Accor Sa

Okay, merci beaucoup de m'avoir répondu. Allez, we're going to be opening the 2023 year-end number release to each of you, so sorry to be a couple minutes late. So first, welcome everybody to this session. Welcome to those of you on the phone looking mostly at Martine. And myself, happy to be back with you and happy to be... sharing with you what we believe internally being very strong numbers and performances for the group. So let me start with something which is a bit of a 20,000 feet altitude, which you know I love doing. What you have here on the left side is the numbers all of us know well, which is the billion 459 pre-COVID numbers of international travelers. A lot of us have been hoping for V-shape scenario, which is clearly confirmed, not only in the slide, but I guess in actual numbers. You see that, I guess, at the end of 2023, we were still down 12% versus the peak of 2019, so roughly a billion 284. Most of it is people not returning from China, and I'll go in more granularity probably during the session. However, United Nations WTO, which is a World Tourism Organization, which comprise the airlines, have been confirming that very likely, at the end of this year, 2024, we'll be above the 2019 number with a billion 488. That's assuming that probably 80% of the 150 million Chinese travelers, those going outside of China, will be back by the end of this year. What you have on the right side is kind of different in the reading, but probably more interesting because you can have greater takeaways from it. Is there much discrepancy depending on the regions in terms of the international travel recovery? Middle East was already the last one month far better than pre-COVID with those of you who've been going to the Middle East the last two months. We've never seen so many tourists, so many people, so many new openings, both in terms of restaurants, entertainment, and of course, hotels. Africa, still 4% negative, but some of you have been seeing the numbers for the GDP growth in the sub-Saharan African countries. It's very robust for the last 12 months and very robust for the next 12 months, certainly in Nigeria. Europe still lagging minus 6%. And of course, Asia Pacific, I talked to you about it, minus 35%. That will be probably at the bar, which should go back at par in the year ahead. There's six different boxes, and they are very different in nature in terms of what are the fundamentals helping us to assess the REF PAR growth for the next 12 to 18 months. The first on the GDP growth, many of you have seen the numbers, it was 2.9%. for the world in 2023, looking in between 2.9% and 3.1% for 2024. And kind of confirmation of likely to be a soft landing as opposed to harsh landing in America. But what's so important for me is not only the average number. I think it's one of those times for the last two years where we've never seen so much discrepancy, not only from one continent to the other continent, but within the same continent, enormous discrepancy in between countries. And many of you in the room, you understand that the pace of growth for Northern Europe for the last 12 months and the next 12 months is very different from the pace of growth in Southern Europe in between 1% to 3%. And France has confirmed a 1% growth in 2024, revising downwards from 1.4% to 1%. But you still have Spain, Greece, Italy, fetching probably well above 2%. So watch out, because we're going to be navigating through a lot of different waters, depending on where we sit. Demography is probably... what drives us the most, and certainly in terms of the last 50 years, which many of you probably don't remember, but 65 years ago, the planet had less than 3 billion people, and today we're close to 8 billion people. But what's most important is not going from 3 to 8, is what is, for the last 10 years, the increase of the emerging middle-class population. went up 1 billion the last 10 years, half of those from India. The next 10 years, the growth of middle class population is not going to be 1 billion, but it's going to be 1.3 billion. And those are the preferred target for many of our Ibis, Novatel, Mercure, and many other hotels of our core. We just are blessed by the increase of demography in the world and blessed by the increase of households who want to travel. One single item which is very interesting on the most emerged countries in the world, the percentage of spent from an average household in Europe and America, 20% goes to travel and entertainment. If you go to the constraint supply versus demand, this is one also of the Important KPI, because that one is easy to read. For the last probably 20 years, this industry has been benefiting, and you heard me say that many times, 3 to 5% growth per annum, with a notable exception of COVID in 2008, 2009. Supply, average in the world, between 1.5 and 2%. So for the last 20, 30 years, you had a demand in excess of supply by two times. We probably can wisely say that for the next 10 years, demand will no longer grow three to five, but probably four to six. Supply will remain 1.5% to 2%. So you very well could be looking at a three times demand over supply. A lot of it, again, has to do with India. India alone, which I told you the 500 million additional emerging middle class, India had 35 million international travelers for the last two to three years. There is no question in my mind that India will reach the 150 million mark that we've been enjoying with China and America. And believe me, when you're going to have an extra 10, 20, 30, 50 million people from India traveling either east or west through Indigo Airlines or Air India, Most of them will go to Indonesia, Malaysia, Southeast Asia. If they were to go east or if they were to go west, most of them is going to go to the Middle East, to Egypt, to North Africa. This is where our core at the greatest inventory market share and leadership. So it's a very interesting way to look at our own core business and who are we targeting and catering for. Corporate travel strengthening, I was wrong. I was wrong three years ago when I said we're probably going to stand to lose 25% of corporate travel forever because of this ability to work remotely. We are already at 90% of the level of 2019. so they're not only coming back but they're coming back much quicker than i ever expected and we're still looking for the next 12 months probably an average of eight percent additional spend from major corporate organization when it comes to business travel so it's a different mix it's a different business travel by the way it's less people going alone from seattle to singapore but it's less people having 500 seminar organization group. It's spread over 10 cities of 50 people each, and they go on Microsoft and all the system where they can regroup together, even though they are in different locations. So smaller groups, greater numbers of small, medium-sized enterprises, but it is a very strong component of our core and the rest of my peers. Change in consumption pattern, you know it. You're going more and more, each of you in the room, me included, from owning a good to experience. And therefore, you spend more on travel and entertainment than you would do in buying an additional car. And when it comes to supportive international events in Europe, there again, we're blessed for the next 12 months. Certainly when it comes to Europe, we have the European Soccer Cup coming in Germany in May and June. You're going to be having the Olympics. We may talk about it. the months end of July and August, you're going to have the America's Cup in Barcelona, end of August to mid-October. So a lot of new, big international events, probably in where we needed them the most, which is what I told you, the Northern Europe part, where the GDP growth won't be phenomenal for the next 12 months. So they're not bullish, but certainly a lot of... growth and a lot of comfort that 2024 will be an even better year than 2023 so now i'll turn to martin to talk to you about the past the last two months and then we'll go back on forward thanks thank you sebastian

It's perfect. So welcome, everyone. So following several quarters, actually, of strong performance, I'm pleased to announce that we had also a very strong fourth quarter to close the year. So I'll start with the highlights and starting on the left with the operating drivers. So very robust REF PAR growth in the fourth quarter, 11% like for like. And that growth was actually steady across the quarter. We're closing the year with a 23% REFBAR growth, like for like, which is in line with the guidance that we had communicated in October, which was in the low 20s. Our net unit growth was 2.4% for the year. That is also in line with the 2 to 3%. guidance. Our pipeline grew at a faster rate of 4.2%. And I'm pleased to report that we actually had record signings in value in 2023. And I'm also pleased to report that pipeline growth actually accelerated in the fourth quarter. So if you look at the growth quarter over quarter, it's actually up significantly higher. Now, let me turn to the financials. We translated this very strong operating performance through strong operating leverage and tight discipline into what is really a record EBITDA and cash generation for Accor. Revenue topped $5 billion, and it's up 18% like-for-like versus prior. And within that, M&F, which is management and franchise revenue, which is the core of iCal's activity, stood at $1.3 billion with a very impressive growth of 29% like-for-like. That is six points above the REF PAR growth, so really strong ability to convert the REF PAR growth into management and franchise fees. Turning to EBITDA, I talked about the strong operating leverage that allowed us to deliver an EBITDA of a billion and three million, so just about a billion mark. It's a major milestone for Accor, and it is above the high end of the guidance, the high end of the guidance being 985 million, which we had shared with you in October. We converted this very strong EBITDA into a very strong free cash flow as well. So recurring free cash flow for the year was $596 million. That is a 59% cash conversion, which is a very healthy conversion of EBITDA into cash. and that is actually our guidance was above 55%, so clearly well above the guidance there. And finally, those very strong results, as well as the confidence that we have in 2024, has allowed us to return... 676 million to shareholders in 2023, which is a clear acceleration of return to shareholder. And within that, we have a 400 million share buyback program, so first tranche of the share buyback program, which we completed in December of this year. Last year, sorry. So turning to REF PAR by division, and then I'll give you a couple of highlights by country. So starting with the premium mid-scale and economy, which is on the left side of the chart. So 12% REF PAR growth in the quarter. And you can see here the performance by region. in europe north africa still you know a good good level of growth at eight percent um and really performance uh was uh pretty similar across the uh three largest countries which is france uk and germany in france uh we had a bit softer paris as opposed to uh the province but that's really uh related to the fact that we had some really strong events in 2022 and those events take place every two years therefore uh 2023 you had a uh you know a soft a baseline effect And particularly, you know, the Motor Show or the Cial. In the UK, London and Provence actually were resilient and reported comparable growth. And in Germany, we were actually, even though, you know, Germany's economy is clearly, hasn't been performing as well, we had a steady improvement in REF PAR quarter over quarter. And they're still further upside in the years ahead, as occupancy rate in Germany is a bit behind where it is in other parts of Europe. In May-Apac, you can see here a very, very strong growth of 19%. This region has been performing very strongly throughout 2023, and that continues to be the case. The 19% growth is actually driven, as you can see here, equally by rates and by occupancy. And within that region, still very good performance in Middle East, Africa and Turkey, which reported solid price increase supported by leisure. And this is despite the fact that obviously we have the conflict in Israel. We had adopted somewhat of a cautious approach in our third quarter call because this was the beginning of this event, but it turned out that actually this had very little impact on Accor in the fourth quarter and in this region in particular. In Southeast Asia, the REF bar was also very healthy, actually comparable to Middle East Asia, also driven by price increases supported by leisure, as well as some events. The Pacific, which is mainly Australia for Accor, has recovered earlier than the other regions, as you may recall, and therefore is more stable. into a normalization phase with low single-digit REF PAR growth. And finally, China. China continues to recover. Actually, China is now slightly above 2019 in the fourth quarter, and obviously achieved very strong REF PAR growth, given that it was very late in the recovery. And finally, America's, again, you know, very healthy growth, 15%, mostly driven by prices, with strong Congress and shows activities. Turning to luxury and lifestyle, so luxury and lifestyle reported a 8% REF PAR growth in the fourth quarter. As you can see here, that's mostly driving by occupancy rate, with contrasted performance across luxury and lifestyle. In luxury, 10% REF PAR growth, pretty consistent across the brands and the regions, primarily driven by occupancy rate. Lifestyle was actually flat in terms of REF PAR, and this is really... a factor of the 2022 baseline, which had the FIFA World Cup in Qatar. If we exclude Qatar from lifestyle, lifestyle is actually up 6%, which is in line with our expectations. Turning to network and portfolio, so I'll start with premium mid-scale and eco on the left side of the chart. So net unit growth was 1.9% for the PME division. That is in line with our guidance, which was circa 2%. Churn has slightly accelerated in that portfolio, and this is really a reflection of the decision that we took and that we shared with you actually at the CMD that we would prune the portfolio. gradually, particularly in Enel, so Europe, North Africa, and this is to ensure that we have a consistent brand standard. Now, on the positive side, and to note, the churn properties actually have a lower fee per room than the existing portfolio and therefore should contribute to the increase in average fee per room, which is a KPI that we follow very closely and on which we've made very good progress. So the pipeline for PME was 172,000 rooms at the end of 2023, and that is up almost 4%. So a two-point differential between the growth of the pipeline and the growth of the network, which therefore gives us confidence in our ability to accelerate going forward. And finally, on the M&F revenue, so management and franchise revenue, this is the fee per room. We close the year at €1,200 per room. That is above, actually, the high end of the guidance that we communicated, and it is, well, above prior. So I will now turn to luxury and lifestyle. Q4 was actually a very active quarter for luxury and lifestyle. We opened 4,500 rooms. That's almost 50% of our full year opening. In terms of the network growth, the network grew at 5.5% for this division. And that's really driven by Ennismore, which had an impressive 18% growth, which is actually in line with what we had communicated, again, at the CMD. Now, some notable openings during the year, obviously the Raffles London at the Old War office, but also some very large resource properties in Egypt. In 2023, luxury growth from a network perspective was more modest. We took some portfolio actions to strengthen the brand positioning and consistency. But importantly, the pipeline growth significantly accelerated for luxury and lifestyle in the fourth quarter. Pipeline growth on an annual basis was up 6%, so slightly higher than the 4% growth I just referred to for PME. But importantly, if you look at quarter over quarter, so fourth quarter over third quarter, the pipeline grew 13% for luxury and lifestyle. And that really gives us confidence in our ability to accelerate the growth of that division, which we expect to be one of the benefits of having reorganized across two divisions with dedicated focus and dedicated team. And so at group level, again, net unit growth 2.4%, in line with the 2% to 3% guidance that we had shared with you. Group M&F revenue is 1,600 euros, again, above the high end of our guidance and significantly above last year. And just in terms of breakdown conversion versus new openings, we continue to have a very strong ratio of conversions with 50% of the openings in 2023 that were actually conversion. So I'll turn now to the group revenue. So group revenue... Slightly over 5 billion for the year. That's an 18% growth on a like-for-like basis and a 20% growth on a reported basis. And the difference between reported and like-for-like is FX and scope, as we integrated Paris Society into our number last year, and actually the two compensate each other. So I'll start with PM&E, where revenue was up 17% for the year on a like-for-like basis. You can see here the components of that growth. Management and franchise revenue grew at 27%. That is three points above the REF part growth for PME. So again, good conversion. Growth in STO was below REF PAR growth, but this is really a reflection of the fact that we had very strong revenues in 2022 coming from the accommodation service agreement we had for the FIFA World Cup, and this impact actually was particularly noticeable in Q4, and you can see that if you look at our Q4 number. And hotel assets and other is primarily the Australian and also variable leases in Turkey and Brazil. Turning to luxury and lifestyle, where the revenue was up 22% on a like-for-like basis, you see here the very strong growth in management and franchise, 32%. That is actually 12 points above REF PAR growth. And this is really a reflection of the incentives The vast majority of our portfolio is under management contract in luxury and lifestyle, and we had a very strong performance of our hotels, obviously, related to the REF PAR, which really boosted their margin and, therefore, our incentives. Service to owners, actually, revenue growth was fairly in line with REF PAR, and then hotel assets and other, on a reported basis, is the result of the integration of Paris society. So zooming in on management and franchise revenue growth, 29%, so six points above REF bar growth, and this is really boosted by incentives. You see here the growth across the division, which I just commented, and then by region. If we start with PME, all regions actually had very robust growth, and all regions had growth above REF PAR. In luxury and lifestyle, you can see very consistent growth across luxury and lifestyle, again very strongly driven by the growth in incentives. We had taken a somewhat prudent approach in our third quarter, given the risk that we potentially saw in Israel. That risk actually has not materialized, which allowed us to top up incentives in the fourth quarter. Turning to EBITDA. which is a record high for Accor at a billion and three. That is a growth year over year of 55% on a like-for-like basis and 49% on a reported basis. You can see here the growth in premium meat scale and echo, which was an impressive 35%. with STO, so Service to Owner EBITDA, which is a positive 24 million. STO overall is positive. This was a strong commitment that we made, and we delivered on that commitment. And it is positive not only overall, but it is also positive globally. in each division, as you can see here. And finally, the hotel assets and other EBITDA decrease is related to our Australian business. We had taken a very strong price increase in Australia in 2022, anticipating the inflation and also leveraging the recovery. The inflation actually materialised in 2023, and therefore we have a bit of an EBITDA decline in that region in 2023. If I look at luxury and lifestyle, EBITDA is up a very, very healthy 82%, with 43% in M&F. There was a strong margin improvement in luxury and lifestyle. And hotel assets and other is reflecting the integration of Paris society. Now, one thing to keep in mind is, as we reorganized the group, we transferred some of our personnel from our corporate teams to our division team. And this really primarily impacted the PME division, which is why when you look at the margin for that business, it's actually slightly down in 2023 over 2022. And that's really related to that fact. If you look at the M&F margin for the group overall, including the corporate team, the M&F margin plus holding is actually 62% in 2023, which is up four points above 2022. So very strong operating leverage of a very strong REF part. Now let me move to net profit. We just talked about the 55% net growth like for like in EBITDA and 49% reported. Very strong growth in net profit as well. We closed the year with 633 million of net profit, which is a 57% growth year over year. obviously driven by the increase in EBITDA, but also by a very favourable tax rate. You can see here our income tax for the year is only 39 million, and in this number we have a benefit of deferred taxes of 100 million, which was actually good news because that means we're starting to recognise our deferred tax assets in France as France is turning positive from a net income perspective. If you were to exclude the impact of deferred taxes in both 2022 and 2023, it is still a very impressive 48% growth in net income. Just a couple of call-outs on those various lines. DNA increased, that's related to the consolidation of Paris society. as well as the rent from Paris Society, the share of profit losses and associates grew from 33 million to 44 million. And this is really a reflection of the growth in Accor Invest, which is also benefiting from the strong recovery in Europe. And we also had the revaluation of our portfolio in Casada, which is our investment vehicle in Africa. On the non-REC, really de-minimal activity. We had some positive impact from reversal of impairments of our brands, as well as the gain on the sale-leaseback of CQ&A. And we were able to offset the cost related to the implementation of the new organization. Net financial expense, here you see that the net financial expense actually increased by about 16 million euro per year. When you look at the recurring free cash flow, which I'll just comment in a second, our cash interest payment actually came down in 2023. This is a reflection of the fact that we had some non-cash FX charges, which impacted our financial expense in the P&L. And income tax, I just called out. So all in all, a diluted earning per share of 2 euros and 20, 22 cents, which is obviously very, very strong growth compared to 2022. Let's now turn to cash. So we had a record cash flow, recurring free cash flow generation in 2023, 596 million, almost 600 million. That is a 59% cash conversion, as I was commenting earlier. You can see here the drivers of this free cash flow. Obviously, EBITDA was the major contributor. Cost of net debt on a cash basis actually came down, and this is a combination of The fact that we have higher cash balances on which we earn good interest given the interest rate environment. Income tax driven essentially by the increase in profit before tax. Lease liabilities, which is a lease payments. reflect the integration of Paris society and working capital and assets. So working capital was a positive 71 million for the year, which includes both the improvement that we made on collecting on our receivables, but also importantly, the fact that we had agreed with AccorInvest deferred payment plans. on fees, and Accor Invest actually is now completely current, has paid off all their outstanding debt, and there's about 52 million in that 71 million, which is related to that. And that debt increased from 1.7 billion to 2.1 billion, so about 400 million in the year. Just a couple of words on balance sheet and shareholder return. We have continued to strengthen our balance sheet. We have restored investment-grade rating by S&P and Fitch, and this comes with a stable outlook. And that gives us greater market access and greater flexibility. And as we announced, this triggered the successful refinancing of our January 2019 hybrid of 500 million. We also secured a new RCF, Revolving Credit Facility, for a billion. And that allows us to maintain a very healthy and robust liquidity and maturity profile. We are committed to maintain our investment-grade rating, and we've actually improved our net leverage, net financial leverage, to below three times in 2023. So, strong balance sheet, positive, confident outlook going forward, strong results. That allowed us to resume an attractive shareholder return policy, and you can see here that In 2023, as I shared with you, we distributed and returned 676 million to shareholders. Now, that represents an 11% return, which is an all-time high, based on the January 1st 23 share price. Given the recurring free cash flow, you may recall that our dividend policy for ordinary dividend is to distribute 50% of our recurring free cash flow. So that translates into a proposed dividend, which we propose at the General Assembly. of $1.18, and that's a 12% increase versus the dividend that we paid in 2023. And so to conclude, before I turn it back over to Sébastien, so you see here the guidance that we had communicated in our October call, the actual results, and then we have reminded you of the guidance that we gave on the midterm during the CMD. So in 2023, we exceeded our guidance very clearly, and we crossed two key milestones by delivering an EBITDA of a billion euro in 2023. and initiating the first phase of our share buyback program with a 400 million share buyback tranche, which we executed in the fourth quarter of 2023. So regarding 2024 onwards, and consistent with our standard practice, we do not disclose at this point in time specific annual guidance. That being said, we are confident in our ability to deliver on our midterm perspectives, which, again, you see here disclosed and which are the ones that we shared with you in the CMD. So 3% to 4%, REF PAR, NUG 3% to 5%, M&F revenue growth 6% to 10%. STO, marginally positive. Again, a very strong commitment. And Group EBITDA, 9% to 12%. And again, cash conversion ratio above 55%. Again, this is the midterm perspective, 2023 to 2027. And share buyback program, again, 1.5 billion to 2 billion over that period. And I will now turn it back to Sébastien.

Thank you very much, Martine.