2012 Q3 Revenue: Up 1.3% 1 at ?1,485m despite unfavorable bases of comparison
?510-530 million FY 2012 EBIT target confirmed
- Solid third-quarter business levels: revenue up 1.0% as reported and 1.3% like-forlike, despite unfavorable calendar effects in several key European markets.
- Nine-month revenue up 0.3% as reported and 2.8% like-for-like.
- Management and franchise fees up 12.9% in the third quarter, thanks to the fast development, with 26,400 rooms added over the first nine months of the year, 87% of
- which under management and franchise contracts.
- 2012 targets confirmed, with EBIT of ?510 million to ?530 million and a more than 35,000-unit increase in the room base
First nine-months 2012 revenue up 2.8% like-for-like and 0.3% as reported
Revenue for the first nine months of 2012 amounted to ?4,202 million, shaped by the following factors:
- Development, which added ?83 million or 2.0% to reported growth, led by the opening of 189 hotels representing nearly 26,400 rooms over the period.
- Changes in the scope of consolidation, which reduced reported growth by ?233 million or 5.6%, primarily as a result of the asset disposal strategy and the ?76 million impact of the Len?tre sale.
- The positive ?44 million currency effect, which added 1.1% to reported growth, mainly due to
gains in the Australian dollar and British pound against the euro.
At constant scope of consolidation and exchange rates, revenue rose by 2.8% like-for-like over the first nine months, lifted by the firm improvement in average room rates in every segment.
Third-quarter revenue up 1.3% like-for-like and 1% as reported
Third-quarter 2012 revenue amounted to ?1,485 million, reflecting the following factors:
- The growth in RevPAR, led by the improvement in average room rates across every segment and the sharp increase in management and franchise fees. This performance was delivered in a mixed environment.
- Development, which added ?46 million or 3.1% to reported growth. This reflected the opening of 48 hotels representing more than 5,600 rooms during the quarter, as well as the consolidation of Mirvac over the entire quarter after its acquisition closed on May 22.
- Changes in the scope of consolidation, which reduced reported revenue by ?73 million or 5.0%. Of this, ?47 million was related to the asset management program and ?21 million corresponded to the Len?tre disposal.
- The positive currency effect, which increased reported revenue by ?23 million or 1.6%, primarily as a result of gains in the Australian dollar and the British pound against the euro.
At constant scope of consolidation and exchange rates, the like-for-like increase was 1.3% for the quarter.
- Upscale & Midscale Hotels: third-quarter revenue up 1.6% like-for-like to ?914 million
Revenue in the Upscale & Midscale segment rose by 0.8% as reported and by 1.6% like-for-like in the third quarter, as the improvement in average room rates offset a slight decrease in occupancy rates in several markets. At the same time, conditions continued to worsen in Southern Europe. On the upside, the Group is still benefiting from a buoyant environment outside Europe, with revenue gains of 4.1% in the Asia Pacific region and 8.5% in Latin America.
- Economy Hotels: third-quarter revenue up 0.5% like-for-like to ?524 million
In a mixed environment in Europe, where a majority of countries saw a slight slowdown in demand, revenue in the Economy segment demonstrated firm resistance, rising by 1.6% as reported and 0.5% like-for-like. Business remained strong in the leading European cities, supporting an efficient pricing policy. Revenue growth was led by strong performances in the Asia-Pacific region, up 2.3%, and Latin America, up 11.3%.
- Sustained growth in management and franchise fees
As a result of the Group?s robust development dynamic and the evolution of its business model, management?and franchise fees rose by 12.9% to ?125 million in the third quarter, reflecting gains of 10.6% in the Upscale & Midscale segment and of 20.5% in Economy Hotels. In the first nine months of the year, Accor added 26,400 rooms to the network (excluding Motel 6), of which 87% under asset-light structures.
- Geographic focus
In France, the third quarter like-for-like revenue decreased by 2.4% in the Upscale & Midscale segment and was down 1.7% in the Economy segment. This slight decline was primarily due to the fact that the Cardiology Congress was held in Paris in August 2011, causing a nearly 15% increase in local RevPAR (down 11% in August 2012). Paris recorded solid performances in July and September and continues to fare better than the rest of France, where results were more mixed. Unlike in the third quarter, the end of the year will benefit from more favorable comparatives and from the Paris Motor Show, which derived preliminary positive impacts.
Germany remains the most performing market in Europe. Thanks to a favorable trade show calendar, thirdquarter revenue was up 4.1% like-for-like in the Upscale & Midscale segment and 3.6% like-for-like in the?Economy segment. High-yield trade show guests helped to drive a significant improvement in average room rates (in particular, a 9.0% increase in the Upscale & Midscale segment).
In the United Kingdom, third quarter like-for-like revenue growth stood at 4.9% in the Upscale & Midscale?segment and 6.0% in the Economy segment. With its extensive presence in London, the Group benefited?highly from the Olympic and Paralympic Games, with in particular 100% occupancy rates during the former. This performance was partially offset, however, by the closure before and after the Games of several major?convention centers, notably the ExCel international exhibition center.
Business outside Europe remained robust. Revenue in the Asia-Pacific region rose by 4.1% in the Upscale & Midscale segment and by 2.3% in Economy Hotels, with demand still growing very quickly in all of the region?s leading markets except China. In Latin America, revenue was up 8.5% in the Upscale & Midscale segment and 11.3% in Economy. In Brazil, the strong growth in demand, at a time when the hotel supply remained stable, drove a sharp increase in average room rates in both the Upscale & Midscale and the Economy?segments.
Outlook for 2012: Targets confirmed
In an economic environment which is difficult in Europe and still robust in Asia Pacific and Latin America, Accor continued to expand and remains reasonably optimistic about the end of the year. At the same time, the Group is pursuing a sustained development strategy, opening 26,400 rooms during the first nine months of the year, of which over 5,600 in the third quarter, as well as the transformation of its business model.4
In that context and in light of the following factors:
- Sustained robust demand in the fourth quarter, which will be supported by several positive events in key European markets (the Paris Motor Show, an upturn in convention activity in London and a still favorable trade show calendar in Germany) and by dynamic growth in International markets;
- A targeted revenue to EBITDAR flow-through ratio confirmed at 50% in markets where revenue is increasing and a 40% reactivity ratio in markets where it is contracting;
Accor confirms its 2012 full-year EBIT target of ?510-530 million.