Strong Start to the Year in the Hotels Business in Europe PARIS,
April 15 /PRNewswire-FirstCall/ -- Accor's consolidated revenue
totaled EUR 1,791 million for the first three months of 2007. This
represented a 4.8% increase at comparable scope of consolidation
and exchange rates (like-for-like) and a 5.1% decline as reported.
(in EUR millions) 2007 2008 Change as Change reported
like-for-like(1) Hotels 1,323 1,286 -2.8% +3.7% Upscale and
midscale 742 762 +2.6% +3.9% Economy 365 387 +6.1% +5.3% Economy US
216 137 -36.4% +0.1% Services 207 227 +9.5% +10.4% Other businesses
357 279 -22.1% +5.6% Total 1,887 1,791 -5.1% +4.8% (1) At constant
scope of consolidation and exchange rates. First-quarter 2008
revenue performance reflects the impact of: - The strategic
refocusing on the Hotels and Services businesses (with the
disposals of Go Voyages, the Italian foodservices operations and
Red Roof Inn) and the continued deployment of the "asset-right"
strategy of adapting hotel ownership structures, which had a
negative 11.0% impact on revenue for the period; - The expansion
strategy, which added 3.0% to revenue growth; - A negative 1.8%
currency effect resulting from the appreciation of the euro against
the dollar, the pound and most South American currencies; - The
solid 4.8% first-quarter growth at constant scope of consolidation
and exchange rates and 5.8% growth adjusted for the impact of the
shift in the Easter vacation. Services revenue up 10.4%
like-for-like Revenue from the Services business increased by 9.5%
as reported and 10.4% like-for-like. Adjusted for the impact of the
loss of a Ticket Services contract in Belgium and the gradual
elimination of tax breaks in Argentina, Services revenue was up
12.6% for the quarter. Acquisitions added 4.5% to growth. However,
the currency effect was a negative 2.3%, mainly due to the weakness
of Latin American currencies. In Europe, revenue rose by 9.5%
like-for-like. Revenue gained 14.2% like-for-like in France,
following the deployment of a special action plan to boost sales of
meal vouchers, and 13.3% like-for-like in the United Kingdom. In
Belgium, adjusted for the loss of the Onem contract, revenue was up
14.4% like-for-like, compared to a reported decline of 13.8%. In
Latin America, like-for-like growth totaled 10.6%. After a period
of slow growth in 2007 (+0.4%), revenue in Brazil rose by 5.1%
while other countries in the region saw an increase of 16.9%
like-for-like. In Argentina, revenue was up 17.3% like-for-like.
Recent changes in the country's tax laws that call for a 10%
reduction in payroll tax breaks every two months began to have a
negative impact on revenue in March. Hotels revenue up 3.7%
like-for-like Hotels revenue amounted to EUR1,286 million in the
first quarter, a decline of 2.8% compared to the prior-year period
(as reported). This figure takes into account the impact of: - The
sale of the Red Roof Inn chain and other hotel properties as part
of the "asset-right" strategy of adapting hotel ownership
structures, which reduced growth by 6.7%; - The expansion strategy
(with 4,600 rooms opened during the period), which added 2.7% to
growth; - The currency effect, which was a negative 2.5%; - The
3.7% increase in hotels revenue at constant scope of consolidation
and exchange rates. The shift in the Easter vacation calendar to
March in 2008 from April in 2007 in most European countries (mainly
Germany, the United Kingdom, Spain and the Benelux countries) had a
negative 1.4% impact on revenue. Adjusted for the impact of the
shift in the Easter vacation, revenue was up 5.1% for the period,
reflecting a good start to 2008 in Europe. Upscale and Midscale
Hotels revenue up 3.9% like-for-like In upscale and midscale
hotels, revenue rose by 3.9% like-for-like in the first quarter
(5.7% when adjusted for the earlier Easter vacation). Business
remained strong in France, where revenue rose by 6.5%
like-for-like, led by a very good performance from the Novotel and
Mercure chains. Results in the upscale segment were more mixed due
to the brand repositioning of Sofitel and Pullman hotels. Germany
reported a 4.3% decline in revenue like-for-like. However, when
adjusted for the earlier Easter vacations, revenue was up 3.2%, in
line with 2007. The same trend was apparent in the United Kingdom,
where revenue rose by 5.8% excluding the vacation calendar effect,
versus 3.3% as reported. Economy Hotels (outside the US) revenue up
5.3% like-for-like Economy hotels revenue outside the United States
increased by 5.3% like-for-like (6.8% when adjusted for the earlier
Easter vacation). In France, the year got off to a very good start,
with Economy hotels revenue gaining 4.9% like-for-like on the back
of a strong performance at Ibis (a 6.8% increase in RevPAR). The
shift in the Easter vacation calendar also had a significant impact
in the major European countries. In Germany, revenue declined by
0.2% but increased by 5.6% when adjusted for the earlier vacation.
In the United Kingdom, revenue rose by 7.0% like-for-like and by
11.3% excluding the calendar effect. Economy Hotels revenue in the
United States up 0.1% like-for-like Like-for-like, Motel 6 revenue
rose by 0.1%, reflecting a more challenging economic environment in
the United States as well as higher gas prices, which adversely
impacted the chain's leisure customer base. The 36.4% first-quarter
decline in Economy hotels revenue in the United States as reported
was due to the sale of Red Roof Inn in August 2007, which trimmed
EUR60 million from revenue for the period, and the weaker dollar.
Significant transactions and events of the period Acquisition by
Accor Services of a 62% interest in Motivano UK, a leading online
employee benefits provider In January 2008, as part of its growth
strategy, Accor Services acquired a 62% stake in Motivano UK, a
leading online provider of employee benefit solutions. The shares
were purchased from the venture capital firm Geocapital Partners.
The current management team will retain an aggregate 38% interest.
The medium-sized transaction is expected to yield an ROCE of around
20% in 2010. Disposal of all of the Brazilian foodservices business
As part of its strategy of refocusing on its two core businesses,
Services and Hotels, Accor announced the sale of its remaining 50%
stake in the Brazilian foodservices business to Compass Group in
the first quarter. Compass had already acquired 50% of the business
from Accor in 1998. Financial position and results Changes in scope
of consolidation - Expansion In Services, acquisitions accounted
for 4.5% of revenue growth for the first three months, in line with
the Group's medium-term objectives. The expansion plan for the
hotels business provides for 200,000 new rooms to be opened between
2006 and 2010. In first-quarter 2008, expansion (including the
opening of 4,600 rooms during the period) added 2.7% to revenue
growth. - Disposals The Brazilian foodservices business was sold
for BRL 305 million (approximately EUR117 million). The business
contributed EUR248 million to 2007 consolidated revenue. Currency
effect The currency effect reduced revenue by 1.8%, or EUR34.3
million, for the period. As a sensitivity analysis, every 10-cent
decline in the dollar against the euro would have a EUR8 million
impact on operating profit before tax and non-recurring items.
Accor, the European leader and a major global group in hotels, as
well as the global leader in services to corporate clients and
public institutions, operates in nearly 100 countries with 150,000
employees. It offers to its clients over 40 years of expertise in
two core businesses: - Hotels, with the Sofitel, Pullman, Novotel,
Mercure, Suitehotel, Ibis, all seasons, Etap Hotel, Formule 1 and
Motel 6 brands, representing 4,000 hotels and nearly 500,000 rooms
in 90 countries, as well as strategically related activities, such
as Lenotre. - Services, with 30 million people in 40 countries
benefiting from Accor Services products in human resources,
marketing services and expense management. Revenue Quarter 1
Quarter 1 In EUR thousand 2007 2008 Change Change Adjusted Reported
L/L % (1) % (2) HOTELS Up & Midscale 742,364 761,765 2.6% 3.9%
Economy 364,770 387,196 6.1% 5.3% Economy US 215,940 137,255 -36.4%
0.1% TOTAL HOTELS 1,323,074 1,286,216 -2.8% 3.7% SERVICES 206,984
226,635 9.5% 10.4% Other Businesses Casinos 78,172 86,252 10.3%
6.1% Restaurants (3) 151,766 100,937 -33.5% 8.7% On-board train
services 59,704 69,461 16.3% 8.5% Holding & Other (4) 67,737
21,919 -67.6% -4.3% TOTAL OTHER BUSINESSES 357,380 278,569 -22.1%
5.6% TOTAL 1,887,437 1,791,420 -5.1% 4.8% (1) After transfer of
Asian Timeshare activities from Up & Midscale Hotels to
Holdings & Other (2) At constant scope of consolidation and
exchange rates (3) Of which Italian Foodservices (3) Of which Go
Voyages and Scapa Italia RevPAR by segment HOTELS : RevPAR by
segment Occupancy Rate Average room rate at at March 2008 (YTD)
Subsidiaries (reported) Subsidiaries (in %) (chg in pts) (reported)
(chg in %) Upscale and Midscale Europe (in EUR) 59.5% -0.4 105
+3.0% Economy Europe (in EUR) 66.3% -0.4 56 +3.7% Economy US (in $)
(2) 61.9% -1.4 44 +1.2% table continued HOTELS : RevPAR by segment
RevPAR at at March 2008 (YTD) Subsidiaries Subsidiaries
Subsidiaries (reported) & managed (chg in %)(like-for-like(1))
(reported) Upscale and Midscale Europe (in EUR) 63 +2.3% +2.7%
+0.6% Economy Europe (in EUR) 37 +3.1% +3.6% +3.0% Economy US (in
$) (2) 27 -1.0% -1.3% -1.0% (1) at comparable scope of
consolidation and exchange rates. RevPAR by country UPSCALE AND
MIDSCALE HOTELS RevPAR by country at Number Occupancy Average room
March 2008 (YTD) of Rate rate rooms Subsidiaries Subsidiaries
(reported) (reported) (in local currency) (in %) (chg in pts) (chg
in %) France 29,019 60.8% +2.0 115 +5.1% Germany 20,376 57.8% -3.4
94 +3.2% Netherlands 4,118 57.5% -2.4 113 +0.9% Belgium 1,802 63.4%
+2.1 111 +4.1% Spain 2,259 57.9% -2.6 109 +4.0% Italy 3,190 52.1%
-2.8 107 -0.8% UK ( in GBP) 5,234 73.7% -0.6 88 +4.3% USA (in $)
480 93.2% +6.8 203 +10.7% Table continued UPSCALE AND MIDSCALE
HOTELS RevPAR RevPAR by country at Subsidiaries Subsidiaries
Subsidiaries & March 2008 (YTD) (reported) managed (in local
currency) (chg in %) (like-for-like(1)) (reported) France 70 +8.8%
+7.4% +5.4% Germany 54 -2.6% -3.2% -2.5% Netherlands 65 -3.1% -1.8%
-3.1% Belgium 71 +7.7% +0.9% +6.8% Spain 63 -0.4% -0.4% -0.4% Italy
56 -5.8% -3.7% -5.8% UK ( in GBP) 65 +3.5% +2.0% -4.0% USA (in $)
189 +19.4% +5.2% +6.2% (1) at comparable scope of consolidation and
excahange rates ECONOMY HOTELS Number Occupancy Rate Average room
rate of RevPAR by country rooms Subsidiaries (reported)
Subsidiaries (reported) at March 2008 (in %) (chg in pts) (chg in
%) (YTD) (in local currency) France 43,729 66.9% +0.2 50 +5.1%
Germany 15,129 63.4% -2.6 59 +3.4% Netherlands 2,150 67.9% -4.4 77
+8.4% Belgium 2,560 69.2% +2.3 69 +5.0% Spain 4,323 69.4% -2.7 57
+5.9% Italy 1,536 52.0% -0.6 80 +4.5% UK ( in GBP) 7,616 71.4% -0.2
55 +5.6% USA (in $) (2) 80,039 61.9% -1.4 44 +1.2% Table Continued
ECONOMY HOTELS RevPAR RevPAR by country at Subsidiaries
Subsidiaries Subsidiaries & March 2008 (YTD) (reported) managed
(in local currency) (chg in %) (like-for-like(1)) (reported) France
33 +5.4% +4.1% +5.5% Germany 38 -0.7% -0.5% -1.3% Netherlands 52
+1.8% -0.1% +1.8% Belgium 48 +8.5% +7.6% +8.5% Spain 39 +1.9% +0.4%
+1.9% Italy 42 +3.3% +6.1% +3.3% UK ( in GBP) 39 +5.3% +5.6% +5.5%
USA (in $) (2) 27 -1.0% -1.3% -1.0% (1) at comparable scope of
consolidation and excahange rates. (2) Excluding Red Roof Inn
DATASOURCE: Accor CONTACT: MEDIA CONTACTS: Emmanuelle Baumgartner,
Senior Vice President, Media Relations Department, Phone:
+33-1-45-38-84-77; Alain Delrieu, Senior Media Relations Officer,
Phone: +33-1-45-38-84-85. INVESTOR RELATIONS: Eliane
Rouyer-Chevalier, Senior Vice President, Investor Relations and
Financial Communication, Phone: +33-1-45-38-86-26; Solene Zammito,
Deputy Director, Investor Relations, Phone: +33-1-45-38-86-33.
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