A Solid First-Half 2012: Revenue Up 3.6% like-for-like

Sustained Growth in the Second Quarter Despite Negative Calendar Effect

(PresseBox) ( Evry Cedex, )
- First-half revenue up 3.6% like-for-like and down 0.1% as reported, of which a 3.1% like-for-like in the second quarter
- Good performance across all segments, led by steadily rising prices
- 20.1% increase in management and franchise fees over the semester
- Record expansion in the first-half, with the opening of 20,700 rooms (141 hotels), 85% of which under management and franchise contracts
- Motel 6 accounted for in Assets Held For Sale following its announced sale to Blackstone.

First-half 2012 revenue up 3.6% like-for-like to €2,717 million

Consolidated revenue for the six months ended June 30, 2012 amounted to €2,717 million, down 0.1% on a reported basis. It reflected the following factors:

An improvement in RevPAR led by the growth in prices across every segment and the sharp increase in Management and Franchise fees.

Expansion, which increased revenue by €37 million, adding 1.4% to reported growth. The expansion set a new record during the period, with the opening of 20,700 rooms[1] (141 hotels), 85% of which under management and franchise contracts.

Changes in the scope of consolidation, which reduced reported growth by 5.9% and revenue by €160 million, including notably the asset disposal strategy and €56 million from the sale of Lenôtre.

The currency effect, which at a positive €21 million added 0.8% to reported growth, primarily due to the gains in the Australian dollar and British pound against the euro.

Second-quarter 2012 revenue up 3.1% like-for-like to €1,475 million

Consolidated revenue for the second quarter of 2012 stood at €1,475 million, down 0.8% on a reported basis due to the combined impact of the following factors:

Growth in RevPAR, with prices rising in every segment.

Expansion, which added €26 million to revenue and 1.8% to reported growth. It was led both by the faster pace of room opening during the quarter, with a record 8,700 new rooms (56 hotels) on organic basis, plus the 5,400 rooms (43 hotels) added through the Mirvac acquisition.

Changes in the scope of consolidation, which reduced reported growth by 6.4% and revenue by €95 million, of which €31 million from the sale of Lenôtre.

The currency effect, which at a positive €11 million added 0.7% to reported growth, primarily due to the gains in the British pound and the Australian dollar against the euro.

Upscale and Midscale Hotels: second-quarter revenue up 3.5% like-for-like to €929 million

Revenue from the Upscale & Midscale segment rose 0.1% as reported and 3.5% like-for-like over the quarter. This solid performance was notably driven by the 19.7% increase in management and franchise fees. Emerging markets continued to deliver a very good performance, with growth of 7.9% in the Asia-Pacific region and 9.5% in Latin America. In Europe, demand remains strong, especially in key gateways even though the situation in Spain, Italy and Portugal still weighed on the regional performance. Sofitel reported the segment's best performance for the quarter.

Economy Hotels: second-quarter revenue up 2.8% like-for-like to €516 million

In the second quarter, revenue from Economy Hotels rose by 3.3% as reported and 2.8% like-for-like, lifted by generally rising prices and the 13.1% increase in management and franchise fees. Emerging markets remained extremely dynamic, with gains of 6.8% in the Asia-Pacific region and 14.6% in Latin America. The key European gateways turned in a good performance for the period.

Management and franchise fees

Thanks to the dynamic expansion strategy, management and franchise fee revenue rose by 20.1% to €233 million in the first half, with growth of 20.5% in the Upscale & Midscale segment and of 18.9% in Economy Hotels.

Revenue by key market

In France, the unfavorable impact of bank holidays in May and the lack of major events in June (such as the Paris Airshow and Vinexpo in Bordeaux) weighed heavily on quarterly performance. As a result, like-for-like revenue ended the period up 0.3% in the Upscale & Midscale segment and down 0.8% in Economy Hotels. Paris enjoyed a good performance and growth in RevPAR in every segment. Gains in the Upscale & Midscale segment were boosted in particular by the sharp increase in fee revenue from management and franchise.

In Germany, business was supported by a robust macroeconomic environment and stable demand, with like-for-like revenue growth standing at 4.5% in the Upscale & Midscale segment and 4.7% in the Economy segment. Prices improved substantially thanks to the favorable second-quarter trade fair calendar. In addition, successful application of the revenue management strategy in the Upscale & Midscale and of the dynamic pricing policy in Economy Hotels contributed to the global increase in RevPAR over the period.

Demand in the United Kingdom remains very strong. However, preparations for the London Olympic Games had a negative impact on the revenue of the Upscale & Midscale segment that was down 3.9% like-for-like with the renovation of some London hotels and the anticipated closure of the Excel Congress Center as well as the O2 Arena. On the other hand, revenue from Economy Hotels rose by 4.3% like-for-like, led by the combined impact of firm demand and sustained application of the dynamic pricing policy, which helped to optimize RevPAR. At the same time, the UK operations benefited from the growth in fee revenue thanks to their dynamic expansion strategy.

A solid first-half 2012

Despite very unfavorable comparatives in the second quarter, Accor delivered a solid performance in the first half of 2012, with revenue increasing 3.6% like-for-like over the period.

Growth was linked to business levels that remained very robust in emerging markets (the Asia-Pacific region, Latin America and Africa/Middle East). It was generally stable in Europe, with solid conditions in the key markets (excellent performance in the capitals) but still very challenging in the Southern countries. In addition, the growing part of management and franchise fees at revenue level is having a very positive impact, resulting from a continuous dynamic expansion plan.

Despite low visibility and the uncertain economic environment in some regions, the Group anticipates these ongoing trends to carry on through the summer season.

Quarterly Information - Significant Events of the Period


Accor turned in another record performance in room openings in first-half 2012, bringing on stream a total of 20,700 rooms in 141 hotels, of which:
- 85% were under management contracts or franchise agreements.
- 57% were in the Asia-Pacific region, 25% in Europe, 13% in Africa and the Middle East and 5% in Latin America.

The Group is pursuing its asset-light expansion strategy and the transformation of its business model.

Motel 6 disposal

On May 22, Accor announced the sale of Motel 6 to Blackstone for $1.9 billion. The transaction should be completed in the third quarter.

Bond issue

On June 11, Accor took advantage of favorable conditions in the credit markets to successfully issue €600 million in five-year, 2.875% bonds.

Transaction carried out since June 30, 2012

Acquisition in Latin America

On July 16, Accor announced the acquisition of the South American activities of Grupo Posadas. It includes a portfolio of 15 hotels (2,600 rooms) and a secured pipeline of 14 hotels (2,000 rooms) under management contracts. This operation consolidates Accor's leadership over this area, especially in Brazil.

Upcoming events

- August 29, 2012: 2012 interim results

[1] Including 5,400 rooms added by the Mirvac acquisition, which was completed last May 22.
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