PARIS, February 24, 2010 /PRNewswire-FirstCall/ -- 2009 Operating
Profit Before Tax(1) of EUR448 Million, at the Upper End of the
EUR400-450 Million Target Dividend of EUR1.05 per share recommended
at the June 29, 2010 Annual Meeting Prepaid Services: resilient
EBITDAR margin despite a difficult economic and business
environment Hotels: limited decline in EBITDAR margin thanks to
greater than expected cost-savings - Operating profit before tax
and non-recurring items: EUR448 million, at the upper end of the
announced EUR400-450 million target, despite the EUR39 million
negative impact from the devaluation of the Venezuelan bolivar -
Limited 1.5 point decline in EBITDAR margin to 28.0% - Net loss of
EUR282 million due to the impact of impairment losses and
restructuring costs totaling EUR514 million - Solid financial
position, with a funds from operations/adjusted net debt ratio of
20.0%(2); EUR2.5 billion in unused confirmed lines of credit 2009
Results (in EUR millions) 2008(4) 2009 Change Change (reported)
(like-for-like)(3) Revenue 7,722 7,065 - 8.5% - 7.9% EBITDAR 2,290
1,976 - 13.7% - 12.5% EBITDAR margin 29.7% 28.0% -1.7 pts -1.5 pts
Operating profit before tax 875 448 - 48.9% - 38.0% and
non-recurring items Operating profit before 603 328 - 45.6% n/a
non-recurring items, net of tax Net loss, Group share 575 (282) n/a
n/a 1: Operating profit before tax and non-recurring items 2:
Adjusted funds from operations to adjusted net debt is calculated
with net debt adjusted for the 8% discounting of future minimum
lease payments. 3: Excluding changes in scope of consolidation and
exchange rates 4: Impact of the retrospective application of IFRIC
13 - Customer Loyalty Programs from January 1, 2008 - Operating
profit before tax and non-recurring items of EUR448 millions
Consolidated revenue totaled EUR7,065 million in 2009, representing
a decline of 7.9% at comparable scope of consolidation and exchange
rates (like-for-like) and of 8.5% as reported. Reported revenue was
adversely impacted by a difficult economic environment as well as
by asset disposals (which reduced growth by 3.5%) and the negative
1.4% currency effect. - The slight 1.4% like-for-like increase in
Prepaid Services revenue (down 3.6% as reported), including
operating revenue rise of 3.9% like-for-like reflected its strong,
sustainable growth fundamentals, in spite of the year's
exceptionally severe global crisis. Financial revenue was down
15.0% like-for-like by the fall in interest rates. - Hotels revenue
contracted by 10.1% like-for-like and 9.8% on a reported basis,
highlighting the greater resilience of the Economy segment in
Europe and reflecting a slight upturn in business at year- end. In
all, revenue declined by 6.1% in the Economy segment, 11.5% in
Upscale and Midscale hotels, and 13.8% in the US Economy segment,
which has yet to show any signs of a recovery. Consolidated EBITDAR
amounted to EUR1,976 million, for an EBITDAR margin of 28.0%, down
1.7 points as reported and 1.5 points like-for-like compared with
2008. - Prepaid Services showed a limited 0.3 point like-for-like
decline in EBITDAR margin to 41.8%, confirming its resilience
despite rising unemployment and falling interest rates. Adjusted
for financial revenue, EBITDAR margin rose by 1.2 points
like-for-like. EBITDAR margin on issue volume amounted to 3.2% in
Europe and 3.3% in Latin America. - EBITDAR margin in the Hotels
business contracted by 2.6 points like-for-like to 29.1%.
Like-for-like margin declines were limited in Upscale and Midscale
hotels (down 2.5 points, of which 4.1 points in the first half and
1.0 point in the second) and in the Economy segment (down 1.7
points, of which 2.3 points in the first half and 1.1 point in the
second) thanks to the deployment of significant cost-cutting plans
during the year, which reduced operating costs by EUR165 million,
versus a target of EUR150 million, and support costs by EUR87
million, versus a target of EUR80 million. Response ratios stood at
53.3% in the Upscale and Midscale segment and 37% in the Economy
segment. EBITDAR margin in the US Economy Hotels business continued
to decline, losing 6.6 points like-for-like during the year in a
still deeply unfavorable economy. Operating profit before tax and
non-recurring items amounted to EUR448 million for the year, at the
upper end of the target announced in August 2009, despite the EUR39
million negative impact from the devaluation of the Venezuelan
bolivar. This represented a 38.0% decline like for-like, of which
44.5% in the first half and 32.7% in the second. - A loss for the
year, heavily impacted by impairment losses and restructuring costs
The net loss, Group share came to EUR282 million for the year,
reflecting the following factors: - EUR387 million in impairment
losses, of which write-downs of EUR113 million on Motel 6 goodwill
and EUR100 million on Kadeos Intangible assets. - EUR127 million in
restructuring costs. The loss per share stood at EUR1.27, compared
with earnings of EUR2.60 per share in 2008, based on the weighted
average 223 million shares outstanding during the year. Before
taking into account the above-mentioned non-recurring items,
operating profit before non-recurring items, net of tax amounted to
EUR328 million, versus EUR603 million in 2008. Operating profit
before non-recurring items, net of tax per share came to EUR1.47,
down 46% from 2008. At the Annual Meeting on June 29, 2010,
shareholders will be asked to approve the payment of a dividend of
EUR1.05 per share, compared with EUR1.65 the year before. This
would represent a payout of more than 70% of 2009 operating profit
before tax and non-recurring items. - A solid financial position
Net debt stood at EUR1,624 million at December 31, 2009. Cash
outflows for the year included two non-recurring items: the
acquisition of an additional 15% interest in Groupe Lucien Barriere
for EUR271 million and the payment of EUR242 million to the French
State in settlement of tax assessments on Compagnie Internationale
des Wagons Lits. Adjusted for these two items, cash flow for the
year would have been break-even. Recurring cash flow items include:
- EUR327 million in renovation and maintenance expenditure, in line
with objectives and down EUR161 million from 2008 thanks to
disciplined capital expenditure management. - EUR495 million in
expansion expenditure (excluding the Groupe Lucien Barriere put),
representing a decline of EUR596 million Over the year compared to
2008. - EUR363 million in proceeds from disposals of assets,
primarily stemming from sustained implementation of the Group
asset- right strategy (216 hotels were sold in 2009 for EUR290
million), despite the particularly unfavorable real estate market
during the year. - EUR396 million in dividends paid in 2009. As of
December 31, 2009, Accor had EUR2.5 billion in unused, confirmed
lines of credit and no major refinancing needs before 2012. The
main financial ratios attest to the solidity of the Group's
financial position. Gearing stood at 50% at December 31, 2009,
while the ratio of funds from operations before non-recurring items
to adjusted net debt[1] came to 20.0%. Return on capital employed
(ROCE)[2] amounted to 10.5% at December 31, 2009, versus 14.1% a
year earlier. [1] Funds from operations before non-recurring items
corresponds to cash flow from operating activities before
non-recurring items and changes in working capital requirement. The
ratio of funds from operations before non-recurring items to
adjusted net debt is calculated according to a method used by the
main rating agencies, with net debt adjusted for the 8% discounting
of future minimum lease payments and funds from operations adjusted
for interest expense on these payments. [2] Corresponding to EBITDA
expressed as a percentage of fixed assets at cost plus working
capital Sustained deployment of the asset-right strategy in a
depressed real estate market A total of 216 hotels were
restructured in 2009, leading to a EUR360 million reduction in
adjusted net debt over the year. In particular, 157 hotelF1
properties representing 12,174 rooms were sold and leased back in
the second half, a major transaction that enabled Accor to reduce
its adjusted net debt by EUR214 million in 2009. As of December 31,
2009, 60% of the rooms in the hotel base were held under
variable-rent leases, management contracts or franchise agreements.
In February 2010, the Group announced the further sale of five
hotels, comprising more than 1,100 rooms in four European
countries. Undertaken with the Invesco Real Estate hotel investment
fund, the transaction covered the sale and variable leaseback of
two Novotel and two Mercure units and the sale and management-back
of one Pullman property. The EUR154 million disposal will have a
EUR93 million impact on adjusted net debt in 2010. A dynamic hotel
expansion drive, aligned with new market realities To optimize
earnings, Accor is focusing its expansion capital expenditure on
the Economy Hotels outside the US segment and emphasizing
asset-light operating structures in the Upscale and Midscale
segment. Of the more than 27,300 new rooms opened in 2009, for
example, more than 80% were in the Economy and Midscale segments
and 81% concerned asset-light ownership structures based on
variable-rent leases, management contracts or franchise agreements.
Most of the rooms were opened in high potential regions, such as
Asia (35%) and Europe (32%). As of December 31, 2009, there were
around 103,000 rooms in the pipeline, of which half were in the
Economy or Budget segments and more than 85% were held under
asset-light structures. 2010 trends and outlook - Hotels With the
exception of Economy Hotels in the US, occupancy rates continued to
stabilize in January 2010, in line with the December 2009 trend. In
the Upscale and Midscale segment in Europe, occupancy rate rose 0.3
points over the month, compared with an increase of 0.4 points in
December and a decline of 2.8 points in November. In Economy Hotels
in Europe, the rate was down 2.2 points in January, versus declines
of 1.6 points in December and 5.2 points in November. Average room
rates generally stabilize three to nine months after occupancy
rates. - Prepaid Services The sustained rise in unemployment,
particularly in Europe, is expected to further impact growth in
operating revenue, notably in the first half. The environment
should be more favorable in emerging markets, where the increase in
people in work is expected to drive stronger revenue growth.
Financial revenue, on the other hand, will continue to be held back
by declining interest rates in the first half, before stabilizing
in the second half. Upcoming events - April 20: First-quarter
revenue - June 29: Extraordinary Shareholders' Meeting Accor, a
major global group and the European leader 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, MGallery,
Novotel, Mercure, Suitehotel, Adagio, ibis, all seasons, Etap
Hotel, Formule 1, hotelF1 and Motel 6 brands, representing 4,100
hotels and nearly 500,000 rooms in 90 countries, as well as
strategically related activities, Thalassa sea&spa, Lenotre,
CWL. - Services, with 33 million people in 40 countries benefiting
from Accor Services products in employee and constituent benefits,
rewards and incentives, and expense management. DATASOURCE: Accor
CONTACT: Media Contact: Armelle Volkringer, Senior vice president
corporate communications and external relations, Phone:
+33(0)1-45-38-87-52; Charlotte Bourgeois-Cleary, Phone:
+33-1-45-38-84-84; INVESTORS CONTACTS, Eliane Rouyer-Chevalier,
Senior Vice President Investor Relations and Financial
Communications, Phone: +33-1-45-38-86 26; Solene Zammito, Deputy
Director, Investor Relations, Phone : +33-1-45-38-86-33
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