Accor Sa

Thank you for being connected with us. Jean-Jacques Morin is on my right. And we're going to be spending the next 90 minutes until 10 o'clock Paris time on announcing and sharing with you great results for 2022. Extremely solid. Very happy to go through it. Happy probably, and I'll do it now, to tell you that, yes, we are enjoying a nice month of January in terms of activities and likely looking forward for 2023, which is going to be an even better year of 2022. So I'm going to start with the first slide, which is a bit 20,000 feet altitude. I want to show you in between the kind of bearish environment, which was the case in October 2022 when it comes to inflation, the same person probably as economists in the world, what they have said in January 2023, which is three months, 90 days lag. Clearly, when it comes to inflation, inflation is still there, but no longer rising, and the fear was probably to go much higher than where we are now. You see it for the USA. It's still 50 basis points from 3.5% to 4%, but it is stabilizing in Europe at 5.7% and in the world. between 6.5% and 6.6%. You've seen over the last 20 days a lot of raw materials, steel, copper, being sharply down for the last 45 days, and some of them looking to be lower than 2019. And on the GDP growth, which you have on the right side, it is a more bullish environment in terms of outlook. with the USA gaining 40 basis points from 1% to 1.4%, Eurozone coming out from stagnation from 0.5% to 0.7%, and the world enjoying 2.7% to 2.9%, and you know I'm traveling quite a bit. And when you go to Singapore today, when you go to the Middle East and many other places, I must say they have a very robust environment. go a bit deeper on hospitality at large. There's two things... which are very different in nature, which is of no surprise, but we need to pay attention to this. On the left side is the domestic travel. Many of you know that, I guess, 2022 have enjoyed a very nice V-shaped rebound with the numbers at the end of the year, which is actually higher than the performances of 2019, most of it being leisure. And you've seen the numbers in America. You've seen the numbers internationally. in Southern Europe for our core, and France, which is clearly higher than 2019, and I'm probably looking forward to the record number in terms of domestic travel for the years ahead. That is not the case for international travel. It is still 37% down versus 2019. You know that number of a million five travelers at the end of 2019. I just want to remind any of you that part of that million five travelers, billion five, sorry, you have two large population. The two largest emitting market in terms of numbers of travelers happens to be America and China. You have roughly 150 million Americans traveling outside of America. And you have the same 150 million Chinese travelers traveling outside of China in 2019. Guess what? Many of the Americans are back. Almost 80% of that 150 have been traveling in the 2022 environment. Zero. Chinese travelers have been traveling over the last couple years. That is the news of the last 45 days. It's very likely we're going to see, and it's probably going to go sequentially, a lot of that 150 million people from China traveling again. It's been starting, and we've been acknowledging it, in Southeast Asia, in the hotels of Accor. Remember, 80 percent of the Chinese, when they do travel, they stay in Asia. They go to Hong Kong, they go to Korea, they go to Australia, they go to Southeast Asia. Still, we've been missing them for the last three years, and we're very happy to see them back, which is why that minus 37% may be a very different number moving forward at the end of this year. That's what it is in terms of GDP, hospitality. I give the floor to Jean-Jacques on the ACO numbers, and then I'll get back to you on the conclusion. Thank you.

Thank you, Sébastien. Good morning, ladies and gentlemen. Very happy to be with you for these results, which are, as you will see, nice results. As we did for all the 2022 presentations, we're going to provide respire variation versus 2019 to ease the performance and avoid base effect. This is the last time we'll do that. And without further ado, let's go to the highlights presentation. of the financial year. I mean, it's a momentous milestone because we end up with an activity in 2022, which is above 2019. The REFPA is basically 2% above 2019, and we end up the year very strongly with a Q4 REFPA, which is in fact ahead, slightly ahead of the Q3 REFPA, which we all knew was on the back of a great summer, notably in Europe. Moving to the second item here, which is the net unit growth, the last 12 months, the unit growth finishes at 3.2%. The zero COVID policy in China did affect the domestic market, but it also affected globally the supply chain with the collateral effect on other regions. Nevertheless, our pipeline, Accor pipeline, continued to grow. We ended up at 216 southern rooms from 214 last year, and there is a sustained interest from hotel investors. The conversion, which is a nice weapon when capital may be scarce, continued to be extremely high at 47% for the full year. The recovery translated into a global business volume of $23 billion, which is 5% above pre-pandemic levels. So the business volume includes the room, but also includes the funding. Moving to the high part of the table, where you see, in fact, the detail of the result, revenue is at $4,224,000,000, which is 80% increase versus financial year 2021, and 4% plus versus 2019. The EBITDA reaches a level of 674. We were basically at zero last year. And so it's a nice jump. And we are, in fact, beating the consensus by about 5%, the high end of the consensus, which we provided at being somewhere between 610 and 640 back in October. And the reason for that is Q4, as I said, ended up being extremely strong. And so, you know, the dynamic into which we enter into 2023 is an extremely good momentum. All this profit falls nicely into cash. We've got a recurring free cash flow, which ends up at 373 million. And this brings us to conversion level between ABDA to cash, which is very much what we had in the years pre-COVID. We are at about 70%. 55%, which is very much the norm around the businesses, and very much what we used to do in 18, 17, 2019. So nice drop through of profit into cash. If we move to some more details of the top line by geography, what you see here, and you see that very well with the orange bar here, is that the pricing power has remained extremely strong over the last quarters. We end up Q4 at prices which are 25% above 2019, like for like. going into each of the region. South Europe, Q4 is 12% above 2019. It's a slight improvement versus Q3, as you can see. What is nice now is we had the recovery in South Europe that came from the province, but nowadays Paris and the province are at the same level, and that translates, in fact, the return of international and European travelers to Paris. Northern Europe, Northern Europe, I'm not responding to phone calls. Northern Europe, Q4 was 5% above 2019. There was a slight slowdown in Northern Europe, and this is due to Germany. The Germany REFPA is slightly below 2019 level, and this is due to less events and low attendance. You know that the business in Germany is very much driven by fair and convention, and the German economy is one of the economies that suffer the most in Europe. However, the U.K. did very well and remained extremely strong and with very good performance between Provence and London, and this despite the rail strikes, which at one point in time could have been an issue. If you move to Asia-Pacific, nice recovery. Q4 REFPA remains negative, but you can see the curve and the speed at which things are progressing. Pacific, which is Australia, remains resilient. It has been resilient for many quarters. Greater China saw a deceleration, so you don't see an improvement in the number Q4 versus Q3 in Greater China. We all know that the zero COVID policy is now over, and you will see the effect of that change in the numbers of 2023. And notably, in fact, because... you know that the easing of the restriction on the Chinese traveler has only really started in 2023, and we see that in the numbers of January and February. The one thing which is remarkable that I would quote is that the domestic business in China in the Chinese New Year activity which was in January, is at 90% of what it used to be in 2019. So you see there that the domestic has recovered, is recovering, and that the next phase is the one that Sebastian mentioned, which is those 150 million of Chinese basically flooding into Asia as they would do, As a reference, they constitute about 50% of the business of any of their Asian counterparts. The Chinese travel largely first through Asia to the tune of about 90%. Southeast Asia is also recovering. I mean, we saw that already in the Q4 results, in the Q3 results, sorry, with Singapore and Thailand, and this is continuing. I mean, again, Japan is now open, and so all of that is going in the right direction. That means that Asia-Pacific ends up negative in Q4, but will be a springboard for upside in 2023. EMEA, which is the Middle East, Africa, Turkey, you see the numbers. They are amazing. Revpar, 73% in Q4. There is clearly here an effect, which is the Qatar Soccer World Cup. This has obviously boosted the Qatar number, but this is wider, as some of the travelers, in fact, We're staying in UAE. We're staying in Saudi. So between the Dubai, you know, World Conference at the beginning of the year, the expo, and at the end of the year, the soccer, you know, Qatar game, you can see how wonderful the performance of EMEA has been with a very strong pricing power. America has been very much recovering, as we all know, from our peers. South America is doing extremely well. In the Americas, you've got North America and South America. South America, for us, is a significant amount of hotels, more than 400. And here, again, you see a very strong pricing power. And so all of that translates nicely. If you move to the next page, which is how we translate into revenue, fundamentally what's remarkable here is that both hotel services and hotel assets end up with a growth of the revenue versus 2019. So it's spread across. Accor revenue at $4,224,000. is in fact in reality an 80% number on like-for-like basis, but 92% on reported numbers because it's boosted by the U.S. dollar strength versus other currency. You've got the details in appendix. If you look at hotel services, you see the 5% increase versus 2019. Hotel services, in fact, made of two segments, as you know, MNF, which I will detail after, and service to owner, and service to owner did benefit from the activity in Qatar, so it's showing a very nice increase of 8% versus 2019. As for hotel assets, you know that this is predominantly Australia, and it includes the Mantra business, and to a smaller extent, Brazil. And so Mantra continued to benefit. As I was mentioning before, quarter after quarter, they've been doing good. They basically stopped the zero-COVID policy a long time ago, and since then they're having success. They are having, sorry, a nice ride. And it continued to be driven by the leisure demand in coastal area. And the Australian cities are recovering but are still impacted by the lack of international and corporate guests. So, again, here with the opening of China, with more airlines going into Asia, i.e. the capacity being basically recreated, those numbers will continue to improve. If you move to the next slide, which is giving you the detail of MNF, so that's the management and franchise MNF. You've got it by geography versus 2019. You see that it is still a little bit behind, 1%, but the explanation remains the same over time. residual lack of the incentive that we get from our owners for managing the properties. You've got two places where you are behind 2019, which is Asia-Pacific and Northern Europe, so you would expect that. The other regions are very much in line in terms of revenue growth versus the rest part. And globally, which is in the end what matters, because there is disparities, there is chunk of data right and left because of the geography that is ours. But overall, we have incentive at 32% of the MNF revenue, just as a reference. 34 was the number in 2019. So we are basically back, and this leverage is now back helping us in revenue generation. And you see the numbers versus 2021, which is a 93% increase. If I move to the ABDA, so overall the group ABDA is moving from $22 million last year to $675 million this year. MNF, which is moving from $93 to $6. Sorry, hotel services moving from 93 to 661. Out of that, MNF is moving from 274 to 737. This is in the appendix. And it reflects the distortion that I just was mentioning on incentive. If you want to look at the details of this by regions, again, all of that is provided in appendix. As for service to owner, this was a big discussion back in the H1 results. where you may recall we showed a loss of 89 million euros. We did tell you back in the Q3 publication that we would be returning to breakeven, and we are at 14 million plus. So we did do what we said, which, by the way, also explains the 675 million of EBITDA for the group. And if you were to look at the H1 versus H2 balance, ABDA generation, you can see that H2 2022 ABDA is in advance versus H2 2019 ABDA. So there was really an investment that was done in H1 to rebound from the minus 25 percent REFPA that we faced with Omicron in order to ensure that the year will end up properly, and this is exactly what you see in those numbers. It did end up properly. Very well. So regarding hotel assets, EBITDA recovered 237 million in financial year 2022. As I mentioned, this is largely Australia. These are the mantra properties. And the number is in fact behind the number of 2019. but for, I would say, very sound reason, that over time we've reduced our lease exposure in Australia by renegotiating those leases and getting out of them as much as we could. So the gap in EBDA is, in fact, something voluntarily in order to exit from an asset heavy component of the business, which is the Montreal leases. Just as an illustration, the debt on the balance sheet from 2019 to 2022 has been reduced by 40%. on those leases. And by the way, for the record, the new business CBDA is positive. Moving to the EBDA to net profit bridge, a very straightforward bridge. We end up with a net profit of $402 million coming from an EBDA of $675. Not a lot of, you know, exceptional item. You see on the share of profit coming from Associated and Joint Venture the turnaround of AccorInvest, and this line is mostly the 30% ownership that we've got in AccorInvest. Core Invest is having a great year because they are in Europe, and Europe has done well, as you saw in our numbers, and they got the leverage of being an S&P business. And so that's why you see this jump from minus 273 to plus 33. The other line that is significant in terms of delta is the non-recurring item. The $554 million that you see here last year, it was coming from the OASU share that we sold and the gain recognition that was done in 2021, which you don't have that in 2022, and hence the gap. And as far as the discontinued profit, you've got here another reversal coming from the disposal, sorry, the contingency, sorry, that we took on AccorInvest when we did the deal back in 2018. And as the risk did not materialize, we're able to reverse those provisions gradually. So moving to the recurring free cash flow, so from ABDA to recurring free cash flow, here again, a very clean and straightforward ABDA to recurring free cash flow bridge. You see on the cost of net debt a slight improvement because our interest is decreasing. I'll get to that later on. You see that the recurring investment at 159 million is very much in the guidance. We have told you somewhere between 150 to 200 million. We are at the lower end of that bracket. What will happen in 2023 is that the reason why we are at the lower end is that some of the key money got postponed on some properties. And so you should expect 2023 to be slightly above 200 million. So over the two years, we'll be within the guidance we provide, but with one year being at the low end and the other one being at the high end. The other remarkable point here is the working capital is super nominal, close to zero, which is exactly what we have always been targeting. The net debt, you see a reduction of 200 million on the net debt. Obviously, the activity helps. You generate 373 million of cash. Also, we completed the full disposal of Wazoo in 2023. Part of it got executed in 2022 to the tune of 154 million. And hence, there is that element in the bridge. The third thing is that we sold 10.8% of Fenismore, you surely recall that in Q4, for €185 million. And the offset to that is a debt increase related to the constitution of Fenismore, into which you recall we bought some of the shares that we were not owning in Mama Shelter, 25 hours, and more importantly, in Paris society, and the net of all of that is this 200 million improvement on the net debt. Moving to balance sheet, some more on the balance sheet. You see that we fully benefit from the active balance sheet management that we've done over those years. I mean, we've been always actively managing the asset and liability of the company, and you see a debt profile which is very sound, the liquidity at 2.8 billion, 1.6 is cash, 1.2 is a credit line. Our cost of financing is slightly down versus 2021 at 2.1%. And last but not least, we reiterate our commitment, as we've always done, to restore investment-grade rating that we lost with the COVID, like everybody in the industry. And with this full year result, we are basically now at the level of that re-rating, i.e. our ratio, notably the debt coverage ratio, is investment-grade level. So I think this is a very good piece of news. And again, we will... We'll continue to further improve all of this situation. On the right side, you've got the debt profile that we put every year. One thing that I'd like, two things I'd like to say. First off, there is no significant maturity before 2026, and this is the IFRS debt schedule, so it does not include the hybrid debt, which you recall is to the tune of $1 billion in 2024-2025. moving to something which is important and that we've not, you know, highlighting enough in history, which is the extra financial reporting. So not only the numbers, but also what we do in matters of social and environment. I mean, we did set up ourselves a target. I mean, some of them are in in the bonuses of the top management and Sebastian bonuses, and we've been meeting all of those targets. First off, carbon emission. There is a decrease of the so-called COP 1 and 2 versus 2019, and this is in line with what we, sorry, the SLB financing that we issued one year ago. And obviously energy sobriety measures and all of that is helping. The other one which was a significant push because it impacted everybody was the single-use plastic. We've been able to remove 300 tons of plastic this year coming from single-use plastic amenities notably. And we are basically at a ratio of 84% of the hotel having removed those. So for those of you who travel, you clearly should see that. And this is something that... We really want to continue to push. ESG training, I mean, a lot of it is making sure that the head of the people is cleared up. And so there is here a school for change training that we've been having 97% of our employees complete. And last but not least, diversity and inclusion. One ratio here, which is that 39% of our employees of our management committees are composed of women, and this is an improvement versus 2021, which was an improvement, versus 2020. So little by little, we are going exactly where we should be getting. Next slide is back to shareholder and what we do from those nice financials. We are going to resume dividend. Our dividend policy, as we all know, is that 50% of the recurring free cash flow is the yearly ordinary dividend. If you do that mechanical competition, it would give 0.71 euro per share, which is what you've got on the slide. Considering the disposal that we did this year with Enismo and Wazoo, the Board of Directors decided to propose an additional exceptional dividend at the next General Assembly. And when you add up the two, you would be at 105 per share, which, for those who recall, is exactly the level of dividend that was paid between 2017, 2018, 2019. And that translates into an absolute amount of 276 million euros. With this, I leave the floor to Sébastien for some concluding remarks.

Thanks a lot, Jean-Jacques. You've been over time by one minute and 20 seconds, which actually, it's a good transition. To talk about Jean-Jacques Morin, it's part of what you have on your slide here, which is the RE-ORG, This is the last time Mr. Morin will be in front of you as chief financial officer of this company, which is a bad thing because he's very, very good. Over time. Yeah, but you pick up the time by a minute and 20 seconds. And it's an extraordinary time because he will be even better as CEO of an enormous organization, which is 90% of the number of hotels of this group and roughly two-thirds of the cash flow, which is the Eco, Mid-Scale, and Premium. It's a new life. It's a new adventure. It's the perfect timing for Jean-Jacques to go deeper into the organization. He is super excited about it. He probably doesn't show, but I can tell you he's just eager to start, which he did on the 1st of January, which means that, I guess, we have been selecting a new chief financial officer. be coming here early may so until now and early may we're going to be continuing as he does now to do can actually do a role as looking and leading eco mid-scale premium but of course still looking after the numbers but slowly transitioning to full-time job but again i you don't know how and happy I was when we found you some six years ago, seven years ago?