Mandarin Oriental International Limited - Mandarin Oriental Hotel ...

mandarinoriental

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


2007 ANNUAL RESULTS HIGHLIGHTS

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


2007 ANNUAL RESULTS HIGHLIGHTS

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


2007 ANNUAL RESULTS HIGHLIGHTS

* 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


TO BE WIDELY RECOGNISED AS THE

WORLD’S BEST LUXURY HOTEL GROUP

Core Brand Attributes:

� Creative hotel design and

architecture

� Holistic spas

� Innovative dining

� Guest-oriented technology

� Legendary service


TO BE WIDELY RECOGNISED AS THE

WORLD’S BEST LUXURY HOTEL GROUP

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

The Oriental, Bangkok

Mandarin Oriental Dhara Dhevi, Chiang Mai

Mandarin Oriental, Hong Kong

Mandarin Oriental, Kuala Lumpur

Mandarin Oriental, Munich

Mandarin Oriental , Prague

Mandarin Oriental, Miami

Mandarin Oriental, New York

Mandarin Oriental, San Francisco


INSTITUTIONAL INVESTOR

THE WORLD’S BEST HOTELS – 2007

The Oriental, Bangkok

Mandarin Oriental, Hong Kong

The Landmark Mandarin Oriental, Hong Kong

Mandarin Oriental, Singapore

Mandarin Oriental Hyde Park, London

Mandarin Oriental, New York

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


STRENGTHEN OUR COMPETITIVE POSITION

ASIA

Mandarin Oriental, Hong Kong

(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)


STRENGTHEN OUR COMPETITIVE POSITION

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


STRENGTHEN OUR COMPETITIVE POSITION

ASIA

The Excelsior, Hong Kong

(100% ownership)

� Strong corporate demand

� Average rate increased to

US$179 (US$163 in 2006)

� 8% increase in RevPAR over

2006


STRENGTHEN OUR COMPETITIVE POSITION

ASIA

Mandarin Oriental, Macau

(50% ownership)

� Maintained competitive position

despite increased supply


STRENGTHEN OUR COMPETITIVE POSITION

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


STRENGTHEN OUR COMPETITIVE POSITION

ASIA

Mandarin Oriental, Singapore

(50% ownership)

� 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)


STRENGTHEN OUR COMPETITIVE POSITION

ASIA

The Oriental, Bangkok

(44.9% ownership)

� Maintained contribution despite

political uncertainty

� RevPAR up by 6% over 2006

� Undisputed market leader


STRENGTHEN OUR COMPETITIVE POSITION

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


STRENGTHEN OUR COMPETITIVE POSITION

EUROPE

Mandarin Oriental Hyde Park, London

(100% ownership)

� 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


STRENGTHEN OUR COMPETITIVE POSITION

EUROPE

Mandarin Oriental, Munich

(100% ownership)

� Room renovation complete

� Remains market leader

� Average rate at US$585

(US$503 in 2006)


STRENGTHEN OUR COMPETITIVE POSITION

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


STRENGTHEN OUR COMPETITIVE POSITION

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


STRENGTHEN OUR COMPETITIVE POSITION

THE AMERICAS

� Rates strengthened in all

markets

� Double digit RevPAR increases

at each hotel


STRENGTHEN OUR COMPETITIVE POSITION

THE AMERICAS

Mandarin Oriental, Washington DC

(80% ownership)

� RevPAR up by 14% over 2006

� One of the city’s best luxury

hotels

� Will benefit further as

surrounding area develops


STRENGTHEN OUR COMPETITIVE POSITION

THE AMERICAS

Mandarin Oriental, New York

(25% ownership)

� RevPAR up by 15% over 2006

� 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


STRENGTHEN OUR COMPETITIVE POSITION

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


TOWARDS 10,000 ROOMS IN OPERATION

� 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


TOWARDS 10,000 ROOMS IN OPERATION

New Hotels Under Development

2008 Rivera Maya, Mexico (Feb)

Boston

Beijing

Sanya, Hainan Island


TOWARDS 10,000 ROOMS IN OPERATION

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


FINANCIAL REVIEW

Summary Cash Flow Statement

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)


FINANCIAL REVIEW

Summary Cash Flow Statement

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


FINANCIAL REVIEW

� 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


FINANCIAL REVIEW

� 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

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