Apr-01

Jul-01

Oct-01

Jan-02

Apr-02

Jul-02

Oct-02

Jan-03

Apr-03

Jul-03

Oct-03

Jan-04

Apr-04

Jul-04

Oct-04

Jan-05

Apr-05

Jul-05

Oct-05

Jan-06

Apr-06

Jul-06

Oct-06

Jan-07

Apr-07

Jul-07

Oct-07

Jan-08

Apr-08

Jul-08

Oct-08

Jan-09

Apr-09

Jul-09

Oct-09

Jan-10

Apr-10

Jul-10

Oct-10

Jan-11

30

20

10

0

-10

-20

-30

Source: STR GLOBALRolling-12 RevPAR and Occ, ADR % change


GROUP

PERFORMANCE


Latest Company Highlights

• 2010 - another record year of rooms openings

• Strategic moves:

• Sale of Regent

• Reval portfolio

• Park Inn by Radisson

• Launch of Club Carlson SM

• New Park Inn UK marketing campaign & expanded

sales force

• World’s Most Ethical Hotel Company award

(Ethisphere)

• Highest Employee Satisfaction score in history

• 2 nd amongst European hotel companies in Corporate

Governance (HVS)

26 / Corporate Presentation / April 2011


L/L RevPAR growth 6.5% - excluding North Africa & Bahrain 9.5%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

27 / Corporate Presentation / April 2011


A continued strong recovery in our key markets

• Strong growth in all Nordic countries, supported

by Easter timing

• Continued solid development in Rest of Western

Europe, particularly Germany

• Occupancy driven growth in Eastern Europe,

rates yet to rebound

• Significant impact of political unrest in MEAO

28 / Corporate Presentation / April 2011

ROWE

L/LRevPAR: 8.6%

Occupancy: 3.6%

AHR: 4.8%

NO

L/L RevPAR: 10.0%

Occupancy: 7.9%

AHR: 1.9%

EE

L/L RevPAR: 11.5%

Occupancy: 11.7%

AHR: 0.4%

MEAO

L/L RevPAR: -6.1%

Occupancy: -7.5%

AHR: 1.6%


Significant revenue impact from new leases & FX

29 / Corporate Presentation / April 2011

Revenue

% CHANGE in MEUR VAR vs LY

REVENUE Q1 2010 166 -

L/L GROWTH 8 5%

OUT (REGENT) -3 -2%

NEW OPENINGS 14 8%

FX IMPACT 8 5%

REPORTED Q1 2011 193 16%


Q1 always the weakest quarter

06 07 08 09 10 11 06 07 08 09 10 06 07 08 09 10 06 07 08 09 10

= Easter quarter

30 / Corporate Presentation / April 2011


Strong EBITDA conversion supported by fixed rents in ROWE

IN MEUR Q1-2011 Q1-2010 Change %

Revenue 193 166 16%

Expenses 140 121 16%

EBITDAR 53 45 18%

% EBITDAR Margin 27% 27% 0pp

Rental expenses 62 57 9%

EBITDA -9 -12 n/m

% EBITDA Margin -4% -7% 3pp

EBIT -17 -19 n/m

% EBIT Margin -9% -12% 3pp

Tax -1 3 n/m

Net results -17 -18 n/m

31 / Corporate Presentation / April 2011

• Operational costs increased in

line with revenue

• Higher rental costs due to new

leases

• Tax rate negatively impacted

by higher taxable profits in

some countries and a one-off

tax expense related to prior

years


Strong L/L Conversion

Q1 2011 vs Q1 2010

32 / Corporate Presentation / April 2011

DEVIATION vs

Q1 2010

(MEUR)

REPORTED

CONVERSION

)

L/L

CONVERSION

(excl. FX, new units & Regent)

Revenue 27.0 - -

EBITDAR 7.6 28% 28%

EBITDA 3.0 11% 41%

EBIT 2.5 9% 40%

Note: L/L conversion would have been higher by ca 25% but for the one-off impacting central cost by

ca MEUR 2


Positive impact of market upturn on leased business

• Strong RevPAR growth in Nordics & ROWE

• Stronger revenue growth in Nordics supported by new openings

• Increase in absolute EBITDA

• Improved EBITDA margin in ROWE, benefiting from fixed rent structure

33 / Corporate Presentation / April 2011


Fee based asset-light growth

• Result of shift in business model: stronger fee income particularly in Emerging

Markets

• Increase across all regions

• Increase in MEAO fee income despite political unrest

• Decrease in shortfall payments

34 / Corporate Presentation / April 2011


Q1 cash flow reflects normal seasonal pattern

• Strong improvement in cash flow from operations

• Drop in working capital due to higher-than-normal accruals at end of last year

• Higher levels of investments compared to last year – as planned

• MEUR 9 in cash and MEUR 92 in unused overdrafts/credit lines

35 / Corporate Presentation / April 2011


2011 CAPEX

• Increase planned in 2011

• Renovations and refurbishments of several landmark properties:

• Radisson Blu Scandinavia Oslo

• Radisson Blu Royal Viking, Stockholm

• Radisson Blu Royal Brussels

• Radisson Blu Amsterdam

• Aim to increase market penetration and maintain Radisson Blu as a premier

brand

IN MEUR 2010 2009 2008 2007 2006

CAPEX -24 -23 -35 -46 -33

Leased hotel revenue 683 592 691 693 631

Maintenance CAPEX as a % of leased revenue 2.6% 3.9% 4.3% 4.8% 5.2%

36 / Corporate Presentation / April 2011


BUSINESS

DEVELOPMENT


Our Growth Strategy

• Asset-light growth – managed & franchised contracts

• More profitable, lower risk level, no investments

• Expand our presence in Russia/CIS & Africa

• High GDP growth, imbalance of supply and

demand

• Maintain our leading position in the Nordics

• Strong brand awareness, RevPAR premium

• Focus on our core brands

• Radisson Blu and Park Inn by Radisson

38 / Corporate Presentation / April 2011

23%

13%

IN OPERATION

20%

44%

IN PIPELINE

7%

NO

ROWE

EE

MEAO

38%

20% NO

35%

ROWE

EE

MEAO


2010 Hotel Openings

• 32 hotels / 7,200 rooms

• 80% of rooms fee-based (managed & franchised)

• 22 hotels with multi-unit owners

• 10 new-build Park Inn flagships

• Key Locations: Oslo, Moscow, Milan, Frankfurt…

Park Inn Frankfurt Airport Radisson Blu Milan

39 / Corporate Presentation / April 2011

Park Inn Oslo Airport

Radisson Royal Hotel, Moscow


Continued Growth throughout the downturn

Rooms Opened

8,000

6,000

4,000

2,000

0

5,700

40 / Corporate Presentation / April 2011

3,900

5,000

6,500

Credit Crunch Financial Crisis

7,100

2005 2006 2007 2008 2009 2010

7,200

20,000+ rooms


2010 Hotel Signings

• 40 hotels / 8,100 rooms

• 100% of rooms fee-based (managed & franchised)

• 17 conversions with 3,700 rooms

• 16 hotels in Mega or Primary markets

• 10 destination resorts

• Key Locations: Cannes, Istanbul Asia, St Petersburg, Dubai Downtown

Radisson Blu Resort, Kruger Park Radisson Blu Cannes

41 / Corporate Presentation / April 2011

Hotel Missoni Antalya


2011 A Strong Start

• Openings: 6 hotels / 1,400 rooms

• 2 leased hotels opened, no leased

hotels remaining in pipeline

• Key Locations: Stockholm, Brussels,

Kuwait City, Cannes

42 / Corporate Presentation / April 2011

• Signings: 11 hotels / 2,200 rooms

• 100% fee-based

• 50%:50% Radisson Blu/Park Inn

• Key Locations: Istanbul, London

(Wembley), Sochi, Accra, Gothenburg

Hotel Missoni Kuwait Radisson Blu Stockholm Radisson Blu Accra Radisson Blu Gothenburg


One of the Strongest Pipelines in the Industry

• Steady at 100+ hotels, 20,000+ rooms

• One of the strongest in the industry

• 32% of rooms in operation

• Currently no leases in the pipeline

• Run-rate margin impact of 2-2.5% on EBITDA

43 / Corporate Presentation / April 2011

27%

20%

IN OPERATION

10%

90%

53%

IN PIPELINE

Managed

Franchised

Leased

Managed

Franchised


European Pipeline

Largest in Upscale 2 nd Largest in Mid-Scale

44 / Corporate Presentation / April 2011

7,275

4,789

3,724

2,102

1,767

921

828

5,409

5,217

4,854

2,351

1,861

1,629

929

Source:: STR Global Comprehensive Pipeline Outlook (Europe) January 2011


Russia, CIS & The Baltics

45 / Corporate Presentation / April 2011

Source:: Company Websites


Largest Pipeline in Sub-Saharan Africa

46 / Corporate Presentation / April 2011

Source:: W Hospitality Group March 2011


Highest growth in Europe

RANK GROUP ROOMS JAN. 2011 ROOMS JAN. 2010 GROWTH

1 Accor 247,000 242,000 1.8%

2 Best Western 89,000 87,000 2.4%

3 Intercontinental Hotel Group 85,000 85,000 0.2%

4 Groupe du Louvre 67,000 72,000 -6.8%

5 NH Hoteles 51,000 51,000 1.2%

6 Rezidor/Carlson 49,000 44,000 10.7%

7 Sol Melia 45,000 46,000 -3.1%

9 TUI 42,000 40,000 4.3%

10 Hilton International 41,000 40,000 3.8%

47 / Corporate Presentation / April 2011

Source: MKG Hospitality Database - March 2011 (In Operation)


FOCUS

&

OUTLOOK 2011


2011 Trends and Outlook

• Continued steady recovery in almost all markets

• Supply growth in Europe at all time low

• Macroeconomic and political uncertainty in some countries remain

• More demanding comparison base

• Absolute RevPAR is still low – room for further growth

49 / Corporate Presentation / April 2011


Focus Areas 2011

• Profitable asset-light growth

• Core brands

• Top-line growth and quality enhancement

• Profitability in Rest of Western Europe

• Cost containment and cash improvement

• Accelerated CAPEX plan

50 / Corporate Presentation / April 2011


OUR NEWEST

FLAGSHIPS


52 / Hotel Missoni Kuwait / 169 Rooms


53 / Hotel Missoni Edinburgh / 136 Rooms


54 / Radisson Blu Waterfront Hotel, Stockholm / 414 Rooms


55 / Radisson Royal Hotel, Moscow / 544 Rooms


56 / Radisson Sonya Hotel, St. Petersburg / 173 Rooms


57 / Radisson Blu 1835 Hotel & Thalasso, Cannes / 134 Rooms


58 / Radisson Blu Majestic Resort Terme di Venezia, Galzignano / 97 Rooms


59 / Radisson Blu Resort, Split / 246 Rooms


60 / Radisson Blu Hotel & Conference Centre, Salzburg / 257 Rooms


61 / Radisson Blu Gautrain Hotel, Sandton Johannesburg / 216 Rooms


62 / Park Inn Brussels Midi / 142 Rooms


63 / Park Inn Malmö / 231 Rooms


64 / Park Inn Stuttgart / 181 Rooms


65 / Park Inn Frankfurt Airport / 209 Rooms


66 / Park Oslo Airport / 300 Rooms


67 / Park Inn Sandton, Johannesburg/ 273 Rooms


COMING SOON


Coming Soon

Radisson Blu Hotels & Resorts Country

Radisson Blu Dubai Downtown United Arab Emirates

Radisson Blu Anchorage Hotel, Lagos V.I. Nigeria

Radisson Blu Belorusskaya Hotel, Moscow Russia

Radisson Blu Hotel, Cape Town Blaauwberg South Africa

Radisson Blu Hotel, Lusaka Zambia

Radisson Blu Hotel, Maputo Mozambique

Radisson Blu Medea Hotel, Batumi Georgia

Radisson Blu Hotel, Addis Ababa Ethiopia

Radisson Blu Hotel, East Midlands Airport United Kingdom

Radisson Blu Hotel, Istanbul Asia Turkey

Radisson Blu Residence, Gran Canaria Spain

Radisson Blu Resort & Spa, Portimao Portugal

Radisson Blu Resort, Bukovel Ukraine

Radisson Blu Mammy Yoko Hotel, Freetown Sierra Leone

69 / Corporate Presentation April 2011


Coming Soon

Park Inn by Radisson Country

Park Inn by Radisson Astrakhan Russia

Park Inn by Radisson Luxembourg City Luxembourg

Park Inn by Radisson Abeokuta Nigeria

Park Inn by Radisson Canterbury United Kingdom

Park Inn by Radisson Leuven Belgium

Park Inn by Radisson Tete Mozambique

Park Inn by Radisson Cape Town Foreshore South Africa

Park Inn by Radisson Bur Dubai United Arab Emirates

Park Inn London Wembley United Kingdom

Hotel Missoni Country

Hotel Missoni Jebel Sifah Oman

Hotel Missoni, Ilha de Cajaiba Brazil

Hotel Missoni Antalya Turkey

Hotel Missoni Jebel Sifah Oman

70 / Corporate Presentation April 2011

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