General Meeting of Shareholders

accor

General Meeting of Shareholders

W E B U I L D

S M I L E S

General Meeting

of Shareholders

May 20, 2003

Sofitel Paris Forum Rive Gauche

1


Accor: Two Global Activities

157,000 employees

Sofitel Chicago

Hotels:

4th Largest Hotel Group

3,854 Hotels (443,726 rooms)

in 90 countries

Services:

Worldwide Leader in Service Vouchers

with 13 Million Users in 32 Countries

2


Summary

2002 Annual results

and Activity at the End of March 2003

Accor’s Strategy

Current Priorities

Shareholder Structure

3


2002 Annual Results

4


2002 Highlights

Sales : +0.9% like-for-like (-2.1% on a reported basis)

Ebitdar margin maintained: 27.1% vs 27.0% in 2001

PBT of € 703 million met target

Unchanged dividend: € 1.05 (yield = 4%)

Improved free cash flow

600

+7,5%

645

2001 2002

5


€ 0.87

150

104

Long Term Growth Strategy

Cagr 1994-2002

PBT: +21.3%

FCF: +25.6%

EPS: +12.8%

(in € millions)

195

123

231

146

373

285

496

339

595

347

751

562

758

600

1994 1995 1996 1997 1998 1999 2000 2001

703

645

2002

€ 2.28

6


PBT

per share

EPS

reported

Industry Performances 2002 vs. 2000

Accor

-7.1%

-4.4%

Six

Continents

-25.4%

-72.5%

Hilton

Group

-6.9%

-33.4%

NH

Hoteles

-17.0%

-20.0%

Sol

Melia

-66.9%

-96.8%

Marriott

International

-37.9%

-42.2%

Starwood

-58.8%

-13.7%

Hilton

Corp.

-29.6%

-28.4%

7


2002 Key Figures

in € millions 2001 2002 ∆ 02/01

Sales 7,290 7,139 -2.1%

Ebitdar 1,971 1,936 -1.8%

PBT 758 703 -7.3%

Net Income 474 430 -9.3%

EPS (in €) 2.40 2.18 -9.2%

8


Cash Flow 2002

in € millions 2001 2002

Cash flow from operations 1,005 961

Investments for renovation

and maintenance (405) (316)

Free cash flow 600 645 +7.5%

Investments for development (923) (802)

Disposals 535 660

Increased free cash flow

9


Financial Ratios

in € millions 2001 2002

Equity and minority interests 4,279 3,984

Net debt 2,849 2,802

Financial ratios

– Net debt-to-equity (Gearing) 66.6% 70.3%

– Interest cover (1) x5.4 x5.6

– F.F.O. (2) / Adjusted net debt (3) 17.3% 16.5%

(1) Ebitdar / (cash financial expense + 1/3 of full-year rents)

(2) Funds from operations = Consolidated cash flow from operations + 2/3 of full-year rental expense

(3) Net debt adjusted to include eight times current year rental expense

Financial ratios under control

10


Debt Structure as of December 2002

Two major transactions achieved in 2002

– 3/5-Year convertible bond (OCEANE) € 570 M

1% coupon, issued in April 2002

– 4-Year bond € 400 M

5% coupon, issued in December 2002

Diversity of funding

– 43% bank loans and other

– 57% bonds

Average interest rate on total debt 3.80%

– Fixed rate (40%) 3.88%

– Variable rate (60%) 3.74%

Unutilized confirmed

long term credit lines € 882 M

Maturity profile

9%

4%

22%

51%

10%

4%

2003 2004 2005 2006 2007 2008+

11


Return on Capital Employed (ROCE)

®

and Value Creation (EVA )

in € millions

EVA®

28

141

214

1996 1997 1998 1999 2000 2001 2002

ROCE before tax 9.0% 10.2% 11.2% 11.2% 11.7% 11.5% 10.7%

ROCE after tax 7.0% 8.1% 8.7% 8.7% 9.0% 9.1% 8.6%

WACC 6.7% 6.4% 6.3% 6.4% 6.7% 6.6% 6.2%

(Weighted Average

Cost of Capital)

224

265

291 278

12


2002 Dividend maintained

Despite a decrease of 9.2% in EPS,

Dividend maintained at €1.05 (net)

Dividend

Yied

5.5%

(including tax credit,

based on a share price of € 28.86

at December 31)

Payable on June 2, 2003

Distribution

Rate

48.2%

(vs. 37.4%* in average

for the French CAC Index)

* source: JCF Quant

13


Activity

at the End of March 2003

14


Q1 2003 Sales

Reported

in € millions variation (%)

∆ Like-for-Like

HOTELS 1,104 -2.9% +0.2%

– Business and Leisure 625 +2.7% +1.4%

– Economy (excl. the U.S.) 249 +4.3% +1.6%

– U.S. Economy 230 -20.5% -3.4%

SERVICES 111 -12.3% +8.4%

Other businesses 343 -15.1% +0.9%

Total 1,558 -6.5% +1.0%

15


Accor’s Strategy

16


Accor’s Strategy

Favorable fundamentals

Well-balanced portfolio of businesses

Sustainable Development

17


Increasing number of

international travellers

(in millions)

290

Strong Demand Growth

Cagr : +4.4%

700

1980 2000 2020 (P)

Source : World Tourism Organization

1,600

Growing leisure time and

disposable income

Democratization of airlines fares

Emergence of web-based travel

services

Strong Demand for

Midscale and Economy Products

18


Europe: a Fragmented Market,

Ripe for Consolidation

70%

USA

30% of worldwide market

Limited supply growth:

+1.8% in 2002

(+0.9% 2003e)

Sources: STR, Merrill Lynch, MKG

Hotel chains penetration rate

Independent

hotels

Hotel

chains

Europe: First Market Worldwide,

A Priority for Accor

24%

Europe

50% of worldwide market

Limited supply growth :

+0.8% in 2002

19


Rank

1

2

4

5

Accor

European Leader

Louvre / Envergure

Hilton International

225,284 2,092

3 Six Continents 64,848 418

Rank

1

2

4

5

Hotel Chains

Best Western 70,570 1,120

Accor

Choice

Worldwide Group

Hotel Chains

Cendant

Hotels: European Leader

and Worldwide Group

Six Continents

Rooms Hotels

60,535

869

51,514 243

Rooms Hotels

540,000 6,400

515,000 3,300

3 Marriott International 463,400 2,600

440,807

3,829

413,666 4,622

Sources: Accor, MKG Conseil (February 2003), Company data

at December 2002

Geographical Breakdown of the Hotel Portfolio

North

America

31%

Latin

America

5%

Europe

51%

Africa

Middle-East

5%

(in % of rooms at

December 31, 2002)

Asia

Pacific

8%

20


Hotels: Strong Presence

in the Main European Countries

Spain

13e (3,203 rooms)

U.K.

8e (4,328 rooms)

2%

Belgium

1er (5,841 rooms)

10%

France

1er (116,118 rooms)

18%

Netherlands

1er (6,372 rooms)

8%

Germany

1er (46,082 rooms)

7%

Italy

5e (4,328 rooms)

1% 0.4%

Ranking and Accor’s market share in 2002

(in % of total rooms)

Sources: Accor, MKG

21


Accor’s Offer Fits with Demand

for Midprice and Economic Accomodation

Economy

€ 22 - € 70

Midscale

€ 70 - € 200

Upscale

€ 150 - € 400

9% of rooms

36% of rooms

55% of rooms

(as of December 31, 2002)

22


Geographically Balanced

Business Portfolio

North France Europe Rest of

America (excl. France) the World

Sales 2002 22% 34% 31% 13%

€ 7,139 million

Ebitdar 2002 26% 29% 33% 12%

€ 1,936 million

PBT 2002 11% 39% 38% 12%

€ 703 million

23


Accor Hotels

network

19%

17%

42%

Owned

Leased

Managed

Franchised

22%

Hotels: Well-Balanced Type of Operations

and Management of Country Risks

North America

29%

56%

1%

14%

22%

Europe

42%

(in % of rooms, as of December 31, 2002)

8%

28%

Rest of the world

15%

9%

72%

134,593 rooms 225,284 rooms 80,930 rooms

4%

24


Services: Strong Growth

Steady growth in PBT

+15% Cagr 1996-2002

Non capital intensive

(6.1% of total capital employed)

High return on capital employed

26.7% in 2002

% group

80

35%

100

27%

Profit before tax

109

22%

118

20%

126

17%

180

24%

186

26%

1996 1997 1998 1999 2000 2001 2002

25


Accor Services: Worklife Solutions

Adapted to Today’s Lifestyles

: Offer

Facilitate Life Essentials

Enhance Well-Being

Increase Performance

26


New countries:

Expansion of Services

in 2002 and Beyond

– Some 15 opportunities under study

New products:

– 20% of total services sales in 2002

– Launch of Tesorus and Foragora in France

New clients:

– up 12.6% in volume issued

on a like-for-like basis in 2002

27


Human Resources

Sustainable Development is a natural

component of Accor’s Strategic Vision

Environment

Two main challenges: Water and Energy

Investor Information

Integration of Accor in the main sustainable indices

Customers and Suppliers

Sustainable Procurement Charter, Outsourcing Charter,

Fair Trade

Social Responsability

Emergency Assistance and Child Sponsorship

Sustainable Development

Strategy in 5 areas

28


Human Resources

Employees proud to work for Accor: 82%

(International Survey SOCIOVISION COFREMCA 2001)

The Accor Academy (on site training and e-learning)

- 100,000 courses in 2002

Internal Mobility

- Accor jobs on Intranet

- 10,000 beneficiaries in 2002

25,000 employee shareholders (2.2% of the capital)

Supporting Personal Fulfillment

29


Current Priorities

30


Current Priorities

Increase market share

Defend margins

Highly selective capex

Maintained pace of expansion

31


A reference

in terms of:

• service

• innovation

• value for money

Strong

brand recognition

boosted by Accor

endorsement

Capitalizing on Accor’s Name and Brands

W E B U I L D

S M I L E S

32


Accor Marketing Tools

to Increase Market Share

Efficient central booking system

11 million room nights in 2002, up 23% vs. 2001

Loyalty programs

875,000 members, up 10.2% vs. 2001

Partnerships

Air France, Delta Airlines, SNCF, Europcar, Total...

Accorhotels websites

bookings in Europe up 155% in 2002

3.6% of total net room nights (2.6% in Europe, 6% in the US)

More than 17 000 bookings a day since the beginning of May

An assertive marketing strategy

33


Defend margins

1997 - 2002

Technological leap forward with “Accor 2000” highly performant tools:

global Accor reservation system, international sales,

yield-management, cross-functional purchasing and technology organizations

2003

optimized, streamlined organization:

– By region (Europe, North America, Latin America, Asia Pacific)

– On a multibrand basis

34


1,251

Highly Selective Capex

Expansion capex

(in € millions)

923

802

700-750

2000 2001 2002 2003e

Expansion capex maintained in Europe

and in midscale and Economy hotels

Major reduction in Sofitel capex

Increased investments in Services

(acquisitions)

35


25,000

16,000

(in number of rooms)

Organic growth

Acquisitions

Maintained Pace of Expansion

20 000 rooms in 2003

20,000

25,000

14,500 15,000

2000 2001 2002

20,000

2003(e)

Selective investments in terms of

products and location

(economy and midscale hotels in Europe)

Expanding the network through

management contracts, joint ventures

and franchises

(upscale hotels, outside Europe)

Potential regional acquisitions

36


Shareholder Structure

37


International

Institutional

Investors

51.7%

of which:

Europe 33.2%

USA 16.7%

Shareholder Structure

at December 31, 2002

19.7%

51.7% 13.7%

French Institutional Investors

19.7% (of which mutual funds 14.7%)

14.9%

Individual Investors

13.7%

of which 2.2% of the capital owned by

25,000 employees (0.91% through

employee stock ownership programs)

Supervisory Board and

Management Board

14.9%

38


Conclusion

ACCOR has demostrated its ability to

PERFORM WELL in CHALLENGING TIMES

thanks to its RESPONSIVE FRONT-LINE TEAMS

and is in a

GOOD POSITION

to

LEVERAGE ANY REBOUND

Medium and long-term potentials remain inchanged

39

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