Accor: High Growth Potential Combined Ordinary and Extraordinary ...

accor

Accor: High Growth Potential Combined Ordinary and Extraordinary ...

Accor: High Growth Potential

Combined Ordinary and Extraordinary

Shareholders’ Meeting

of May 14, 2007


Activities of the Board of Directors

and its Committees


Composition of the Board

17 members, including 9 independent directors

Separate Chairman and Chief Executive Officer

Strong international presence (5 non-French

directors)

8 meetings in 2006, 6 meetings since the

beginning of 2007 – usually between 2 and 3 hours

Attendance rate close to 80%


Main Issues Discussed

Approval of the interim and annual financial statements and the

annual budget

Strategic review of the Group’s business portfolio

(the subject of a full-day meeting in July 2006)

Validation of the legal and financial terms of transactions

carried out as part of the refocusing strategy (disposal of stakes in

Carlson Wagonlit Travel and Club Méditerranée, of the Compass

shares, of Go Voyages and, most recently, Red Roof Inn)


Main Issues Discussed

Objectives of the asset-right strategy (sale and managementback

of US Sofitel properties; sale and variable-leaseback, with

no guaranteed minimum rent, of hotel properties in Germany, the

Netherlands and the UK)

Approval of the objectives and methods chosen to implement

the expansion policy in Services and Hotels, including validation

of major acquisitions (Hotels: acquisition of a controlling interest

in 52 Dorint hotels; Services: stake in Accor Brazil raised to 100%

and acquisition of Kadéos)


Main Issues Discussed

Optimization of the Group’s financial structure using proceeds

from the disposal of non-strategic assets (€500 million worth of

shares cancelled in 2006, proposed payment of a special dividend

of €1.50 per share and €700 million share cancellation program in

2007)

New marketing strategy in the Hotels business

(repositioning of Sofitel, launch of the All Seasons brand)

Compensation policy for the CEO and senior executives, stock

option plans, employee stock ownership policy

Assessment of the Board’s procedures


4 Standing Board Committees

Strategy Committee: 7 members including 3 independent directors

Serge Weinberg (Chairman), Sébastien Bazin, Aldo Cardoso, Francis

Mayer (deceased), Gilles Pélisson, Baudouin Prot and Franck Riboud

Audit Committee: 4 members including 3 independent directors

Aldo Cardoso (Chairman), Isabelle Bouillot, Philippe Camus and Etienne

Davignon

Compensation and Appointments Committee: 4 members including 3

independent directors

Jérôme Seydoux (Chairman), Philippe Camus, Francis Mayer (deceased)

and Serge Weinberg

Commitments Committee: 4 members including 1 independent director

Sébastien Bazin (Chairman), Philippe Citerne, Gabriele Galateri di Genola

and Dominique Marcel


Strategy Committee

Role

Prepare the deliberations of the Board relating to

the Group’s main strategic objectives (changes in

the business portfolio, expansion policy, financial

strategy, etc.)

Five meetings in 2006

Detailed review of all Group businesses in

preparation for the Board’s strategic analysis


Audit Committee

Role

Ensure that the accounting policies used to prepare the Company

and Group financial statements are appropriate and applied

consistently from one period to the next

Check that internal procedures provide adequate assurance

concerning the reliability and completeness of financial information

and the control of Group risk exposure

Verify the effectiveness of the Group’s system of internal control

Prepare the auditor selection procedure


Audit Committee

Five meetings in 2006

Preparation for the approval of the interim and annual

financial statements

Review of the Group’s commitments

Assessment of internal control procedures and main

internal audit findings

Review of the accounting treatment of major transactions


Compensation and Appointments Committee

Role

Prepare the Board of Directors’ decisions pertaining to the

compensation of the corporate officers and the policy for granting

stock options or stock without consideration

Prepare changes in the composition of the Company’s

management institutions

Five meetings in 2006

Recommendation regarding compensation for corporate officers

and executives

Detailed review of stock option plans and the employee share

issue


Commitments Committee

Role

Prepare the Board of Directors’ meetings on all purchases,

sales or other investments that represent a significant

commitment or may have a material impact on the Group’s

business base

Five meetings in 2006

Detailed analysis of the legal and financial terms related to

the main transactions carried out during the year


Accor: High Growth Potential

Combined Ordinary and Extraordinary

Shareholders’ Meeting

of May 14, 2007


A new visual identity

Two core businesses


Executive Summary

Sharp improvement in 2006 results

• Services: a dynamic business environment driving

significant revenue and earnings growth

• Hotels: upturn in the hotel cycle in Europe

Sustained refocusing on our two core businesses

• €1 billion in non-strategic investments divested in 15 months

A new Hotel business model, adapted to each market segment

and region


Executive Summary

A €3 billion investment plan over 2006-2010

• Services: €500 million acquisition plan

• Hotels: ramp-up of the 200,000-room development plan with

€2.5 billion invested

Beyond the investment plan,

two major acquisitions in Services

• Acquisition of 50% of Accor Brazil Services for €154 million

• Acquisition of Kadéos (gift vouchers) in early 2007,

for €210 million


Executive Summary

An An assertive strategy that that benefits shareholders…

An ordinary dividend of €1.45 (+26.1%)

A special dividend of €1.50

i.e. A total 2006 dividend* of €2.95

Share buybacks

€500 million in 2006

€700 million in 2007*

*Submitted to shareholder approval at the

Combined Ordinary and Extraordinary Shareholders’ Meeting


Executive Summary

and and employees

A leveraged corporate savings plan

launched in April 2007

Close to 9,000 employees participated

Heavily oversubscribed

Nearly 30 countries concerned

Accor: High Growth Potential


Cliquez pour modifier le style du titre

du masque

2006: Strong Growth in Results


Income Statement: Key Figures

In € millions

Revenue

EBITDAR

EBITDAR margin

EBITDA

Operating profit before tax and

non recurring items

Net profit

2005

7,136

1,906

26.7%

1,096

569

333

2006

7,607

2,084

27.4%

1,248

727

501

% change

reported

+6.6%

+9.4%

+0.7pt

+13.9%

+27.7%

+50.7%

* L/L: Like-for-like (excluding changes in scope of consolidation and exchange rates)

% change

L/L*

+6.7%

+9.7%

+0.8pt

+15.5%

+28.7%


Accelerated Growth in Revenue in 2006

Strongest top-line growth since 1998

Excellent year for the Services business

• +15.5% like-for-like

Upturn in the hotel cycle:

• In the 1 st quarter in Northern Europe

• In the 4 th quarter in France

+6.1% like-for-like

+7.8%

+6.8% +6.7%

+6.0%

H1

2006

Q3

2006

Q4

2006

FY

2006

Like-for-like growth

in consolidated revenue


Early 2007 in line with Q4 2006

Q1 2007 revenue: €1,887 million

Up 8.9% as reported

Up 7.6% like-for-like

Services revenue: up 14.1% like-for-like

• France: up 19.8%

• Europe (excl. France): up 13.7%

• Latin America: up 10.7%

Hotels revenue: up 7.2% like-for-like

• Upscale and Midscale Europe: up 8.5%

• Economy Europe: up 8.0%

• Economy US: up 2.0%

+7.8% +7.4%

+6.8% +6.7%

+6.0%

H1

2006

Q3

2006

Q4

2006

FY

2006

Like-for-like growth

in consolidated revenue

Q1

2007


Record EBITDAR Margin: 27.4%

The change in scope of consolidation

The change in the Hotels business model

The upturn in the hotel cycle

The streamlined headquarters organization

a 0.8-pt like-for-like improvement in EBITDAR margin

1,891

27.0%

1,971

27.0%

2000 2001

1,936

27.1%

1,769

25.9%

1,825

25.8%

2002 2003 2004

EBITDAR in € millions

Margin

1,906

26.1%

2005

2,084

27.4%

2006

40.8%

(+1.0 pt)

30.6%

(+0.7 pt)

+1.3 pt


Operating Profit Before Tax and Non-Recurring Items

up 28.7%

In € millions

EBITDAR

Rental expense

Depreciation, amortization and

provision expense

Net financial expense

Share of profit of associates after tax

Operating profit before tax and

non-recurring items

2005

1,906

(810)

(416)

(120)

8

569

2006

2,084

(836)

(436)

(96)

11

727

% change

L/L*

+9.7%

+1.7%

+5.4%

-9.4%

N/m

+28.7%

* L/L: Like-for-like (excluding changes in scope of consolidation and exchange rates)

38% 62%


Net Profit Up 50%

In € millions

Operating profit before tax and

non-recurring items

Capital gain/(loss) on asset disposals

Impairment losses

Income tax expense

Profit from discontinued operations (CWT)

Minority interests

Net profit attributable to shareholders

Earnings per share (€)

2005

569

(4)

(107)

(117)

23

(31)

333

1.55

2006

727

55

(94)

(258)

104

(33)

501

2.23

+27.7%

+50.7%

+43.9%


Sharp Increase in the Ordinary Dividend

Operating profit before non-recurring items,

net of tax (€ millions)

Ordinary dividend per share (€)

Payout

i.e. per share (€)

2005

376

1.75

1.15

66%

Payout target in in 4 years: 50% 50%

2006

518

2.30

1.45**

63%

% change

reported

+37.8%

+31.7%

+26.1%

*Operating Profit before non-recurring items, net of tax = Operating profit before tax and non recurring items, less operating tax,

less minority interests

**Submitted to shareholder approval at the Combined Ordinary and Extraordinary Shareholders’ Meeting


Cash Flow: Decrease in Net Debt

In € millions

Funds from operations

Renovation and maintenance expenditure

Free cash flow

Development expenditure

Expenditure on assets held for sale

Proceeds from disposals of assets

Dividends

Change in equity

Change in working capital requirement

Other

(Increase)/decrease in net debt

2005

935

(436)

499

(476)

-

310

(287)

822

297

(342)

823

2006

1,024

(454)

570

(671)

(95)

1,459

(276)

(258)

265

(43)

951


Development Expenditure

Hotels

North America

€7 M

Hotels

€ 342 M

Hotels

Latin America

€34 M

+

Services

€ 248 M

Hotels

Europe

€131 M

Hotels

Africa – Middle East

€17 M

+

Other

€ 81 M

Hotels

Asia-Pacific

€153 M

=

Total

€ 671M


Strategically Aligned Disposals

Disposals of non-strategic businesses

Property disposals

TOTAL

• Compass

• Club Med

• Carlson Wagonlit Travel

• Other

• Sale & management-back (6 US Sofitels)

• Sale & variable lease-back (Foncière des Murs: 72 hotels)

• Sale & franchise-back (26 hotels)

• Sales (25 hotels)

In € millions

95

202

334

128

759

211

407

34

48

700

1,459


A Robust Financial Position

Net debt (€ millions)

Gearing

Funds from operations before nonrecurring

items / adjusted net debt*

2005

1,420

32.3%

16.8%

2006

469

11.3%

22.2%

Change

+5.4 pts

*Net debt adjusted for NPV of minimum lease payments discounted at 8% (Standard & Poor’s

method)

FFO/adjusted net net debt debt ratio ratio > 20%

20%


Strong Improvement in ROCE

In %

Upscale and Midscale Hotels

Economy Hotels

Economy Hotels US

Total Hotels

Services

Other businesses

TOTAL

Strong Strong improvement in in profitability

2005

7.9%

17.0%

7.7%

9.9%

26.0%

6.7%

10.7%

2006

8.7%

19.2%

9.0%

11.1%

25.3%

6.3%

11.9%


Sale of Red Roof Inn in April 2007

2006: Strategic review begun

April 2007: Sale to a consortium comprised of

Citi Group and Westmont Hospitality Group

• Price: $1.32 billion for 326 hotels

• 11.2x 2006 EBITDAR

• Cash impact: $610m (€470 M)


33

Sustained Disposal of

Non-strategic Businesses

Sustained Disposal of

Non-Strategic Businesses


Non-Strategic Business Already Divested

GO Voyages sold in February 2007

Price: €281 million

22x EBITDA

€210 million capital gain

3-year commercial agreement


Non-Strategic Business Now Being Divested

Managed Contract Catering in Italy

2006 revenue: €310 million

2006 EBITDA: €14 million

Calendar: by end of first-half 2007


36

Optimizing

the Balance Sheet Structure


Principles of financial strategy

regarding excess cash

Disposal of

non-strategic investments

2006 (CWT, Compass, Club Med)

2007 Go Voyages

TOTAL

2006 return to shareholders

To be returned

Possible return to shareholders

€500 M

€760 M

€280 M

€1,040 M

- €500 M

€540 M

Property disposals

and 2006 Cash Flow

FFO / Adjusted Net Debt = 22.2%

Investments with ROCE >15%

As of Dec. 2006,

ability to return

€500 M additional to shareholders

while maintaining BBB rating (*)

(*) FFO / adjusted net debt should be 20.4% vs 22.2% à fin 2006 with €500 M

additional returned to shareholders


Optimizing the Balance Sheet Structure

€1 €1 billion in in 2007

Share buybacks*: €700 million in 2007

• 18-month authorization given, in accordance with the law, to buy back up

to 10% of outstanding shares, with the possibility of canceling them over

24 months

• In 2006, 10.6 million shares (i.e. 5% of share capital) have already been

repurchased (for €500 million) at an average price of €46.92 and canceled

• A maximum of 5% can be purchased and canceled by June 2008, i.e.10 million

shares at €70 representing €700 million

Special dividend*: €1.50 per share or €320 million

*Submitted to shareholders’ approval at the

Combined Ordinary and Extraordinary Shareholders’ Meeting


77

72

67

62

57

52

47

42

Accor Share Price

Total Shareholder Return

(share price + 2006 dividend)

Up 27.6%

2006

Accor: up 26.3%

CAC 40: up 17.5%

2007*

Accor : €71,33

up 21.5%

CAC 40: up 9.2%

* As of 05/11/2007

J F M A M J J A S O N D J F M A M


A Value-Creation Driven

Acquisitions Program


3 Product Families

Vouchers

+ tailored

services

Human

Resources

Marketing

Services

Expense

Management


5 Growth Drivers

Market

penetration

Product line

extensions

Organic growth

8% to 16% per year

2006-2010

International

deployment

Openings

in new

countries

Acquisitions

External

growth

5% per year


5 Growth Drivers

Market penetration

Improving regulatory environment

• Bulgaria, Slovakia (Ticket Restaurant)

• Mexico (Ticket Car)

Increased tax exemptions and higher face values

• Hungary, Turkey, UK, etc.

Web-based access to SMEs (Ticket Express)

• Brazil: 80% of new contracts

• France: 25% of new contracts


5 Growth Drivers

Product line extensions

CESU in France: a major tender win

• 100,000 government employees

• €20 million in issued volume

International deployment

Introduction of Compliments gift vouchers

• South Africa

Childcare vouchers

• Spain, Romania


Value-Creation Driven Acquisitions

2006

€94 million

+

50% Accor Brazil

€154 million

Early 2007

€18 million

+

€210 million

Human

Resources

Commuter Check

Services (US)

Serial (Italy)

Inaction (Sweden)

Marketing

Services

RID (India)

Calicado (Germany)

Tinten Lingen

(Netherlands)

(France)

Expense

Management

Autocupon

(Mexico)


Strengthened Presence in Brazil in 2006

Acquisition of 50% of Accor Brazil:

€197 million (of which €154 million in Services)

6.0x EBITDA

Accor is the Brazilian market leader with a 38% share and 4 million

users/day

Issued volume: €2.2 billion

Present in a wide range of products: Ticket Restaurant, Food Ticket,

Ticket Transport, Ticket Car, Accentiv’


Acquisition of Kadéos in 2007 (1)

The French gift voucher market in France

€2 billion in estimated issued volume

High growth potential

• B2B: 10-15% per year

• B2C: 20-25% per year

Creation of the leader in gift cards/vouchers in France

Kadéos + Ticket Compliments: €500 million in issued volume

High awareness of the Kadéos brand

Technological platform and effective marketing

Preferred access to a network of prestigious retailers:

FNAC, La Redoute, Conforama… (PPR brands)

Distributed through 6,500 sales outlets


Acquisition of Kadéos in 2007 (2)

Acquired for €210 million

Issued volume: €336 million

15x 2007 EBITDA

15% ROCE targeted for 2009 (excluding international

expansion)

€175 million in cash holdings

Impact on consolidated profit

Accretive to profit before tax in 2008


Conclusion

Towards a More Balanced Business Base

Product line extensions

• New products (other than Ticket Restaurant and Ticket

Alimentation) represented 32% of revenue in 2006 versus

15% in 2003

Technological shift

• Cards represented 26% of revenue in 2006 versus less

than 10% in 2003

Geographic diversification

• Europe: 58% of revenue

• Latin America: 39% of revenue


A New Business Model

High Growth Potential


A New Business Model Based on a

Brand Strategy

and

Appropriate Ownership Structures


The New Business Model

A strategy supported by strong brands

to sell our expertise through

management and franchise contracts

An asset-right strategy, with ownership

structure adapted to the risk-reward

profile of each segment and region

70%

2009

Estimated

30%

Ownership

+

Fixed leases

Management

Franchises

Variable leases

Management

contracts

Variable leases

Management

Franchises

Variable leases

Franchises


A New Business Model Based on

The Brand Strategy


Strong, Better Positioned Brands

To Develop Management and Franchise Contracts


Marketing Platforms

to Act as Brand Performance Multipliers

Energizing sales with the Internet

• More than 90 million visits in 2006 (up 36% )

• 12.7 hotel nights booked (up 28%)

• 56% of customers book for a destination outside their home country

• 1,165,000 people in the Web database

• 11.7% of hotel nights were booked online (9.6% in 2005)


A Revitalized Budget Hotel Business

A renovated concept in France

• Rooms and food service areas

• 150 hotels by 2010

A new concept outside France

• For renovations and new hotels

• A truly innovative room design

New Formule 1 room

New Etap Hotel room


A Re-Energized Economy Hotels Business

A rebirth expressed by

• Roll-out of the new room concept

• A pan-European advertising campaign

High service levels

• The “15-minute Satisfaction Contract”

• 24-hour restaurant concepts

A commitment to quality and sustainable development

• ISO 14001-certification

• First brand to be ISO 9001-certified

A vast network outside France

• 759 hotels in 37 countries


Strategically Repositioning Novotel

Novotel: an international midscale brand (hotels & resorts)

A concept targeted:

• 70% business - 30% leisure

• 70% domestic - 30% international

• 70% individuals - 30% groups

A new identity

• A radically different advertising campaign

• Signature: “A brand that creates places where the traveler

feels right at home”

• A new logo and graphic standards


Strategically Repositioning Novotel

An international network of 386 hotels in 56

countries

• New high-profile addresses: Hong Kong,

Beijing, Moscow, Monte Carlo, Buenos Aires

An innovation-driven brand

• e.g.: partnership with Apple

A strong commitment to sustainable development

• Strategic partnership with Green Globe

• New HQE properties (e.g.: Montparnasse)

Novotel Bucarest Bucharest

Novotel Paris Gare Montparnasse


Novotel: the Novation Room


Novotel Facades and Lobbies

Paris Gare Montparnasse

Hong Kong

Dubaï

Bucharest


An Innovative Concept

That is Expanding in the Global Market

Strategic positioning

• An innovative hospitality concept: 30 sq. m suites

• Modern services for independent customers

• A network of 21 hotels in 4 European countries

• International projects in Marrakech, Prague and Dubai

Target

• Business (28 - 45 years old, road warriors)

• Leisure (couples with or without children)

A new generation room in early 2008


A Comprehensive Range of Non-Standardized Brands

“4M”

Rebrand large non-standard upscale

Sofitels (e.g.: Sofitel Sèvres and Sofitel

Paris Charles de Gaulle Airport)

Mercure

Develop an aligned services offering in a

more international network

All Seasons

200 hotels in five countries over the next

three years


2007: Launch of the All Seasons brand

A new non-standardized economy chain, located in

downtown areas and centers of activities

The unbeatable charm of independent hotels backed by

the network and strengths of a large Group

Product and services based on simplicity, friendliness,

interactivity and reliable quality

Launch scheduled for September 2007 (already 19

hotels in the pipeline), with the goal of opening 200 units

by 2010. Access to our eight expertise platforms

Artist impression


A Typical All Seasons Room

Transparency and a feeling of spaciousness

Functional, decorative fixtures

Majestic bed

Decorative headboard

High-quality linens

(comforter and pillows)


Sofitel: A New Vision and a Lot of Ambition


A New Brand Identity

Pure logo and

simple typeface

A strong visual

symbol

A new graphics

territory


Lenôtre: Celebrating Luxury

2006: A Year in the Limelight

A traditional Christmas log designed by Philippe Starck

Integration of Fauchon stores

Very good results from restaurants and École Lenôtre

On February 21, 2007,

the Pré Catelan and its chef,

Frédéric Anton, entered the exclusive

circle of three-star restaurants in the

Michelin Guide


A New Business Model Supported by

Ownership Structures Adapted

to Each Segment and Region


Owned

Fixed leases

Owned

Fixed leases

Owned

Fixed leases

Franchises

“Asset-Right” Strategy

Current model

RETURN

ROCE

4% / 8%

8% / 12%

10% / 15%

*Mature countries

VOLATILITY

Change in

RevPAR

-15% / +15%

-4% / +4%

+0% / +4%

New New business business model model adapted adapted to to each each segment: segment:

the the “Asset-Right” strategy strategy

Preferred

operating

structure*

Management

contracts

(possibly with

minority stakes)

Variable leases

Management

Franchises

Variable leases

Franchises


Preferred Non-Capital Intensive Operating Structures

• % of revenue

• No guaranteed minimum

• Long-term contracts

• Renovation program

partially financed by owner

Non-capital-intensive

operating structures

Management

contracts

21%

Hotel base at December 31, 2006

(% of total rooms)

Variable leases

9%

Franchises

20%

Owned

19%

Fixed leases

31%

Capital-intensive

operating structures

Increased Increased profitability and and reduced reduced earnings earnings volatility volatility


80% of the Hotel Base Restructured by End-2009

Completed

2005 - Feb. 2007

To be carried out

March 2007 - Dec. 2008

Total

2005 - 2008

New program

2008 - 2009

Number

of hotels

433

+

376

=

809

550

Total

€3.2bn

+

€1.9bn

=

€5.1bn


(excl. RRI)

The New Business Model Will Reduce the

Volatility of Future Cash Flows

Hotel Network

at Dec. 31, 2004

Hotel Network

at Feb. 28, 2007

Estimated Hotel Network

at Dec. 31, 2009

(Excluding expansion)

38%

51%

70%

Reduced impact impact of of the the hotel hotel cycle cycle

% hotels operated under

variable leases

management contracts,

franchise agreements


High Growth Potential


2010 Expansion Plan

200,000 rooms to be opened

Mostly in the economy and

midscale segments

A majority under management or

franchise contracts

Focus on emerging markets, with

nearly 50% in the BRIC countries

Midscale

34%

Franchised

21%

Upscale

15%

Managed

47%

Emerging markets

60%

Economy

51%

Owned & Leased

32%

Mature markets

40%


Capital Investment by Region

North America €100m

South America €150m

• of which Brazil

€50m

Europe

• Economy

• Midscale

Africa - Middle East €200m

Asia

€1,200m

• of which China

• of which India

Other €100m

Total investment

€2.5 €2.5 billion from 2006 to to 2010

with with a targeted 15% 15% ROCE

€800m

€400m

€750m

€600m

€50m


Ramping Up the Pipeline

Ramp-up of the pipeline

75,000 rooms committed

at end-March 2007

In 2006, programs were implemented to meet the target of opening

200,000 new rooms by 2010:

Revitalizing the brands

Forging partnerships

21,675

2006

32,000

25,000

7,000

2007

Hiring more business developers

40,000

8,000

32,000

2008

53,000

35,000

18,000

2009

Total

200,000

rooms

54,000

2010

Completed

Committed

To come


Europe (1/2)

Priority zone

48 new hotels in 2006

57 new hotels since the beginning of 2007

(as of April)

Ibis and Etap

UK: 26 hotels committed

France: 22

Spain: 21

Eastern Europe: 12

Mercure

Priority on management and franchise:

e.g. 23 hotels of the MacDonalds chain in

the UK in 2007

Franchises in France and Italy

Ibis Madrid Barajas Airport - Spain

Shakespeare Hotel de Stratford-upon-Avon - UK


Europe (2/2)

Novotel

Priority on main cities

with owned or managed

hotels

Sofitel

Management contracts

in European capital cities

Novotel Budapest - Hungary

Grand Hotel Sopot by Sofitel - Poland


North America

Refocusing on Motel 6 :

expansion in franchise

USA

• 875 hotels + 43 Studio 6

• Leader in California (181 hotels)

• Continued expansion of the franchise

network: 25 hotels + 1 Studio 6 opened in

2006

Canada

• Faster development of Motel 6

(9 hotels + 1 Studio 6 opened)

Motel 6 Orlando International Drive

Motel 6 Dallas Airport North


Economy Hotels in China

Projects for 2010:

20,000 rooms

Opened

1

2004

Opened

5

2006

36

Under

construction

40

Under

negotiation

2007 - 2008

TOTAL

100: 2010 target

Number of hotels opened and under construction

81

2008

100

2010 target

15 business developers in China, versus 1 in 2004


Priority Regions for Ibis Development

1 st Priority

2 nd Priority

Urumqi

Southwest

China

Xining

Kunming

Lanzhou

Chengdu

Central

China

Yinchuan

Guiyang

Xi’an

Chongqing

Hohhot

Taiyuan

Zhengzhou

HUBEI

Wuhan

Changsha

Shenyang

Beijing

Tianjin

Nanjing

Hefei

Guangzhou Shantou

Nanning

Shenzhen

Zhuhai

Haikou

Jinan

Nanchang

Dalian

Harbin

Changchun

Qingdao

Shanghai

Hangzhou

Ningbo

Fuzhou

Taipei

Xiamen

Pearl

River

Delta

Northeast

China

Baohai

Economic

Circle

Yangtze River

Delta


Development in China

Ibis Wuxi

Novotel Citygate Hong Kong

Sofitel Xian

Grand Mercure on Renmin Square - Xian

Sofitel Hyland Shanghai


Expansion in India

2 partnerships

InterGlobe:

• Ibis: 2,500 rooms in 2010

EMAAR Properties:

• Formule 1: 10,000 rooms in 2015

All brands: 5,000 rooms in total by 2010

Sofitel Bandra Kurla Complex

Ibis Novotel Complex,

Bangalore

Novotel Hyderabad

Sofitel Mumbai Mulund


Latin America

60% of development is in Brazil

Novotel and Sofitel in the main

capital cities

Ibis: network across the region

Formule 1 in Brazil only

Mercure et Ibis São José dos Campos

Sofitel Rio de Janeiro


The Middle East

Management contracts and partnerships

Sustained strong growth in the Upscale market

(20 showcase Novotel + Sofitel projects)

Expansion in the Economy segment

Novotel – Dubai World Trade Center Sofitel The Palace - Dubai

Novotel Al Anoud – Riyadh


Africa

Morocco:

• Ibis: development of a national

network

• Casablanca City Center (Novotel/Ibis

complex)

• Complement to the resort network

(Sofitel and Thalassa)

Algeria: 15 to 20 Ibis by 2010

Other countries: Ibis and Novotel in large

cities across the continent

Sofitel El Gezirah – Cairo

Ibis Marrakech Palmeraie


Accor’s Commitments to:

Employees

Sustainable Development

Corporate Sponsorship


Our Ambition

Enhance our global market leadership in Service

vouchers to improve the productivity of businesses

and public institutions and the well-being of

employees

To be the leader in Economy and Midscale Hotels

and a major player in the Upper Upscale segment

on the five continents


Our Values

Innovation is our trademark

A winning spirit is the engine that drives our growth

Performance is the key to our future success

Respect is the foundation of all our relationships

Trust is the heart of our management style


Accor: High Growth Potential

40 Years Old: A New Start!


Accor: High Growth Potential

Combined Ordinary and Extraordinary

Shareholders’ Meeting

of May 14, 2007


Presentation of the Resolutions

Submitted to the Vote


First resolution

Approval of the 2006 Financial Statements

of the Company


Second Resolution

Approval of the 2006 Financial Statements

of the Group


Third Resolution

Appropriation of 2006 Profit

Ordinary dividend of €1.45 per share

Due to disposals of non-strategic businesses: special dividend of

€1.50 per share

Total dividend: €2.95 per share, paid as of May 16, 2007


Fourth Resolution

Election of a Director

Augustin Romanet de Beaune, 45, Chief Executive Officer of

Caisse des Dépôts

Elected Director for the statutory three-year term


Fifth Resolution

Reappointment of Deloitte & Associés as Statutory

Auditors

Reappoint the firm for a six-year term

Rotation of the lead engagement partners


Sixth Resolution

Reappointment of BEAS as Alternate Auditors

Reappoint the firm for a six-year term


Seventh Resolution

Reappointment of Ernst & Young et Autres as

Statutory Auditors

Reappoint the firm for a six-year term

Rotation of the lead engagement partners


Eighth Resolution

Reappointment of Auditex as Alternate Auditors

Reappoint the firm for a six-year term


Ninth Resolution

Approval of a Related Party Agreement

Persons concerned: Jérôme Seydoux and Dominique Marcel,

members of the Board of Directors

Sale of Shares in Compagnie du Mont Blanc (9.64% of the

company’s capital) to Compagnie des Alpes and to Sojer


Tenth Resolution

Approval of a Related Party Agreement

Person concerned: Jérôme Seydoux, member of the Board of

Directors

Sports agreement between Accor and Olympique Lyonnais:

marketing rights and advertising of Novotel and Ticket Restaurant

Brands

• Payment by Accor S.A. of a fixed annual fee of €8 million for the 2006/2007

season and €9 million for the 2007/2008 et 2008/2009 seasons

• Three-year contract with possible renewal for an additional two-year term


Eleventh Resolution

Approval of a Related Party Agreement

Persons concerned: Francis Mayer (deceased) and Gilles Pélisson,

members of the Board of Directors

Sale of shares in Club Méditerranée

• Sale of 16% stake based on a price of €44.90 per share (quoted

price on June 8, 2006) to a stable group of investors bound by a

shareholders’ agreement

A three-year partnership agreement


Twelfth Resolution

Approval of a Related Party Agreement

Payment of an exceptional amount of €300,000 to each of Accor’s

Co-Chairmen and Co-Founders, Paul Dubrule and Gérard Pélisson as

remuneration for advisory and representative work carried out during

2006 on behalf of the Group


Thirteenth Resolution

Approval of a Related Party Agreement

Participation of Gilles Pélisson in the supplementary retirement

plan set up for Accor S.A.’s senior managers and executives


Fourteenth Resolution

Approval of the Continued Execution of Related

Party Agreements Authorized in Prior Periods


Fifteenth Resolution

Authorization to be Given to the Board of Directors

To Trade in the Company’s Shares

Maximum purchase price: €100 – minimum share price: €45

Maximum number of shares to purchase: 20,650,000 representing a

maximum total investment of €2,065 million

18-month authorization

Authorization non valid when the Company is the target of a

takeover bid


Sixteenth Resolution

Authorization to Reduce the Company’s Capital by

Canceling Shares

Authorization to cancel all or some of the shares bought pursuant

to the fifteenth resolution. The number of shares cancelled in any

given 24-month period may not exceed 10% of the total shares

outstanding


Seventeenth Resolution

Authorization to Issue Shares With Pre-emptive

Subscription Rights for Existing Shareholders

Purpose: To give the necessary flexibility to act swiftly to raise the

financial resources to implement the Group’s growth strategy, based

on the opportunities offered by the financial market and in the best

interest of the Company and the shareholders

The aggregate par value of shares issued is capped at €200 million,

representing 31% of the capital at December 31, 2006

The aggregate nominal value of debt securities is capped at €4

billion

This authorization was not used in 2006


Eighteenth Resolution

Authorization to Issue Shares Without Pre-emptive

Subscription Rights

Purpose: To react quickly to any financial opportunity arising in

rapidly changing and diverse financial markets in France and abroad

by swiftly mounting issues that can be placed with investors

interested in certain types of financial instruments

The aggregate par value of shares issued is capped at €100 million,

representing 15% of the capital at December 31, 2006

The aggregate nominal value of debt securities is capped at €2

billion

Shareholders may be offered the opportunity to subscribe to the

securities on a priority basis

This authorization was not used in 2006


Nineteenth Resolution

Authorization to Issue Shares in Payment for

Contributed Assets

This authorization may not exceed 10% of the capital

Purpose: To proceed swiftly and flexibly with acquisitions paid with

Accor shares

Guarantees under rules related to contributed assets (appraisal

auditors, etc) remain in effect

This authorization was not used in 2006


Twentieth Resolution

Authorization to Increase the Amount of Any Issues

That Are Oversubscribed

May not exceed 15% of the original issue amount

Purpose: To grant a greenshoe option in accordance with standard

market practices, in order to meet investor demand for the new Accor

shares being issued

This authorization was not used in 2006


Twenty-first Resolution

Authorization to Issue Shares to be Paid Up by

Capitalizing Retained Earnings, Profit, Additional

Paid-in Capital or Any Other Eligible Amounts

The Board of Directors may use this authorization in tandem with a

share issue for cash carried out pursuant to the seventeenth or

eighteenth resolution. The authorization may also be used to raise

the par value of existing shares

This authorization was not used in 2006


Twenty-second Resolution

Blanket ceiling on the authorizations to issue

shares and/or shares equivalent

The maximum aggregate par value of shares to be issued pursuant

to the above authorizations may not exceed €300 million


Twenty-third Resolution

Authorization to Issue Shares and/or Share

Equivalents to Employees Who Are Members of an

Accor Group Employee Stock Ownership Plan

Without Pre-emptive Subscription Rights for

Existing Shareholders

Purpose: To motivate and retain employees by giving them a stake

in their Company’s performance

Designed to limit the dilutive impact of existing shareholders

The total number of shares that may be issued under this

authorization would be limited to the equivalent of 2% of the

Company’s capital


Twenty-fourth Resolution

Alignment of the Company’s Bylaws with Article 35

of French Governmental Decree 2006-1566 of

December 11, 2006 Amending Decree 67-236 of

March 23, 1967 Relating to Commercial Companies

– Amendment of Article 24 of the Bylaws

Setting the record date as the third business day preceding the

Shareholders meeting, and introducing the requirement for the bank

or the broker that manages shareholders security account to issue a

certificate attesting to the shareholders’ ownership of the shares


Twenty-fifth Resolution

Alignment of the Company’s Bylaws with Article 30

of French Governmental Decree 2006-1566 of

December 11, 2006 Amending Decree 67-236 of

March 23, 1967 Relating to Commercial Companies

– Amendment of Article 25 of the Bylaws

Allowing the possibility of electronic voting, based either on a

secure electronic signature or on the shareholder’s unique username

and password recorded on the Company’s dedicated electronic

voting website


Twenty-six Resolution

Powers to carry out formalities


Accor: High Growth Potential

Combined Ordinary and Extraordinary

Shareholders’ Meeting

of May 14, 2007

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