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Hello and welcome to the Accor full year 2020 analyst call. My name is Molly and I'll be your coordinator for today's event. Please note that this call is being recorded and for the duration of the call, your lines will be on listen only. However, there will be an opportunity to ask questions. This can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any point, please press star zero and you will be connected to an operator. I would now like to hand the call over to your host, Sebastian Brisen, Chairman and CEO, to begin today's conference. Thank you.

Good morning, everyone. Thank you so much for connecting early in the day here in Paris. I've been saying to many of you for a number of years that the hospitality industry is is all about human capital. So before we start, I just want to share with you how sad, and it's probably not strong enough, how sad I am of Arne's passing earlier this month. He was a very rare individual who really put his heart and soul into achieving his vision. He was a fierce competitor of Accor. But the one thing I remember of him for sure is the kindness of his heart. You know, I had some privileged moment with Arnie, which I've never shared with anyone. When I started Accor seven years ago, I reached out to him. I did not know of him at all. And I've asked whether we can meet. So we did meet. a month after I jumped into the job in early September in Central Park for a couple hours, working alone in the park where he was teaching me everything about the industry. And the only thing I can say today to all of you and the colleagues of Marriott and to one of our colleagues, there is a profound sense of loss for me and for the industry. Now when we turn to The 2020 year is probably the worst that we've been navigating through since hospitality has been created in the 1960s. But I have to say, I am extremely proud of our core demonstrating resilience and adaptability. If you look at the first page in front of you, I think we've never seen... only 2% of the countries with no restriction, whether it is confinement or curfew. That being said, I am amazed and thankful of all the owners of Accor and all the 40 brands of ours that we do have in today's circumstances with frontiers being closed, with leisure market not existing. We, however, have 85% of our hotels today being open ready for business, and some of them fetching a 5%, a 10% occupancy. But yes, the light is on, and we are open. When you look at the 2020 GDP, it is, of course, very much correlated to our industry. And it is of no surprise but remarkable that the only country who's been fetching a positive GDP happened to be China. But what's so noticeable on this page is a likely rebound of the economies of France with a plus 6% expected of the UK with plus 4.2%. We have some bright days ahead of us when it comes to economy rebound, and we surely will benefit from it in a deep way. If you go to the page after, we're doing the exercise which you have on the left side here. You know the billion 459 travelers in 2019. We of course know it dropped to end up the year with 379, but I was doing the math. If you account for January and February months where most of the activity was still intact with the provider of China, that probably is a couple hundred million of travelers for the first two years not impacted of last year. So the drop is likely not 74%. The drop is likely to be close to 90% in international travel through the pandemic. But what you have on the right side is a word of caution. You see China, and we were so pleased, all of us being so strong in Chinese hospitality, to see that very early end of October of last year, China was mostly back to REF PAR numbers pre-pandemic. But we also saw that in only a matter of 40 days, with the province outside of Beijing, Hubei, that it dropped again with very few cases of COVID. They shut down a lot of actually 10 or 20 million people outside of Beijing, and the red part dropped immediately back to minus 40% level. However, I'm very impressed with the resilience of the U.S. hospitality industry, of course impacted like all of us, but less less so than Europe, fetching a minus 50% REFPR. And you see the blue line, which is 45% of our core happens to be in Europe. And it's tough. And it's tough, and it's still in a minus 80% range because of all the things you guys know, what's happening, whether it is in UK, in Europe, Central Europe and in Southern Europe. So it's going to get better, but you see the vast differences depending on where you sit in terms of geography exposure. The slide after, we said it, we repeated it over the last nine months that ACO will weather the storm. So we did. And we've been able to do it because of three pillars. The first which is the most extraordinary one because it is non-quantifiable, has to do with the people of Accor. You know we have over 300,000 colleagues working under Accor brand in 110 countries. You know that we've been furloughing 280,000 of them in the end of March. And we've put, therefore, an whole heartless fund together on making sure those being furloughed, those not having any subsidies, not having any paycheck, will be offered availability to hospital to care and nutrition. And we did spend $21 million with the benefit of 62,000 people, our core colleagues, to make sure that, I guess, the need they had would be fulfilled. But we did so as well for the owners. Many of our owners were looking for some help in many different categories from our core, and then Jonathan will talk to you a bit on working capital issues. The guests of our core, we have also to respond to them. We have to make sure that they are encouraged to book again, and so I guess we're going on full flexibility when it comes to cancellation policy. We, of course, looked at any sanitary protocol measures to make sure that, I guess, whatever all the hotels open of our core will have the most impeccable sanitary protocol and health safety measures to welcome every individual on this planet. So 92% of the hotels of our core today have the protocol being implemented and verified by third parties. And for our shareholders, many of you listening to me on the phone, of course we haven't forgotten about you. It was all the questions of preserving the JVT for this company. and making sure that whatever cash we have could be safeguarded, probably more cash, if we could, to be preserved and to be increased. Cost savings measures have been put together, and Jean-Jacques will talk to you about it. Simplifying the organization to make sure we have a greater flexibility, a greater agility within the bodies of this company. And, which is probably the most important, that making sure that you are prepared for the rebound. And so are we as of this very minute. If the rebound happens tomorrow morning, We are set to go, which is why 85% of the hotels are today open. And the team is eager and ready to welcome back a billion five international travelers and all the billions of domestic travelers. On the page after, when it comes to accelerating the plan, we didn't sleep for the last 10 months. We did not only do things when it comes to agility, flexibility, cost savings, sanitary protocol. We've done so much more. We've been lucky and or smart, you know the expression, by closing on a billion plus of Albis, which is Eastern Europe real estate portfolio being sold and cashed in by our core in early March of 2020. We've been getting the asset heaviness side of more than big, 400 million plus or minus away from our balance sheet, again, end of February 2020. We've been readapting the organization with three very key words, focus, simplify, and expand. And we're being as we have been for the last 50 years. Spirit of Congress is one of the biggest values of this company. You just cannot stay immobile even through a crisis. So that was the time to really put together alliances, partnership, going all the way to 100% ownership in the minority interest we had when it comes to the lifestyle segment, which you know well. I am a big, big believer that the lifestyle segment will account for probably more than 20% of all the offerings of hotels in this planet over the next 20 years. It is a big segment. It is what individuals want. They want something more unique with more foodie, local content. So we made a long bet and a big bet in creating Ennismore and putting within the Ennismore platform the brands we've been acquiring, securing over the few years, and we'll talk about it. in a minute, but it's a major acceleration and a statement of where ARCO should be positioning ourselves without forgetting, of course, on the legacy brand, and again, we'll touch upon it in a minute.

Jean-Jacques, it's to you. Thank you, Sébastien. Good morning, good morning, everybody. Thanks for being with us today for this result presentation. Let's move to page nine, which is the overview of the financial year highlights. Starting, in fact, with the business highlight, the figures. The figures reflect the magnitude of the COVID crisis we all faced. The RESPA was down 62% over the year. The net organic growth slowed down to 1.9%. And all of that translated into a revenue for the group decrease of 55% on a life-or-life basis to a 1.621%. revenue level. To cope with this situation, as mentioned by Sebastien, we obviously implemented swiftly drastic actions, and we saw a ramp-up of the benefits of those actions over the year. The EBDA ended up being a minus $391 million, and despite a tough Q4, and notably a tough Q4 because of Europe, we were able to decrease the sensitivity to respite to less than $19 million. I'll detail that in the next slide. As for cash, the recurring free cash flow was minus $727 million. And here again, we significantly reduced our monthly cash burn to $61 million per month. The last but not least, our key priority was to preserve a strong balance sheet to weather this crisis. So several actions were put in place that you can see on the table. I mean, the successful issuance of 500 million convertible bonds back end of last year. It was 6.5 times oversubscribed, which again translates here the investor sentiment towards Accor. And the renegotiation of the revolving credit facility, which in fact was negotiated in March 2020, but it was renegotiated in February 2021. And I am happy to report that we have no more testing before June 2022, but more importantly, that this was done with an unanimous backup from the bank, unanimous approval from the bank, and no additional strings, additional covenants, which translates again to confidence. And the last point is something that you probably saw in the press last week, which we disposed of 1.5% of stake in Wazoo for $239 million. Again, this was part of the asset light roadmap that we had presented to you at the end of 2019. Further simplify the balance sheet, crystallize value creation, and just to give a number on that given transaction, it means that we made 9X, nine times our initial investments. All of these translate into a strong liquidity position. including the Andron evolving credit facility, which is to the tune of €4 billion. So I move to giving you more detail on what we've been calling controlling the controllable and this operating leverage. The EBITDA sensitivity, which is the left part of the table, you see improving from a point that we had discussed back in March of €28 million. to 18 million in H2. And we talk of hundreds of millions, obviously, when you do the computation. If you move to the translation in cash, the cash burn was in March minus 150 million, was reduced, in fact, to 42 million in H2, with an H1 at 79 million. So quarter after quarter, months after months, The actions are paying off, and we have a reduction of the cash burn. It stems from being better at the EBITDA level. That's the EBITDA sensitivity we just commented, but it's also the control that we said we would put on recurring investment. We said we would reduce them by $60 million in April. We ended up the year reducing them by $100 million. So we put very stringent control in place. And then last but not least, there was also a focus over the year on working capital and making sure that we collect as well as we can in that tough environment. So that's on controlling the controllable and this operating gearing. If you move to the classical chart on how the RESPA has been faring in the values geography, which is the page 11, After an encouraging rebound in Q3, Q4 was very much affected by the restriction in Europe and notably to cope with all the COVID variants. Overall, Q4 RESPAR decreased by 66% and the financial year ended up at minus 62%. Now, if you exclude Europe, the positive way of looking at it is that RESPAR is sequentially improving quarter after quarter since the Q2 trough in each of the other geographies. Moving to Asia-Pacific, in Asia-Pacific, the REF PAR ended up at minus 55%. Greater China, the pandemic epicenter, recovered swiftly, and we even had a point in December at minus 12% REF PAR. So it demonstrates once more, if needed to be, that when things come back, they come back fast and strong, but the containment is fragile, and Sébastien covered that in his speech. In Asia Pacific, Worth is also quoting Australia, where the summer recovery followed the same pattern as the one we experienced in Q3 in Europe. The RESPAR was a negative minus 53%, and leisure travel notably benefited to the Mantra summer destination on the Gold Coast. So we had a good season here in Australia. If you move to Australia, to Europe, sorry, REFPA was down 63% in financial year 2020. That's a 16% point degradation in Q4 versus Q3 and the translation of the very strict lockdown that were put in place both in Germany and the U.K. early November and are in fact still in place as of today. In Germany, the REFPA dropped by 65% and in the U.K. it dropped by 73%. As for France, we end up with a slightly better number at minus 6%. 58%. We had that very strong rebound in Q3 following the lockdown release in June. And we find, in fact, over Q4, the same pattern as the one that we had experienced before, i.e. Paris is suffering more than the province, as Paris is impacted by the lack of foreign tourism, but also a more limited domestic demand towards Paris. As for the rest of the world, North America reports a respite which is falling by 74%. Here, it translates the fact that we have a portfolio which is very much exposed to mice, to exhibition, to incentive kind of fairs. And in South America and Middle East, the rest bar was down about 60%. And again, some progression month after month. I think the one point I'd like to quote, which is to some extent a detail that explains how people think about traveling and our industry, is that in UAE, so in Dubai, There was a border reopening, and then the month of December was extraordinary. So when things can reopen, you know, people go swiftly into the business opportunity, sorry, into traveling, and Hans creates for us nice business opportunity. Just have to be firmed up. So that's for RevPower. I'm moving now to the other key driver in our business, which is the network and the system growth. So, and then one slide, 12. Our node system growth was 1.9% over the last 12 months. It is a little bit below what we had expected, which was between 2 to 3, but still not a bad number. We opened 29,000 rooms over the year, with a strong Q4 at 10,000 rooms. The openings were mainly impacted by postponement, whereas project cancellation, that we monitor very closely, were really marginal. In fact, 40% of the project got postponed to further periods. Over the last years, you may recall that Asia-Pacific has been the locomotive driving our system growth. With what happened this year, this is even more true, as China rebounded more vigorously than any other geography in the world. Asia-Pacific constitutes 60% of the opening of 2020, and WESU itself delivered 10,000 rooms in financial year 20, the same amount as last year, and that's about 35% of the total of the opening for the group. A pipeline, good flow of signings. And in fact, we end up with a pipeline of 212,000 rooms, which is above the number of last year at 208 rooms. So that's also good. One KPI that we've been monitoring very closely is churn. And I am happy to report that we are very much in line with historical trend at above 2%. So 2% is about the number that we've been seeing over the last three years. It's a point that we monitor very closely because the market has a sense that bankruptcy could increase with the lowering of the subsidies coming from government. But today, the reality is we don't see that at all happening. So a very important point for development going forward. Last but not least, conversion. So they accounted for about 40% of the opening in financial year 2020. This is a number which is very much consistent with our historical level, and we think that those conversions will remain a gross driver in financial year 2021. It can be a little bit lumpy, but it will be a gross driver. If you move to the next slide, which described how the revenue has been by segment, hotel service, hotel asset, new businesses. So overall, Accor revenue is $1.6 billion, minus 55%. The reported variance is 60%, which is essentially explained by the Moventic portfolio sale at the beginning of 2020. If you look at hotel services, the revenue is down 60%. The RESPAR is minus 62%, so not much of a delta here. Looking at the subsegment, MNF drops by 71%, and I will tell to you why in the next page. And the services to honor is down 53%, and it is a smaller decrease as the reimbursed part of the costs which are incurred on behalf of the owner, the salary of the people in the hotels, do not decrease like RESPAR. As for hotel assets, revenue was down 46%. This was on the back of a 61% decline. And we see here one point I mentioned before, which is the resilience of the mantra activity, which really benefited from a good Q4 in the gold and the sunshine costs. As for new businesses, revenue is down 43%. You know, logically, the travel-related activities that are part of the new businesses, such as private rental, are more affected than the ones which are less travel-related, like the digital services like the Edge. I'm moving now to focus on the M&S revenue portion of our hotel service business, and I am on slide 14. Overall, so this M&S... Revenue is down 71% on the back of RF bar of minus 62%. Distortion here is no surprise. It comes from the impact of the incentives that we've got in management contract. So it used to be to the tune of 35% of our M&F fees, and it will end up at the end of 2020 being 15% of the M&F revenue. On a positive note, by the way, The improvement of the activity and notably the quarantine business that we've got in Asia Pacific, in places like Singapore notably, allowed us to recognize more incentives in H2 than in H1. So the 15% that I told you is much more in H2 than in H1, which is positive. Then that distortion that you've got between REFPA and revenue coming from the incentive, you will find across all regions, which is what this table tells you. So if we move now to the EBITDA, the profit of the group, you see here the overall 391 being split by segments. As for hotel services, the EBITDA is a minus 257 million, and it's driven essentially by sales, marketing, distribution, and loyalty. I once could answer the explanation on that in the H1 call. But essentially, the SMDL costs, which are typically aligned with the SMDL fees taxed to the owner with the COVID crisis, don't align, and you don't have the same flexibility, the same flexing of those costs with the fees. And that's why you've got that loss. The reimbursement costs, i.e. the staff costs incurred on behalf of the owner, remain true pass-through, as they should be. Regarding new businesses, EBITDA loss at minus 25 million, essentially the business-related activities, no surprise here. And as far as hotel asset, a good result with an EBITDA which is a positive 3 million. That I'll detail on the next slide. So moving to that slide, which is slide 16, you have here a kind of focus on the hotel asset and other activity. So the asset-led transformation of our business changed the geography geographical exposure and nature of that segment. It's essentially today driven by Australia for two-thirds of the revenue, and it is mainly the mantra businesses. You've got some residual in Europe with some viable leases in Turkey, and also for the current year, the remainder of the move-in peak leases that we saw at the beginning of the year, so that will go away next year. And in South America, like for many years, we've got the variable leases on EBITDA. Why is the EBITDA a positive phenomenon? I think we had very good seasons in Australia, both at the beginning of the year and at the end of the year. So essentially benefiting of good times at a time where the COVID was not hurting the worst. Then there were very strong support put in place in Australia for the employers, and there is a program called JobKeeper, and they've got a great job, in fact, at basically covering for the cost of the employees, and we benefited from that full blast. And last but not least, we also went through significant headcount reduction, and this is extremely true in Brazil. And so that's why, in fact, the EBDA ends up being a slightly positive number. I'm moving now to below the EBITDA line and making the bridge between the EBITDA and the net profit. So we record over the year a net loss close to 2 billion, 1,998 million, 1,988 million euro. There are two main drivers. The first one is the share of net losses of associate and joint venture. And this is really the contribution of what we've got in AccorInvest, the 30% that we've got of AccorInvest, which shows up in that line. On AccorInvest, I'm very happy to report that an agreement was formed between the banks, the shareholders, and the French government. All of that should become public in the next days. We said we would act as a rational equity investor In line with this principle, we will participate to a capital increase for an amount in line with our 30% stake. And subject, obviously, to the extraordinary General Assembly of early March, our participation will end up being 154 million euros. So there is a good deal that has been found between all parties to move ahead. On the non-recurring item, Again, no big surprise. I mean, you recall we booked $1 billion at the end of H-120 for impairment of assets, so that's what makes up most of that line. On top of that, in H-2, we booked two other entries, one on a restructuring charge for $168 million, and that's for the reset project that I'll detail later on. It's a restructuring charge for the cost of the severance. And then, on the positive side, you may recall we had received a one-off tax cash refund in July that we had mentioned, and so we recognized the P&L effect of that cash received in July in our account at Yaran, and that's to the tune of $200 million. As for financial expenses, the cost of debt is unchanged. The increase is related to non-cash items, as you will see on the next slide. Just to close the presentation on the net profit, you see the discontinued operation, significant gain of $257 million. And this gain is coming from the Orbit sale that we completed at the beginning of 2020. So we're done now with net income. So moving to the cash part of the presentation. So making the bridge between the EBITDA, the recurring free cash flow, and the net debt. So the recurring free cash flow is minus 727. That equates to a cash burn of 61 million per month. So 727 divided by 12 is minus 61. Two main drivers here that you can see on the table. First off, a large working capital deterioration of 260 million. You may recall we already added at the end of H1 to the tune of 180 million, and this is explained by fee collection deferral. The other element to understand that working capital change is that some of the savings that we put in place are in the EBITDA, but will only translate into cash in 2021, and so you've got also an element here of the working capital change, and this is notably true for for payroll, social charges, these kind of elements. The recurring investment is the second element to highlight, and I had mentioned that we were much better than the target that we had assigned to ourselves. So we had a $200 million normalized level. We assigned a target of $60, i.e. our target was $140, and we end up at the end with $100, i.e. $100 million better than the $200 million initial amount. So for financial year 2021, we will target to be back to a level in between $150 to $200 million, and that we will adjust depending on how the business is coming back. So that's on the recurring free cash flow. You see also on that table that the net debt is behaving well, as it is stable at $1.3 billion. And so there were significant cash inflow, the proceeds from Orbis, the tax cash went off, And there were some outflows, notably the $700 million recurring free cash flow, and also the share buyback that we had done back in Q1, and last but not least, the SBE transaction for $300 million. So that's why the net debt is flat, but with big pluses and big minuses. Based on the above, the Board of Directors decided to propose not to pay a dividend at the next annual shareholder meeting, which will be held at the end of April. One summary slide on the balance sheet, which is the page 19. Two things here. You see first on the debt profile that now that we've reimbursed the beginning of the month of February, the 550 million bond for which we raised the convertible in November 2020, we don't have any significant maturity before 2023. So that's a good thing. And on the liquidity, you can see that we ended the year with 4.2 billion of liquidity, and that includes the RCF. And this is, in fact, a better number than the one that we finished 2019 with, as we did strengthen our balance sheet with an additional 600 million of RCF back in May. So a good, good position here. Last but not least, I'd like to spend a few, say some words on RESET. So when we said the key message is we have our plan, exactly where we told you we wanted to be. It has been a lot of work for the organization as it is a significant rethinking of the way we do things. We had identified back in H1 some levers and like to try to give you some light on how we do it. I mean, we talked about simplification, you know, essentially to give you an explanation of what we did. we removed two regional headquarters. So there is no more European headquarters, there is no more Asia Pacific headquarters with all the costs that go with it. So that was one explanation or one element of illustration for simplification. We talked about streamlining. We have reduced, at the end of the plan, the headcounts by 25%. We talked about automation and systems. We are right now in the process of decommissioning 20% of our IT systems. We talked about frugality. We are renegotiating all our contractors and we will reduce the contractor spanning again by 25%. So these are kind of illustration of how we go and move that program ahead. And with that, the parameters that were provided back in August are exactly there. It's a 200 million recurring cost saving plan. It is less than two years of payback. And, in fact, you've got an illustration of how the savings will show up in our financials. You've got two-thirds of the savings, i.e., 135 million, that will be implemented by the end of 2021. And so if you do 135 at year-end, you started with close to zero. That means that you will have somewhere around 70 million of EBITDA gain in 2021 coming from that plan. and then you'll continue in 2022 to reach the 200 million. A couple more points, which I think will be of interest for many of you on the call. 50% of the savings are staff, 50% are non-staff, and 60% of the savings are related to sales, marketing, distribution, and loyalty. And last but not least, the implementation cost is 300 million, of which we booked 168, as I was mentioning before, in the account of 2020. That's for the financial highlight and presentation, and with that, I'll leave the floor back to Sébastien.