Hotels and Services: Growth Drivers Driving sustainable, profitable ...

More documents

Recommendations

Info

2 ■ €7,622m: up 7.9% Revenue for the year was up €558 million over the €7,064 million reported in 2004. +4.7% +4.5% -2.5% +1.2% ■ €1,986m: up 8.8% EBITDAR rose by €161 million for the year, from €1,825 million in 2004. Of that increase, €115 million was generated by business growth. Ebitdar margin amounted to 26.1%, compared to 25.8% in 2004. Like-for-like, the increase was 0.4 points. ■ €603m: up 17.6% Operating profit before tax and nonrecurring items was up €90 million over the €513 million reported in 2004. The increase reflected the gradual improvement in margins and the efficient management of fixed asset holding costs (rental expense, depreciation, amortization and provision expense, and financial expense), which represented 18.2% of revenue, compared with 18.6% in 2004. 2005 ANNUAL RESULTS Accor's results showed sharp improvement in 2005, thanks to a more favorable hotel cycle and sharp growth in the services business. The balance sheet was also considerably strengthened. Like-for-like Expansion Disposals Currency impact +7.9% Total (reported) Breakdown of 2005 revenue growth LETTER TO SHAREHOLDERS - APRIL 2006 ■ €333m: up 42.9% Net profit, Group share increased by a sharp €100 million to €333 million, from €233 million in 2004. Earnings per share rose to €1.55 from €1.17 in 2004, based on the weighted average 214,782,601 shares outstanding in 2005. ■ €935m: up 9.6% Funds from operations increased by €82 million over the €853 million reported in 2004. ■ €449m: up 43% Expenditure for renovation and maintenance of assets increased by €135 million for the year, in line with Group strategy, and represented 5.9% of revenue, versus 4.4% in 2004. ■ €479m: up 28.8% Excluding €308 million for the acquisition of a stake in Club Méditerranée, development expenditure rose by €107 million over the €372 million reported in 2004. ■ 32% versus 71% The net debt-to-equity ratio improved significantly, as equity rose by €822 million, while net debt declined to an all-time low of €1,420 million, from €2,244 million in 2004. ■ 10.7% versus 10.0% Return on capital employed improved in both the Hotels and Services businesses. €2.40 €2.18 €1.15: up 9.5% €1.36 €1.17 €1.55 2001 2002 2003 2004 2005 IFRS IFRS Earnings per share ■ €236m: up 28.3% Based on ROCE after tax of 8.6%, a weighted average cost of capital of 6.5% (versus 6.4% in 2004) and capital employed of €11.3 billion (€10.9 billion in 2004), EVA ® (Economic value added) [(ROCE after tax – weighted average cost of capital) x capital employed] totaled €236 million, a 28.3% increase over 2004. The dividend to be submitted for approval to the Annual Shareholders' Meeting on May 10* compares to an ordinary dividend of €1.05 and an exceptional dividend of €0.25 paid for 2004. It corresponds to a payout of 74% of earnings per share for the year. *The Annual Shareholders’ Meeting is webcasted live and recorded for later viewing at www.accor.com. Holders of registered shares and members of the Accor Shareholders Club who have so requested received the notice of meeting in April. It is also sent on request (see contact information on page 1).
HOTELS Revitalizing the brands will make it possible to capture the full value of the leadership levers Accor derives from its size, positioning and image. ■ In terms of operations, more powerful brands will more effectively drive revenue growth. ■ Strong brands will enable the Group to attract the best talent and enhance its human capital, while accelerating expansion. ■ Lastly, in terms of asset management, more powerful brands will heighten Accor's profile, thereby supporting its strategy of partnering with leading real estate companies around the world. Accor needs to redefine the identity of its brands and above all promote them to enhance their visibility. It also needs to improve its knowledge of customers to more effectively satisfy their needs. STRATEGY: FIRST OUTLINES Accor is solidly anchored in two global core businesses: Hotels and Services. ■ MAKING THE BRANDS EVEN MORE ATTRACTIVE Asset management lever Deepen partnerships with leading real estate companies Operational levers Operational management ● Purchasing ● IT systems ● Sales and Marketing ● Communication ● Human Resources LEVERAGE OUR POWERFUL BRANDS AND COMPETITIVELY DIFFERENTIATED, INNOVATIVE PRODUCTS TO CAPITALIZE ON OUR “LEADERSHIP DRIVERS” Development lever Speed growth through owned properties, management and franchise contracts OUR AMBITION: CUSTOMER-FOCUSED BRANDS Strategic marketing and innovation A structured, global Strategic Marketing Department will help Accor meet these goals, while promoting the creation of innovative products that have always set the Group apart from the competition. Accor created Novotel, Ibis, Formule 1 and Etap Hotel and must continue to proactively respond to emerging trends in lodging concepts and product developments. Beginning this summer, these repositioned brands will be more widely publicized across Europe, thanks to a targeted advertising campaign. Webbased marketing initiatives will be stepped up and the accorhotels.com portal and individual brand websites must become industry benchmarks. Lastly, loyalty programs will be revitalized to take into account the different needs of customers, especially during the week and on weekends. ■ Differentiating and promoting the hotel brands Upper upscale 192 hotels 41,000 rooms 52 countries Ambition: create a more consistent network, present in leading cities and resorts on all continents. Upscale and midscale 398 hotels 69,000 rooms 56 countries Ambition: consolidate the brand's global presence in major national and international cities and resorts, and renew the focus on innovation. 738 hotels 87,000 rooms 49 countries Ambition: become the benchmark in non-standardized hotels, with the goal of developing large franchise networks in the upscale segment with Grand Mercure and the midscale segment with Mercure. Economy 720 hotels 79,000 rooms 36 countries Ambition: become the world leader in its segment by positioning the brand as the right product for deployment on all continents, especially in emerging markets for regional customers, with its standardized rooms and theme restaurants. 344 hotels 38,000 rooms United States Ambition: grow the brand from a regional to a national chain, primarily through franchising and capitalizing on a renovated room that delivers near-midscale comfort at economy rates. Budget 905 hotels 94,000 rooms United States and Canada Ambition: maintain its leadership positioning as the budget hotel network offering "the best price of any national chain". 331 hotels 377 hotels 27,000 rooms 29,000 rooms 11 countries 12 countries Ambition: clarify the use of these brands and remain the global leader in budget hotels. LETTER TO SHAREHOLDERS - APRIL 2006 3
Page 1: April 2006 2005 Annual Results page
Page 5 and 6: ■ NEW RESOURCES: FOR WHAT KIND OF
Page 7 and 8: Service providers 1million affiliat

Hotels and Services: Growth Drivers Driving sustainable, profitable ...

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?