Mandarin Oriental International Limited - Mandarin Oriental Hotel ...

2007 

ANNUAL RESULTS

A MILESTONE YEAR 

� Highest ever financial performance 

� Eight new management contracts 

announced 

� Three new Residences at Mandarin 

Oriental announced 

� Increased global recognition

2007 ANNUAL RESULTS HIGHLIGHTS 

US$m 2007 2006 

Combined Total Revenue 1,008 850 

EBITDA 190 116* 

� Full year contribution from renovated Mandarin Oriental, Hong Kong 

� Increased contributions of growing portfolio 

� Strong market conditions 

* Mandarin Oriental, Hong Kong closed for 9 months in 2006


US$m 2007 2006 

Profit attributable to shareholders 108 80 

Profit attributable to shareholders excl. non-trading items 87 45 

� Group’s Profit attributable to shareholders includes: 

� 2007: US$16m post-tax gain from partial sale of Mandarin Oriental, New York 

� and US$5m uplift from property revaluation in Kuala Lumpur 

� 2006: US$35m post-tax gain from sale of The Mark, New York


US$m 2004 2005 2006 2007 07 vs. 04 

Combined Revenues 667 815 850 1,008 51% 

EBITDA 

99 124 116 190 92% 

Profit attributable to shareholders* 19 41 45 87 358% 

* Excluding non-trading items


* Excluding non-trading items 

** Net asset value per share includes the leasehold properties at valuation 

2007 2006 

Earnings per Share US¢ 11.16 8.28 

Adjusted Earnings per Share* US¢ 8.98 4.66 

Net Asset Value per Share** US$ 2.34 1.78 

� Total dividends for 2007 of US¢6 per share (2006 – US¢3 per share)

KEY STRATEGIC OBJECTIVES 

� Being widely recognised as the world’s best luxury hotel group 

� Strengthening our competitive position 

� Operating at least 10,000 rooms worldwide 

� Achieving a strong financial performance

TO BE WIDELY RECOGNISED AS THE 

WORLD’S BEST LUXURY HOTEL GROUP 

� Increasing recognition for some of the 

world’s most sought after properties 

� 21 st century luxury with oriental charm



Core Brand Attributes: 

� Creative hotel design and 

architecture 

� Holistic spas 

� Innovative dining 

� Guest-oriented technology 

� Legendary service



An award-winning International 

Advertising Campaign 

�17 celebrity “fans” 

� New celebrity fan - Dennis Hopper

CONDÉ NAST TRAVELER US 

GOLD LIST – 2008 

The Oriental, Bangkok 

Mandarin Oriental Dhara Dhevi, Chiang Mai 

Mandarin Oriental, Hong Kong 

The Landmark Mandarin Oriental, Hong Kong 

Mandarin Oriental, Kuala Lumpur 

Mandarin Oriental, Singapore 

Mandarin Oriental, Tokyo 

Mandarin Oriental Hyde Park, London 

Mandarin Oriental, Miami 

Mandarin Oriental, New York 

Mandarin Oriental, San Francisco

TRAVEL & LEISURE 

WORLD’S BEST AWARDS – 2007 


Mandarin Oriental Dhara Dhevi, Chiang Mai 


Mandarin Oriental, Kuala Lumpur 

Mandarin Oriental, Munich 

Mandarin Oriental , Prague 

Mandarin Oriental, Miami 


Mandarin Oriental, San Francisco

INSTITUTIONAL INVESTOR 

THE WORLD’S BEST HOTELS – 2007 



The Landmark Mandarin Oriental, Hong Kong 




Mandarin Oriental, San Francisco 

Mandarin Oriental, Washington DC

STRENGTHEN OUR COMPETITIVE POSITION 

2007 RevPAR Performance* 

RevPAR in (US$) 

US$ 700 

US$ 600 

US$ 500 

US$ 400 

US$ 300 

US$ 200 

US$ 100 

US$ 0 

128 

+12% 

143 

468 

+26% 

591 

316 

361 

187 

Asia Europe The Americas Total 

2006 2007 

+14% 

+15% 

* Includes only hotels that were fully operational in both years 

� Average rate has increased by 16% across the portfolio 

215


ASIA 


(100% ownership) 

� One of the world’s legendary hotels 

� Significant increase in contribution 

post renovation 

� Average rate of US$399 (50% up 

over 2005) 

� Occupancy at 74% (84% in last 

quarter of 2007)


ASIA 

Hong Kong 

� Two complementary luxury 

hotels under operation 

� Achieving some of the highest 

rates and RevPAR in the city 

� Will further benefit from reduction 

in hotel supply

“The revamp of the Mandarin left it looking similar but beautifully 

spruced-up, a huge relief for its regulars.” 

Tatler UK

“No hotel is woven so tightly into the city’s social fabric...” 

Travel & Leisure US

“Avant-garde art decorates the walls of The Landmark Mandarin Oriental - 

Hong Kong’s most glamorous, sophisticated, ultra luxury contemporary hotel.” 

Condé Nast Traveler US, Gold List


ASIA 

The Excelsior, Hong Kong 


� Strong corporate demand 

� Average rate increased to 

US$179 (US$163 in 2006) 

� 8% increase in RevPAR over 

2006


ASIA 

Mandarin Oriental, Macau 


� Maintained competitive position 

despite increased supply


ASIA 

Mandarin Oriental, Tokyo 

(Long-term lease) 

� Positive contribution in second full 

year of operation 

� Occupancy at 77% (66% in 2006) 

� Average rate of US$475 (US$471 in 

2006) 

� RevPAR up by 19% 

� One of the top luxury hotels in the city

“Here’s one that didn’t get lost in translation. The new Mandarin Oriental, 

Tokyo has got it absolutely right.” 

Tatler Travel Guide UK

“A restaurant that receives one or more stars is not only one of the best in its 

country but also one of the best in the world.” 

Michelin Guide Tokyo


ASIA 



� Renamed in September 2007 

� Repositioned as one of the city’s 

leading luxury hotels 

� RevPAR up by 28% 

� Average rate at US$209 

(US$163 in 2006)


ASIA 


(44.9% ownership) 

� Maintained contribution despite 

political uncertainty 

� RevPAR up by 6% over 2006 

� Undisputed market leader


ASIA 

Other Hotels 

� Manila and Kuala Lumpur 

benefited from improved local 

economies 

Mandarin Oriental, Jakarta 

� Closed in December 2007 for a 

US$50 million renovation 

� To be repositioned as one of top 

city hotels 

� Two year renovation will have 

limited impact on Group’s results


EUROPE 



� Strong performance as one of city’s 

most exclusive properties 

� Average rate of US$886 (US$731 

in 2006) 

� RevPAR up by 25% (15% in local 

currency terms) 

� Limited supply in luxury hotel sector

“A prime location and the city’s most innovative hotel spa. Don’t miss the tai 

chi classes in Hyde Park.” 

Travel & Leisure US

“The sleek Michelin-starred Foliage restaurant offers sublime food” 

Sunday Telegraph


EUROPE 

Mandarin Oriental, Munich 


� Room renovation complete 

� Remains market leader 

� Average rate at US$585 

(US$503 in 2006)


EUROPE 

Mandarin Oriental Hotel du Rhône, Geneva 

(92.6% ownership) 

� Strong market conditions 

� RevPAR up by 28% (23% in local 

currency terms) 

� New restaurants, bars and suites to be 

launched mid-year 2008


EUROPE 

Mandarin Oriental, Prague 

(Management only) 

� Average rate of US$434 

(US$422 in 2006) 

� Performed well in first full year of 

opening

“Mandarin Oriental, Prague is a hip, tranquil spot just yards away from the 

cobbled streets that link the Castle and Charles Bridge.” 

Tatler Travel Guide UK

“The city’s splashiest new hotel is Mandarin Oriental, Prague which features 

one of the city’s best day spas.” 

The New York Times


THE AMERICAS 

� Rates strengthened in all 

markets 

� Double digit RevPAR increases 

at each hotel


THE AMERICAS 

Mandarin Oriental, Washington DC 



� One of the city’s best luxury 

hotels 

� Will benefit further as 

surrounding area develops


THE AMERICAS 




� Average rate of US$937 (US$832 in 

2006) 

� Reduced supply in luxury hotel sector 

� Mobil 5 Star and Triple A 5 Diamond 

awards achieved for second year

“You’ll want for nothing at the Mandarin Oriental Spa, and if you do 

you’ll get it instantly.” 

The Times UK

“The Asiat experience is like a treasure hunt of exciting flavors and 

textures. Sommelier Richard Hales has put together an incredible wine 

list of treasures too.” 

Wine Expert US


THE AMERICAS 

Other Hotels 

Miami, San Francisco and Bermuda all 

capitalised on the strong demand for 

luxury travel

TOWARDS 10,000 ROOMS IN OPERATION 

� 10,000 rooms in operation or 

under development 

� Record number of new hotels 

announced in 2007: 

� Beijing 

� Guangzhou 

� Taipei 

� Marbella 

� Milan 

� Paris 

� Costa Rica 

� St. Kitts


� 21 hotels in operation 

� 18 hotels under development 

� All are management contracts 

except Paris (a long-term lease) 

� Portfolio to double in next few years 

� Increased geographic spread with 

more than half outside Asia: 

� 16 in Asia 

� 14 in The Americas 

� 9 in Europe and North Africa


New Hotels Under Development 

2008 Rivera Maya, Mexico (Feb) 

Boston 

Beijing 

Sanya, Hainan Island


New Hotels Under Development 

2008 Riviera Maya, Mexico (Feb) 

Boston 

2009 Las Vegas 

Macau 

2010 and beyond Chicago 

Costa Rica 

Dallas 

Grand Cayman 

St. Kitts 

Turks & Caicos 

Beijing 

Sanya, Hainan Island 

Barcelona 

Marrakech 

Guangzhou 

Taipei 

Marbella 

Milan 

Paris 

� Opening dates are subject to change as determined by each project’s 

owner/developer

THE RESIDENCES AT MANDARIN ORIENTAL 

� 12 residences projects integrated into 

our hotels 

� One-off branding fees 

� Ongoing revenues for hotel services

THE RESIDENCES AT MANDARIN ORIENTAL 

Las Vegas 

Chicago 

Grand Cayman 

Costa Rica 

Dallas 

Boston 

New York (2003) 

Turks & Caicos 

St. Kitts 

London 

Marbella 

Marrakech

FUTURE DEVELOPMENTS 

� Future growth underpinned by brand strength 

� Selective projects consistent with brand attributes

FUTURE DEVELOPMENTS 

� Most future projects to be management only: 

� Limited capital investment 

� Generate branding and management fees 

� Mid-term goal is 30% of total profit from fees 

� Ownership of hotel assets to continue: 

� Ensures control of brand 

� Increased credibility with third party owners and developers 

� Unique investments with potential for long-term capital appreciation

MANDARIN ORIENTAL HOTEL GROUP 

FINANCIAL REVIEW

FINANCIAL REVIEW 

Summary Cash Flow Statement 

US$m 2007 2006 

Operating Activities 

EBITDA from subsidiaries* 146 74 

Dividends and interest from associates 12 12 

Net financing charges paid (16) (16) 

Tax paid (14) (8) 

Other 2 – 

Total 130 62 

* The two 100% owned Hong Kong hotels make up 50% 

� Weighted average interest rate at 5.2% on Group borrowings 

� Approximately 50% of Group’s gross debt hedged



US$m 2007 2006 

Investing Activities 

Capital expenditure on existing properties (i) (29) (14) 

Renovation capex for Hong Kong hotel (21) (112) 

Investment in Mandarin Oriental, Tokyo – (10) 

Proceeds on disposals (ii) 71 98 

Capital distribution from New York 13 – 

Hotel mezzanine funding (net) 9 – 

Other (4) – 

Total 39 (38) 

(i) 2007 includes US$10 million room renovation programme for Munich property 

(ii) Principally the sale of 25% of Mandarin Oriental, New York (2007) and The Mark (2006)



US$m 2007 2006 

Operating Activities 130 62 

Investing Activities 

Financing Activities 

39 (38) 

Dividends paid (39) (14) 

Drawdown of borrowings 536 114 

Repayment of borrowings (464) (9) 

Other 3 3 

Net increase in cash 

Opening cash balance 1 st Jan 

Closing cash balance 31 st Dec 

� Year end dividend of US¢5 per share proposed for 2007 (annual dividend of US¢6) 

� US$492m of cash resources 

205 

287 

492 

118 

169 

287


� Adjusted NAV per share US$2.34 (US$1.78 in 2006) after full 

independent valuation 

� US$5m writeback in respect of Kuala Lumpur 

� US$650m of debt successfully refinanced 

� Average tenor of Group’s borrowings is approximately 6 years 

� US$171m of committed, unused facilities 

� Gearing (net debt over adjusted shareholders’ funds) at 8% (18% in 

2006) 

� EBITDA (including associates) net interest cover was 7.7 versus 4.5 in 

2006


� The Group is in a strong financial position

CONCLUSION 

� Another milestone year: 

� Highest ever financial performance 

� More projects announced than ever before 

� Long-term trends remain encouraging due to: 

� demographics 

� emerging new markets (China, India, Russia) 

� limited new supply of luxury hotels

CONCLUSION 

� Possible softening of demand later in year in corporate sector 

� Increasing global brand recognition as Group doubles in size 

� Positioned to become the best luxury hotel group

Mandarin Oriental International Limited - Mandarin Oriental Hotel ...

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