Accor Sa

Well, I guess we're gonna be right on time, which is untypical for me. Welcome, welcome everyone to this session where we're gonna be talking about 2020, 2024, and hopefully about 2025 and onwards. Thanks for those who made the effort to come physically in the room. We're happy to see you and happy to have all of you online. I'm gonna start with, probably what I like the best, which is a 20,000 feet altitude, looking at Earth and looking at the world. Geopolitics, I'm not going to teach you anything that you don't know, but it's probably good to be aware of it. The world is probably more so than ever fragmented in terms of conflict and in terms of accepting differences. Economies are Very contrasted in terms of where you are in the world. If you are in Singapore, in the Middle East, you're a happy guy. If you end up being in Northern Europe, you're certainly less happy. And if you're in America, you are also a happy person. So we have to navigate between a lot of different economies. And I think we're okay at it, trying to anticipate the shocks and what could be in front of us. Global trade volatility, it's only the beginning. So we're hopefully going to do better in the next few months or a few weeks. Inflation and interest rates are under control and normalized. I saw what happened yesterday. Numbers in the UK. So we have to be cautious before we celebrate any victory here. Eco-consciousness, it is a bigger and bigger topic, again, depending on geographies and politics, but it is not going the right direction in terms of climate control. We have to be even more sensitive to other tourism, and ACO is doing quite a bit on that. really putting new destination on the block. But I guess we have to be part of it and we have to act. Diverging climate policies, we just touched upon it two seconds ago. Technology, that's probably where we should be spending most of our time in the next few months before the end of the year is AI. Generative AI has been adopted by many of you in the room and many of you listening to me. But it's even more true for the search and those who are going to be looking for a new destination. The new generation between 18 and 24 years old, 50% of them go on ChatGPT and many other lookalike instruments on selecting where they want to go. One minute on this one or 30 seconds. We had last week in Paris the AI International Summit and a lot of big guys in industry came in Paris And I had the privilege to spend some time with Chuck ZBT, OpenAI, and Sam Altman. And we were 20 or 25 different CEOs in the room. And we talked about impact of drinking AI. And I asked him, I said, can you please help me understand what could be the impact of AI on our hotel industry? And he posed and he said, well, you might be the only lucky guy in the room. And what he meant by it, because we actually went further on his dialogue, he said, well, a lot of different industries, vertical, whether it's healthcare, e-commerce, automotive, and many others, will be severely impacted, probably for the better. When it comes to AI, he said, but on hospitality, food and beverage, experience, AI will be only an enhancer and certainly will not replace what you are doing well. So use the tool, but don't have any fear on basically replacing that human interaction that you have. So it was a fascinating moment, no question, at the bottom right here. We have to be anticipating and we have to be one of the best users of AI, certainly in terms of efficiency, operationally, when in terms of customer relationship with our own end guests. The international travel is back. Is it as strong as we wish? Probably not, but it's certainly back as of 2019 level, and we are expecting a 3-5% growth in 2025. Of course, it diverged on different regions. It is very strongly back and record numbers, plus 32% in the Middle East, and it's not stopping. Middle East is really an incredible destination for a lot of actually new international visitors. It is getting much better in Asia-Pacific and it is getting much better in China. And the one thing which is very encouraging about China is the Chinese are really going internationally almost as much as 2019, probably likely at the end of 2025. So you're going to see a lot of these 150 million Chinese who left their country in 2019 will be back to the same level probably in the next 12 months. Super encouraging in terms of Chinese visiting all Southeast Asia, Australia, Korea, and other countries. 75% of the travelers are really linking their trips to a leisure experience and as a priority. So we have this new name which I think I finally understand is gig tripping or gig travel where it is true that a lot of Visitors go around an event that they really want to attend and they stay longer in that destination. It is true for music, it's true for sport, it's true for culture. We had some news this morning. I think the number was almost 2 million visitors came to Notre Dame to visit over the last 60 days. And many of those are international tourists who spend actually two or three days. But the aim and the objective was to go and visit Notre Dame again. Climate issues, we have to be cognizant of it. We have to basically do a better job on promoting, kind of actually preserve secluded destination. And there is one benefit out of it. People might travel less, but they stay longer. The average lack of stay is probably up 20 to 25% from pre-COVID. New destination, I just touched upon it. Personal balance, it is tough. It is very difficult for us to assess that. Is the trip done on business or only leisure? It's all combined today. Data doesn't really show us what was the main purpose of the trip. But that leisure name, which I still forget who invented it, whether it's one of us, but it is more true today than it's ever been. And you know on working remotely, we still have exact same trend that we had for the last two or three years. People do travel from Thursday night to Tuesday morning. They work remotely on Friday and Monday, but they visit a place a couple of hours away from where they live and they enjoy a longer weekend. But of course, they do work on that Monday and Friday using the Wi-Fi at the hotel. So it's a very good environment in which we live in terms of underlying economics for the travel and hospitality sector. No question about it. But you're going to have to navigate in terms of destination, geography, and economies. So we feel very strong for 2025 and onwards. Give it to you, Martine.

Thank you, Sébastien, and good morning, everyone. So for clarity purposes, before I start with my introductory remarks, I'll just start with a comment on EBITDA. And you may notice that in our financial communication material, we have renamed EBITDA to Recurring EBITDA. And this is strictly to be consistent with the naming convention in our financial statements. It does not impact at all the definition, which is as per previous year and same definition as the CMD. And I'll now start with page eight for those of you who are on the phone. So 2024 illustrated the resilience, continued resilience of the hospitality sector in a context that is normalizing. Following several quarters, of strong performance. We were really happy with the fourth quarter performance, where REFBAR was up 5.8% on a like-for-like basis, and the performance was actually pretty well balanced across occupancy and rate. On a full year basis, REFBAR was up 5.7%, which is above the high end of the guidance, where we disclosed in October. Room revenue growth was actually driven both by business and leisure, which proved remarkably resilient. On the corporate activity, particularly in large account. Room Revenue posted a double-digit growth, and that was really driven by our tech and financial services client. Turning to net unit growth, net unit growth was up 3.5%, which is exactly in line with our 3% to 4% guidance, and that's over a point above the net unit growth of 2023, so clearly a sign of acceleration. Pipeline was also up by 3.8%, so slightly above the net unit growth, and that is supporting our midterm goal of delivering net unit growth of 3% to 5%. And in addition, we reached a record high in the value of our signings, which were up 11% above 2024. And that is really a testimony to the strength of our brands. We translated the solid operating performance into a solid set of financial results. Revenue was $5,606,000,000. That's up 11% versus prior year with a growth of 7% in our management and franchise revenue. Recurring EBITDA reached close to the high end of our guidance at a billion, 120 million, and that's up 12% year over year. And this included a very healthy progression in our M&S margin of 100 basis points, which is in line with the trajectory that we have for this segment. So very good operating leverage in 2024. Turning to recurring free cash flow, we treat 614 million, that's a high for the group, with a cash conversion of EBITDA of 55%, which is in line with the guidance. And finally, shareholder return, we returned 686 million in 2024 to shareholders, and that equates to about a 7.5% yield based on the January 1st market cap. So in summary, following the You know, Capital Market Day, this is the second year in a row where we are consistently delivering in line or above our guidance in both operating and financial metrics. Let's move to REVPAR. So as I just indicated, we closed 2024 on a really strong note with a 5.8% REVPAR growth. You can see on the left side, PME, which was 4%. And you can see that also equally driven by price and occupancy gain. In the quarter, rate was up 2% and occupancy rate was up one point. Occupancy is still about two points behind 2019. In ENA, Q4 REF PAR was up 2%, primarily driven by occupancy rate. The three largest countries in ENA, which are France, UK and Germany, pretty much maintained the momentum from the first nine months. Starting with France, Paris reported low single-digit negative REVPAR in the quarter. Some of that is the effect of the Rugby World Cup in 2023, but we were very pleased following the comments Sébastien just made on the reopening of Notre Dame. REVPAR turned positive in December in Paris, thanks to very strong international demand. And the drivers for that are the strong U.S. dollars. So we saw a lot of Americans coming to Paris for the holidays, the opening of Notre Dame and the post-Olympics effect. Provence was a bit less volatile and reported flattish growth in the fourth quarter. In the U.K., London, as well as province, were pretty flat, which is consistent with the trend that we've seen in the previous quarters. And Germany, REFBAR outperformed both France and Germany with low single-digit growth in the quarter. And we still have a fairly large occupancy recovery to take place in Germany. Turning to Mayapak, where we had a 5% REFBAR in the quarter, which was a bounce back after what we had experienced in Q3, which was somewhat weak. And the performance is driven two-thirds by rates and one-third by occupancy. In Middle East Africa, Turkey, which is really the part of this region that drove the improvement with high single-digit growth, was really driven by the recovery in Saudi Arabia, which was no longer affected by some of the seasonal comps we have in this region, where demand is tied to the calendar of some of the religious pregnancies. very strong occupancy in this region, actually in this region in Middle East Africa, Turkey. the occupancy is 10 points above pre-crisis level. In Southeast Asia, continued strong momentum, double-digit red bar in this part of the world, which highlights the continued attractiveness of the region. Occupancy is actually also above 2019 level in Southeast Asia. Pacific returned to positive growth in the fourth quarter, mid-single-digit growth, with very strong leisure demand. And finally, China, China sequentially improved. So Q4 was better than Q3, but still negative in the mid-single digits. America's continued strong momentum, double-digit growth. You see 12% in the fourth quarter. America's, I remind you, is mostly Brazil for Accor. And we still have very good, very good momentum in occupancy and rate. Moving to luxury and lifestyle on the right. Ref bar in the quarter was up 10%, and you can see it's pretty balanced across both luxury and lifestyle. On luxury, which was up 9%, that was driven by occupancy and rates. Red bar performance was actually very solid across all brands and across all regions. And actually, if you look at comparable regions, luxury had a better performance than PME, and that is a testimony of the resilience of the luxury sector. We were particularly pleased with the strong performance in North America and Europe. Lifestyle aligned with the performance throughout the year, with a REF PAR growth of 11% in the quarter, and that is particularly driven by Turkey, Egypt, and the United Arab UAE, where we have a lot of results. Moving to the portfolio on slide 10. And I'll start on the left with PME. So net UD growth 2.8%. That's in line with the two and a half to three and a half guidance that we've communicated. We had a bit higher churn in 2024, like we did in 23. And that really is a reflection of the continued pruning of the portfolio. And that's mostly affecting the ANA region. Although I will point out that the properties that churn have a lower fee per room than the property that we open and therefore over time we should see an accretion in the value of our keys. The pipeline was up 3.2% year over year, 177,000 room. And a few milestones just to illustrate the openings. We opened our 1,000th Mercure and the first premium signing in LATAM, which is, again, just another sign of the success of refocusing on premiums. And the M&F revenue per room, you know that's a very important KPI for us, was actually stable at 1200 euros per room. Turning to luxury and lifestyle, on the right, Q4 was a very active quarter for this division. We opened 6,000 rooms, and that allowed us to actually, that was a record, three times higher than the pre-COVID level. Notable openings in the year were Fairmont Long Beach, the SLS Cancun, and Mama Shelter in Dubai. LNN pipeline growth continued to grow at a sustained pace, but more importantly, the value of the signings is quite dynamic. Signings in value grew 39% for the luxury and lifestyle division in 2024. And we also have a very healthy MNF revenue per room at 3,900 euros, which is slightly up from where it was in 2023. So at group level, again, 3.5% net unique growth in line with the 3 to 4% guidance we had communicated for 2024 with a record level of opening growth. in Q4. I know you guys often want to know our conversions. Conversions were 55% for 2024. Moving to the revenue on page 11. So revenue 5.6 billion in 2024, that's up 11%. You can see here the makeup of the revenue growth by segment. This revenue for the group was impacted positively by the full impact of the consolidation of Foutel-Echabaut and the acquisition of RICAS, but we also had a partial negative offset from FX. So if you look at it on a like-for-like basis, the revenue growth was 9% for the year. For PME, revenue was up 5%, which is in line with REF PARC. services to owner grew at a higher pace than Refbar and that's a reflection of the positive channel mix we have in distribution. And hotel assets another pretty much flat in 2024. The performance remains driven by Australia and Brazil. We did dispose Arco Vacation Club in Australia, which had a negative scope impact. And then we had the impact of FX, primarily the Real, which really started declining in the back end of the year. Turning to luxury and lifestyle, very impressive growth, 19%. You can see that M&F revenue is up 11%, so that's four points above the RFPAR growth for this division. Positive impact of openings as well as the growth of our branded resi business. Services to owner also grew at a slightly higher pace than Refbar, also due to the positive mix in Chanel. And hotel and assets pretty much reflects the acquisition of Peter Chabot and Ricas, as mentioned previously. Turning to MNF revenue. So MNF revenue up 7% for the year, so that is above Refbar. You can see here the breakdown by division. So I'll start with PME. PME was up 5%. And the growth was robust pretty much across all the regions. What you see here in America is up 2%, which is obviously less than the rest bar, is a reflection of the erosion of the real. For luxury and lifestyle, 11% growth for the MNF. You can see pretty much driven by lifestyle, 31% growth year over year, which is obviously a combination of the good activity in Refbar, great openings, but also very strong activity in branded resis. Luxury growth was a bit below REF PAR and this is impacted by the end of some of the incentive waivers that we had in some Sofitel primarily in France. I'll now turn to EVDA on slide 13. So the group EBITDA was a billion, 120 million. That's a record for the group. That was up 12% on a year-over-year basis. And it pretty much reflects a very strong top-line growth, coupled with sound operating leverage with 100 basis points improvement in M&S margin. STO. positive, as was our commitment. It's actually positive across both divisions, and it's a combination of distribution channel mix as well as cost discipline. And for hotel assets and others, it's really a reflection of the growth in profitability in our restaurant business, but also the integration of some acquisitions. Regarding PME, you can see that PME EBITDA was up 8% in 2024, reflecting the activity. Very, very healthy growth in margin, in MNF margin for PME, which was up 130 basis points, so slightly above the 100 basis points commitment that we have in this division. Positive STO and hotel assets and other, again, a reflection of some scope effect, but also some FX impact. Luxury and lifestyle, very healthy growth, 21% growth in EBITDA, with 12% growth in M&F. Again, positive STO, and then obviously very strong growth in HEA and other primarily acquisition-driven, but also good margin improvement in restaurant. I'll now turn to the rest of the P&L on page 14. So we achieved a net profit of 610 million in 2024. Our earnings per share on a diluted basis were two euros, sorry, and 33 cents. That's up 5% versus prior. So I won't go through all the lines of the P&L. I'm just going to call out the main highlights. starting with DNA, which you can see here, increased to 341 million. And that's a reflection of the full year impact of some of those acquisitions that I previously mentioned, as well as the full year impact of the Paris headquarter, which you may recall that we had to sell these back in the Paris headquarter in the first half of 23. The other line to note is our share of profit losses and associates, which went from 44 million to 188 million. That is really related to our 30% stake in AccorInvest. As you know, AccorInvest is engaged in a very large asset disposal plan. They've actually completed 50% of their plan. And that has triggered some important capital gains of which we capture 30%. But operating performance at Corinvest was actually very solid. Net financial expense went up, and that's driven by the increase in our debt. The average cost of debt is stable, 2.5%, no change versus last year. And we also had some non-cash negative impact due to some adjustment in the fair value of some financial instruments. which flow into this line. And finally, income tax. Income tax is actually, if we were to look at first half, second half, you will see that it's quite equivalent. It is normalizing in 2023. I recall, I remind you that in 2023, we had a very large impact from deferred taxes, 125 million, of which 100 million from deferred taxes. The 24 income tax line includes a one-off impact, negative impact from taxation related to our reorganization by division, which we offset by some deferred taxes as well, but not in the magnitude of 2023. Moving to cash flow. So recurring free cash flow, 614 million. That's a 55% cash conversion ratio. If you look at the main line, you can see that the cost of debt is quite stable. Cash income stack increased to 169 million. That's a reflection of the increase in taxable basis, but also the fact that we have some countries for which we have extinguished our NOLs, and therefore we're starting to pay taxes. Lease liability, pretty flat. Recurring investment capex, that includes key money. You can see that that was pretty flat versus prior, $221 million versus $218 million. And finally, working capital. I remind you that in 2023, we had a favorable impact of $52 million in working capital from the final payment from some deferred fees from Accorinvest, and you can see that. If you normalize for that, working capital is actually pretty flat year over year. And net debt reached almost $2.5 billion. At the end of 2024, as a reminder, net debt was $2.9 billion at the end of H1, so that's a $400 million reduction. And the main movement in the second half were on the positive side, obviously the generation of cash flow. As you know, our cash flow is quite seasonal. Most of it is in the second half, as well as the capital injection in aqua invests. So zooming on the balance sheet and shareholder return on page 16. We pursue, we continue to pursue our active liability management. We did a couple of issuance in 2024. Mainly we issued a seven year bond for 600 million with the slightly under 4% coupon and we successfully refinanced our second hybrid. Debt average maturity actually went up in 2024. We're now above three years for a stable cost of debt. And our net debt leverage is managed at a level which is consistent with our investment grade rating, which we intend to keep as it is defined by rating agency. On the right side, you have the trend in shareholder return. Again, 686 million in 2024. That's a 7.5% yield. And we will be – our policy is to distribute 50% of our recurring free cash flow. So if you do the math, that equates to a dividend of €26, which is 7% higher than the dividend for 2023. And that's what we will propose as an ordinary dividend in the shareholder assembly In me. And I will conclude my introductory remarks on the slide 17. You can see that is the scorecard. I'm almost tempted to say that is our Bible. In 2024, Accor is well in line with its guidance on every indicator and our results are also fully consistent with our CMD guidance, which is the last column on the right side of this slide. So we delivered again, very solid operational and financial metrics. which coupled with a strong financial discipline led to a 12% EBITDA growth and a 55% cash conversion. We continue to execute our shareholder return program as we committed to during the CMD in June of 23, and we exited 2024 on a strong note, which we hope bodes well for 2025. And as for 25 onwards, and this will not be a surprise, consistent with our standard practice, we do not disclose specific guidance at this point in time in the year. But that being said, we are very confident with our ability to deliver our midterm perspective, again, as disclosed during the CMD. And with this, I'll turn back to Sébastien.

Merci beaucoup, Martine. So we're going to go to the final four slides. The one we probably should be the proudest about is ESG. You know this company has been doing quite a lot for the last 45 years when it comes to engagement, diversity, social elevator, hiring a lot of people with less privileges, and of course, anything which is environmental. And one of the things that we've been lacking, and feel a bit sorry to admit it, whether we have the right tools, the right technology, and then the right measurements. And just for you to understand, when you deal with 127 countries and some very remote places in Sub-Saharan Africa, in South America, in the Middle East or Australia, it is tough. to have a systematic management tool to understand and how to benchmark how much are you consuming when it comes to carbon emission, energy, water, food waste, so many different things that I guess we are committed to. But you need a common system, a common tool to understand what you are trying to resolve. So we had an engagement in the S-TIP of all the employees of this company on saying, well, we need to get our act together and we need to get that common tool for water consumption. And we said, let's have it for 80% of the managed hotel in the world and let's try to get it for 50% of the franchise hotel in the world. That tool is called Gaia 2.0 and there is also kind of actually sub-tools. And I was extremely happy to realize that, I guess, in a matter of 12 months, we got 90% of all the managed hotels of our core on this planet and 67% of all the franchise hotels to really give us that benchmark, that measurement number that will be the base upon which you're going to see in the 2025 resolution. Now that we have the benchmark, well, now we're going to have to reduce the water consumption. Two, eco-certified. It's not a gimmick. When you have an eco-certification, we said 30% of the hotels should have it. We ended up at 36%. That means you have commitments, you have engagement, and those are in between different KPIs. And it's not as easy as people would think to get a certification because that means that, I guess, you're undertaking something big over the next two to three years. And, of course, people could relate to it, both customers and owners. And that 36% is good, but that's not good enough. So we're going to go to a higher number in the next 12 months. Diversity, inclusion, gender parity, we've been trying to attack and we are getting where we want on could we get that gender parity between men and women in this company. We got it resolved a long time ago, actually, probably four or five years ago. One of the engagements of eight years ago was to have salary equity in between men and women within Accor. And it is, and it has been the case for the last two years. Now we want to make sure we have the same level of expertise and position and leadership between men and women. 39% was the number for 2024. This is what we got. And you're going to see for 2025 and onwards, we need that number to go up and clearly to a 50-50 benchmark. I'm not going to spend too much time on the key takeaways. Some of it you've seen with Martine. I just want to, and there's only four of them. The first one is important, probably critical or indispensable, which is we'd better meet on guidelines. When we project yourself and you expose it to the outside world, well then, whatever it takes, just get there. And I'm happy, and Martine as well, on being totally fully in line with the guidance, with all the numbers that Martine exposed to you. Two, When we've done Turbo in 1st of January 2023, Turbo was the split in between two autonomous business units, which is PME on one side and Lux Lifestyle on the other side. That was probably an easy decision. That was not an easy project to execute in terms of assignment, in terms of autonomy, in terms of leadership, in terms of accountability. And I talked about it last time we were together in 2024. It went quicker than expected and now it's a walk in the park. We're never going to go back. People have ownership, accountability. They actually enjoy having their own turf. What I'm trying to preserve is even if they have total ownership of what they do, which was the aim and the objective, that they understand not to be alone in their own swim lane, that we're all battling together as a collective intelligence, and so we still have to interact quite a bit between the PMECOs and, of course, between the left-to-left ICOs and the PMECOs. There is... Last line here, it's called increase value from development. I'm going to spend two minutes in exactly 30 seconds on why what I told you over the last few years on fees per room matter, why it is now demonstrated over the last four years. Strong dynamic from all loyalty members enrollment. We have over 10 million new members per year joining our Co-Live Limitless. And I don't know the date, but probably March, we will have the 100 million new Accor member existing. I don't know where that guy is going to be. in Africa or in America or in the Middle East, but we'll find him. And of course, when we find him, he will be a lucky guy because then we'll be celebrating with him. So it's a very strong, vibrant program with a lot of new partnership. And some of you were in Berlin with me before COVID. That was really the objective, to get that program started. better placed, better used, with a greater agility. So it's extremely happy with the team who put all of this together. And then the shareholder return and the 7.5% of market cap, we need to get to that 6% to 7.5% of market cap return every year. And, of course, being consistent upon shareholder buyback. That's a slide that I was anxious to spend time was to show to many of you the last four years. You heard me and many of you were probably a bit kind of tired of my mantra and it sounded like a broken record. And I told the street and I told the financial analyst, I said, please don't talk to me again about the net unique growth. The net unique growth 3.5%. Of course, this is one of the KPIs we gave you. But I've been advocating for the last four years, can we please have a better priority, which is not volume, but which is exactly the reverse, contribution. Do we have a better fee per room for every hotel you open? Because better fee per room means a greater number of absolute dollars, both in revenues and in EBITDA. First time we're showing to you, and I apologize, of course there's a lot of details behind this, We decided not to show to you every detail because then you're going to be asking for more and then the poor guy who's going to have to dance with you is Pierre-Lou and he's going to be doing very well. But we're showing to you what was the pipeline in 2019. That number you have is roughly 210,000 rooms at the time. You have the pipeline in 2024 and it's an up 12% from 2019. But what's so noticeable It's the same pipeline that you knew of in 2019 compared to that new pipeline of 2024. The aggregate revenues that we are getting from the signed pipeline is 90%, non-zero, richer to our course benefit. So then, many of you, page 10, you have the 1,200 fee per room for PME. Page 10, you have the 3,900 fee per room for last lifetime. then you'll do your own math. But I can guarantee you that fee per room for the next five years is going to be increasing by way more than double-digit items when you look at the last four-year period. So that's what it is. It's very important for us because we've been talking. We knew what we were doing. First time we decided to show to you that I guess everything we do actually enriching the quality and the absolute dollars back to your company. Priorities, the first one is no negotiation. 2023, 2027, we committed to you, we committed to ourselves to deliver the 9% to 12% EBDA growth and all the numbers you've seen. Whatever it takes, we'll better get there and we should get there. In order to get to those KPIs on capital market day, well, you'd better be right on where do you want to play. And what you want to play is obviously in region where you have the fastest growth. In region where you have the strongest economy, the lesser geopolitical volatility. And those region happens to be in the Middle East, India and Asia Pacific. Which is why 60% of the openings in 2025 happen to be in those precise region because this is the easiest way to play. And this is where we have a true leadership ahead of many of our competitors. Three, you never know what's going to be hitting you. Of course, you're going to have new conflicts, new uncertainty, new social events. So you'd better adapt. So in order to adapt, you need to build buffers. And building buffers means you need to have a greater operating model efficiencies, agility, and you need to find within your own system what you may not be finding elsewhere. That number three is back to what I said on number one, whatever it takes. And Jean-Jacques, myself, Martine, and a lot of the leaders in this company, they know they have to find efficiencies within their own system, which is probably why AI is going to help us in terms of process and automation. Number four, we talked about it, but now we act. We got... a lot of discussion with the management of ACO Invest, which I have to salute because they've done a hell of a job in 2024 in going back on their feet and having also great numbers and moved away from both COVID and financial debt restructuring. And then we had several discussions with our fellow board members and stakeholders, i.e. partners, investors within ACO Invest. And we've announced to them in the full transparency that we decided to launch the sale of our 30, whatever, 31% stake in ACO Invest. It's not going to be easy. The launch is being decided, has been announced, confirmed to you this morning. It is a 12- to 18-month process because of the complexity of both governance and the assets and the management contracts. So it's doable, of course, otherwise we would not be launching it. But I guess give us the benefit of the time we need to get to full realization. But it's launched, and there is no way back. And finally, the $440 million buyback is – Not anecdotic, we've uplifted the 400 million many of you expected for the year by another 40 million to show true confidence in our ability to reach cash flow targets, EBITDA targets, and certainly confirming that there's no better use than available cash from Accor to buy shares. You've seen the share price performances and the uplift. Whatever you can buy today is certainly cheaper than what you would be buying in a year from today. So feel very comfortable. with the $440 million. Last word, which is not on the slide here because that was not totally done at the time we put the slide together. I just need to thank, and some of you are in the room, I need to thank the board members of this company who basically made a decision yesterday morning at the board approving for the 2024 numbers and recommending to the General Assembly of 2025 the renewal of myself and indirectly the leadership and management team of this company and that will be for another three-year mandate from 25 onwards until 2028 and I can tell you and I won't share with you a lot of the board discussions but I can tell you the principle upon which they've made the decision which is super simple they are very happy with our core performances they're very comfortable with the vision and the business company and We are cognizant that I guess we need to finish and to execute successfully as we start the 2023 to 2027 target. So that renewal is 90% directly linked, put aside the ambition and the vision to finish the job that got started in 2023. So that's where we are with this. I'm going to turn to questions in the room and questions online.

Good morning. Good morning. Sabrina Blanc, Bernstein. Good morning, Sebastian. Good morning, Martin. I have a free question, if I may. I will begin by Accor Invest. So you mentioned that you have launched the disposal. I would like to understand if you have already some discussions, you see already some interest. It looks like that the hotels assets in Europe are something very interesting for a lot of investors. But to have your view on that. The second key question is regarding the 2025 targets. You have mentioned that you reiterate the mid-term targets for 2025, but could we have more columns? You have mentioned, for example, that last year was a very good year with a lot of events. We have more events perhaps in 2025, but smaller, just to have your feeling. And the last question is regarding the key money. It looks like that your competitors have mentioned inflation regarding key money. It doesn't look like it's your case in 2024, but could we have your views for the coming years?

Yeah. I think we should be starting with 25 and key money with Martin because I want to put Monsieur Jean-Jacques Morin on the block for Arco Invest. And I'm doing it on purpose, not because I like the guy, but Arco Invest is clearly a mandate that Jean-Jacques has as a board member of AccroInvest, which I'm not. And he's the one raising with all that different process. So as somebody being accountable and a leader of it, Jean-Jacques, you'll answer that question.

Thanks for the question. So I'll start with 25. Yeah, you're right. We won't have another large event as the Olympics in 2025, but we do have a pretty good pipe of events in 25, so there's going to be some puts and takes, but given where we ended the year and given where we're starting the year, January was also a very good month, we're quite confident that we'll see good momentum in 2025, maybe not at the same level as 24, obviously, but still pretty good. With respect to key money, you're right. We have not, you know, we haven't seen anything that surprises us. And you may recall that when we put the CMD together, we had indicated that we were going to step up our CapEx, recurring CapEx from 200 to 300 million over the life of the plan. And this was really a reflection of the acceleration of development in Max and Lifeline. So lifestyle, sorry. So no, really nothing that surprised us in what we see in the markets.

Good morning, everybody. You know, there is no surprise at us selling 30% or share of AccorInvest at that time because it was always the plan, if you recall, and many of you have been asking us the question, and we've consistently said that we'll do it when it's the right time. It is the right time. Now, why is that? Because, in fact, the performance of AccorInvest is very good. That was alluded by Sébastien and And on top of that, it's recognized by the market. Just the refinancing that was done over the last couple of months has been a huge success. And the debt on the balance sheet has been reduced by more than $1 billion. And the terms on the debt are very good. So it's the right time. And so we're going to just go and act what we always said that we were going to do. Because this is, I would say, where everything comes together, the start of the line. If they're interested, obviously they're interested, because it's a unique portfolio. I mean, the portfolio of AccorNLS doesn't really exist to that size anywhere else in the world, or at least anywhere else outside of the U.S. So it's going to attract a lot of attention. And so, you know, it's going to be a complex negotiation, because it's a complex portfolio. It's a big portfolio. It's a big gross asset value. But it's what we're going to do.

Merci beaucoup.

Anybody else in the room before we go on those waiting online? No, you still have time actually to pop up. So if we can open the line, be lovely.

Thank you. And if anyone would like to ask a question on the telephone, please take it by pressing star 1. And up first, we have Vicky Stern from Backlace. Please go ahead.

Good morning. Yeah, firstly, just wanted to sort of circle back then on your thinking for 2025. So thank you, Martine, for the comments there on the RASPAR outlook. On the net unit growth, I think you'd indicated some of the sort of churn would be reducing as we go into 2025. So is that still the plan and therefore with that thinking about a net unit growth slightly above what we saw last year? And sort of similar question really on EBITDA growth, how we're thinking about the range there. And linked to that, your sort of confidence in the margin growth story that's continuing to deliver on 100 bits or so per year. Are you still as confident on the medium term there, but also specifically how we should think about that for 2025? And then, yes, indeed, a follow-up on Hacker Invest. The 34 million possible further equity injection, how are you feeling about the likelihood of that? And it's probably now maybe the right time to start thinking about how you would think about the cash proceeds from that disposal. Would you be planning for those to come back to shareholders when it happens, or have you got any other intentions? Thanks.

Okay. Can't wait to see you tomorrow, Vicky. So we'll start with the REVPAR and the BDA growth and so forth, and then we'll go back and forth between Martine and myself. It's absolutely true that on the net unit growth for 2025, We had anticipated an exit of some of the ACO Invest portfolio going from management to franchise or being deflagged. That was kind of the breathing room we had structured together four or five years ago, so no surprise here, those numbers you know. They've been delayed from 2024 to 2025 because of probably other priorities for our co-investors. Those will be undertaken and deployed in 2025. So you'll see a drop of the net unit growth in PME because of those exiting of those hotels that we anticipated when we've done the capital market day, but it's a delta between 2024 and 2025. I don't know the precise numbers. I don't know whether we want to go into the precise numbers. But that is really the only impact of NetUnit Growth for PME, AcroInvest 95% related. And there's no slowdown in NetUnit Growth for Lux Lifestyle. Ref Bar, we're not going to go in greater details than what we've been projected into the Capital Market Day. And all the benefits for you guys and for us. You have STR data every week passing in every geography, so you know that the REVPAR for the month of January was actually pretty solid across the globe for our core. So we'll go probably in greater details in the different one-on-one with all the investors, but we're not going to go on precise numbers, and we're going to work like you every month passing. ABDA growth, same thing. We said 9% to 12% growth per CAGR in between 2023 and up to 2027. CAGR means it's average, and some years you're going to be at 12% as we are enjoying in 2024, and some years you're going to be probably a bit lesser than the 12% depending on market environment and many other aspects. The only thing I can confirm to you is on average for 2023 to 2027, if you want to have a precise number, we should be up 10%. kind of actually on an average number in between 23 and 27. Some great years, some less great years, and hopefully for me, why not? Surprising ourselves and surprising you on getting to an even better number than the upper end of that 9 to 12%. Margin growth, yes. We committed that in order to get to the ABDA growth, you need to have a better margin being built into your system. Because you may not have the REFPA environment that you want to benefit from. So it's a must. And it's not only PME, by the way. Within the own PME and Lux Lifestyle, we need to execute upon this 100 basis points every single year in between 2023 and 2027. And when it comes to the cash proceed, the backstop on Accor Invest, we don't see any further money needed from Accor to... basically meet the backstop that was done seven months ago, defined with the asset program. So we'll wait until probably the end of the summer of this year. But as of this minute, we don't anticipate. And I hope I'm right, Jean-Jacques, on this one.

The disposal program is going exactly per plan, so there is no risk on this one. Just on the NAG, to be precise and crisp, the NAG of PME will be higher next year than it will be this year. And all the commands that Sébastien made on Charm are proper, but the NAG, the net number, will be higher in 2025 than it was in 2024.

Gosh, I was trying to protect you, and you didn't take it.

No, no, I mean, listen, I... That's fine. It's even better for me then. Thanks a lot, Jean-Jacques.

And for the cash proceed, we haven't changed... Our mind and commitment, the vast majority, if not the entirety of any co-invest sale should be used as going back to the shareholders. So I am not committed with that number should be 75%, 80%, 90%, 100%, but the vast, vast majority is of course coming back to the shareholders. You've been asking us to be boring and discipling. I cannot prove it to you otherwise.

That's great. Thanks very much.

Well, it's great to be boring. Okay, I'll see you tomorrow.

We like boring.

Thank you. And we move to our next question now, which comes from Jamie Rollo from Morgan Stanley. Please go ahead.

Thanks. Good morning. Three questions as well, please. First, a bit of a boring one, but there's quite a few moving parts in the year. The EBITDA line, Martine, you talked about the end of the incentive fee exemption, which affected second half. We had the holding costs also jumping up in the second half. And the first half, you had the sort of super high residential fees. Can you please sort of quantify all of those and help us understand the bridge to 2025? Secondly, coming back on Accor Invest, can we assume there'll be no change to the existing HMA agreements with Accor? So none of the sort of fee transfer that we saw at the original transaction six, seven, eight years ago, except for the hotels being deflagged, as you mentioned earlier. And then finally, a bit of a sensitive one, Sebastian, but just thank you for ending the will he, won't he debate on your CEO chairman term. I mean, is this simply about meeting those targets and exiting Accor Invest, or is there anything else you'd like to do to close the valuation gap to your peers? Thank you.

Okay. The first question is a tough one, so I don't know whether you want to go into all the details, Martin, but I won't take that one.

Hi, Jamie. Sure. So let me start with the, yes, there are a couple of moving pieces. I'll start with the holding cost. So yeah, there was an uptick in the second half that was more related to the baseline of 2023 for the second half where we had some favorable one-off and we also had some project costs falling into the second half of this year. So you had a bit of a Now, what I would say is that the cost that we have in the second half is probably a good indication of where our run rate is. In terms of the residential fees, we had a really strong first half, and overall our residential fees revenue is significantly up in 24 versus 23, but it was lopsided. It was more in the first half than the second half. I'm not going to give you an exact number for 25. But we certainly expect that revenue stream to continue to grow, albeit not at the same pace that we experienced in 2023, but certainly no headwind there.

Jean-Jacques, are you going to go back on AcroInvest and the no change in the management fees? How do you anticipate all this?

You know, it's the beginning of the process. So we'll see how the negotiation goes. As every negotiation, there are give and takes. But obviously, the principle is that we're not giving away any fees on the HMA as a principle. Right? So we'll see.

I know that I regret to have you take the microphone. No, it's fine.

On the last question, Jamie, on is there anything else than the Capital Market Day? Yes, there is. I'm going to share with you, and I guess with each of you, but I would do so anyhow in the next 10 days of roadshows, so I might as well be done globally. There is... five different undertakings that I guess I would love to finish and that I feel are necessary for the group for the next three years. The first which is of no surprise is operational excellence. We need to be better at what we do. And of course, it's 100% linked to the capital market day. We need to get the cost to a better level. We need to get the brand's value shining better. We need the distribution to be stronger. We need the AI tool to come in. We need the margins to be improved. So there's a lot of things that I guess we haven't finished, which is being undertaken now. And it takes two to three years to basically get that job done. Very critical because this is a buffer that I guess I want this company to have built in to sustain any storms. Number two is go faster in selected geographies in which we have today either leadership or we should be the leader. And those geographies, our core is probably better equipped that many of our competitors, because they're further abroad and they don't have the same history and the same relationship we have with many of those different owners of government officials. And I won't be surprising you when I say that I guess it is clearly going into South America, China, India, Middle East. Those are the fastest growth geography in which we are good. We know exactly how to maneuver, we know exactly how to grow, and we've been proving over the last four years that we gain leadership and we just have to go stronger, firmer, quicker. And I'm spending a lot of time, if not majority of my time, in those four different geographies back and forth every week of the year. The third is AcroInvest. We need to get AcroInvest done, but I am clear with you and you heard me for the last 10 minutes. That execution is absolutely empowered by Jean-Jacques, and I have no fear that I guess it's going to get done, but I just want to make sure that if he needs my help to get it done, we were the one, and I guess I was the one who brought in five years ago those sovereign funds from GIC, PIF, Amundi, and many others. So I am also responsible. These are our co-partners. I guess we do that smoothly and as a mutual benefit for absolutely everyone. Fourth is Enismore. Enismore is an incredible machine doing very well. We have commitment with our co-investors within Enismore. That structure was also put together at the time by the current management team and we need to go probably for a different, even greater step in terms of Enismore growing even faster. And number five, talents. This company has many talents in all over the world and geographies. Those are great leaders. They can be even stronger. It's called grooming. And that job also has to be done. And I'm also responsible for making sure that the team would be fully prepared very soon to basically lead this company. You could have an outsider to come and lead this company. But those are the five priorities that I guess I've been expressing to many of you internally, to, of course, the Federal Board members, and to you as outside investors analysts the last five minutes.

Thank you very much. Just to end this small, does that mean you're looking to buy out the minority stakes? And how does that square with the acquisition comments earlier?

The answer is very likely no, because I've been saying to you that I don't think this is a proper solution to buy the outside shareholders, because I also said to you, and I'm going to be repeating myself, but at least give me the benefit of being super coherent over the last few years. I don't think it is a right decision for Accor to own 100% of any small. Were we to do so, I can guarantee you unfortunately that many of the lifestyle companies being owned 100% by existing operators are usually fading. Lifestyle needs autonomy, needs greater independence, needs agility. You can't grow it as fast if you have it 100% owned by Accor. So that autonomy, that different common investors' governance is super helpful on basically getting them to where they want to be.

Thank you very much.

Thank you. And up next, we have Muneeba Kayani from Bank of America. Please go ahead.

Good morning. The first question, just on signings, I think you said 11%. Could you give more color of that by region segment and kind of what's been driving that strong growth? Then secondly, there was news of a sale of the F1 brand. Can you talk a bit more around that? And then on China, you just mentioned that being a focus area. So two things on that. Firstly, how are you thinking about China this year? Could respite turn positive? And then secondly, would you change how you operate in China? Thank you.

Sorry, Monique, signing. I won't go back in greater detail on this one except saying the evidence in which you've been noticing over the last few years. Yes, we have better fees when you come to countries like the Middle East. in Singapore, so clearly we are going deeper in those geographies with actually a better feed per room. And true, it is also growing faster when it comes to Lux Lifestyle than it is for PME. PME is growing faster because they actually basically cleaning the portfolio and exiting some very low-fee income properties so the average gets better. So it is very much linked to geographies and links to increasing our share in Lux Lifestyle segment and restoring better openings compared to the existing PME portfolio. That's what it is. There's no magic about it. but it just needs to be implemented and stick to the game, which we started, by the way, five years ago, which is why that 90% is extremely impressive. Formula One, it's being announced. We are discussing. We have unclosed, so there's nothing I can tell you in a private conversation, but I guess we are comfortable that we're going to get to where we want to get. And China, it's... It is clearly a discussion being undergoing with our China team, and you know we have an enormous benefit. Accor is very, very, very close to the two largest China hospitality player by far. The one is called Jingzhong, state-owned company, Shanghai-based, and you know Jingzhong has been a happy shareholder of Accor, and still is a shareholder of Accor, and we have privileged relationship. with the entire management team of Jinjiang over the last five years, and number two player in China called Waju, which is entrepreneur-led, Chairman Qiqi, which we own 11% of his company, where I was a board member, and we also have a very strong relationship with Qiqi. So whatever we do in China, I can only tell you one thing, we'll do it with open eyes, with the proper and the best partners.

Thank you. Thank you. And we're moving on to the next question from Alex Brignall from Redburn Atlantic. Please go ahead.

Good morning. Thank you very much for taking the question. A couple on your growth, and obviously trying to keep away from net unit growth, which you're not focused too much on. But you gave a very interesting detail in terms of fees per key within your pipeline. I wonder if you could tell us, how quickly you expect that 70% higher fee per key to manifest on the P&L in terms of, you know, do we need to look at a couple of years or should we start to see it even in 2025 numbers? And then obviously the big focus of this result season has been fee money or kind of very low revenue deals and therefore fee growth not meeting net unit growth plus rev path. I guess, could you give us any detail on how you think about that? Obviously, key money is not something you pull the lever on. You also haven't done any of these sort of partnership deals with very little revenue contribution. But when you look at the outlook for your growth, are there opportunities to do these partnerships? Have you looked at them and turned them down on account of them having bad terms? How do you think about that opportunity? Thank you.

I'm smiling because I did not give you that 70% growth in the fee per room that you just thrown at me. But I guess I did tell you he was a double digit or a big fee per room growth, but you must have made some estimates. So you're correct, that number is incorrect, but you're correct, it is very significant. And you're also correct, I need to gauge better but it's probably, for me, full... impact on our core numbers in 27 onwards, between what you signed over the last few or four years, signing to building, of course, thank God we have a 54% conversion rate today on the opening. But it is a two-year lag to get the full benefit of what's being actually signed and built in. So it won't be in 25. You're going to see bits of it in 25. I don't know whether you have an assessment, Martine, but I guess I... I would say probably 10% in 25, you'll see 30% in 26, and you'll get probably to 70% in 27 and the last balance in 28. And that could be deferred by one year depending on market conditions and the time and pace for the owner to build that inventory. So it's a tiny bit in the last leg of 23-27 numbers. but the most impact would be probably the 28 to 30.

Again, Martin, you can jump in. It takes about three to four years between signing and actually opening the property, and then you have a couple of years of run rate, so it's really going to be more in the medium term. One way to think about it is, You know, you saw the PME M&F fee per room was actually quite stable, 24 over 23. L&L was up about 100 euros, which is about a point. So it's definitely going to materialize, but it's going to be more in the medium term. You'll see some impact every year, but it's going to be more in the medium term. And maybe I'll take your question on key money. Again, you know, we're not, a couple of points on that. One is when we, key money is mostly in luxury and lifestyle space. And when we do key money, we do that with a fee per room, which is about, you know, 20, 20, 25% higher than no key money, right? So it's definitely a credit. And we also do that when we have a contract that is longer, than for a deal with no key money. So we're very, very disciplined on where we invest our capital when it comes to signing deals. And again, we haven't seen anything that is not what we expected. when we put our 23-27 plan together. And as we said, you should expect that over the life of the plan, our CapEx will go up, as we said, from 200 to 300 million by the end of the plan period, which is 27.

And we've been shying away, turning down any discussion with those big partnerships. that you have seen elsewhere, precisely because we're not driven by net unique growth, kind of actually numbers that people are looking forward to get. And it was certainly unnecessary for us and unwise to do those big partnerships and the numbers being talked about.

That's fantastic. Thank you. I guess on the number that you said I didn't have, I just divided 1.9 by 1.12 from... from your presentation. Maths aren't necessarily my strong suit, but I think I could.

You've got to have fun, which is why poor Pierre-Lou, you've got to have fun with him. Thank you so much. You're welcome. Thank you.

Thank you. And from UBS, we now have Gerard Castle with our next question. Please go ahead.

Thank you. Good morning, everyone. Three as well. Can you just talk about kind of development of incentive fees and... you know, how you see some of the pressures maybe on them this year, as you kind of did highlight inflation, although, you know, uncertainty around that. Secondly, I mean, just looking at the accounts, I mean, Accor Invest saw quite a big jump up from around 600 million euros on your books to 850. Can you maybe just talk a little bit about what drove that? And, you know, is that kind of a starting point for Any negotiations, or should we just ignore that as an accounting assumption? And then just lastly, you know, I actually asked this question also to the CEO of IHG, but just on climate change, I mean, you know, kind of highlighting that quite a lot. I was just wondering, you know, are you concerned about any hotels and locations which could be very adversely affected by climate change, you know, either through floods or lack of access to water or fires, and if so, could you maybe quantify how many hotels across your portfolio you would see which are in areas which might adversely be impacted? Thanks.

So thanks for the question, Jared. On incentives, and I guess what I can tell you is that we've actually seen a stable gross operating margin at the hotel level, so they've been able to offset any effect of inflation, and we don't see signals, certainly looking into the next 25 at least, We don't see them not being able to maintain that offset. So no concern on incentives per se. On Ecolinvest, the value of the balance sheet is $850 million. You're correct. And that's really a function of the capital injection we did as well as the fact that we had a sizable net income from Ecolinvest. But that's an accounting value.

And on the climate chance, we do have assessment of the risk natures that we do every year as part of the... sustainability report, CSRD audit report. Climate change is certainly in the top five kind of actually priorities in terms of assessing better. We don't have a precise list of the hotels who could be impacted. We haven't done that yet. And I guess it's probably be a good thing for us to look at it that way. But of course we have an assessment on geographies in which we have water shortage and fire hazard. What has been decided almost three years ago on those typical regions where we know they could be the most impacted to stop or slow down development. And that's true for some islands in Greece that I alluded to, like in Mykonos, where we decided not to open two hotels, which were meant to be built. And same thing for fire hazard geographies in which we're no longer building anything. because of those existing risks moving forward. So we will get back to you probably on this one. Maybe not in a granular way, the way Intercon has done, but I guess we are acutely aware of those risks and those impacts.

Thanks very much. You're welcome.

Thank you. And up next now, we have a question from Jaina Mistry from Jefferies. Please go ahead.

Hi, it's Jaina Mistry. I've also got three questions, if I may. I know you don't want to talk about net unit growth, but obviously it is one of your KPIs, and that's the rationale for me asking. You talk about averages in terms of your medium-term algo. And if I'm looking at the last two years, your net unit growth has been at the lower end of your targeted range. Would that mechanically imply that from 2025 to 2027, we should see a net unit growth number at the higher end of your range, somewhere between 4% and 5%. And then my second question, also partly related to net unit growth. When I look at your luxury and lifestyle pipeline, it implies a net unit growth that still is below your medium-term guidance. And I think this is driven by luxury. Could you just give us an update on your luxury strategy strategy and how you plan to accelerate the pipeline here and any progress you've made in the last 18 months here. And then last question, I noticed in your answer to your things you can do with the business over the next three years, I noticed that you didn't talk about a potential spinoff of one of your businesses. Is this a change in the way you're thinking about the business or would a spinoff still be on the table? Thank you very much.

I don't know whether I like or whether I hate those analyst questions because you're getting very granular in many things and you're rightly doing so. On a net unit growth, you are Absolutely correct. I just want to basically put things in perspective. You understand we started the capital market day for 23 up to 27 onwards with a new organization, with new leadership, i.e. with new vision in terms of what they inherit in terms of one portfolio, be it the four CEOs for PME and the four CEOs for Luxon Lifestyle. And then we're being very transparent with each of you and internally as well by saying we need to clean an existing portfolio which was not to the level expected and we have so-called detractors. Detractors is an existing hotel on an existing brand where you don't have the performances you wish, you don't have the design that the brands deserve, you don't have the right operational metrics and you may be in the wrong location. That's called Pure as a project for Accor, which is really dissecting each of the hotel of each of different region is a different brand. And we gave full authority to those eight new CEOs to precisely clean and exit those detractors hotels because the worst is to keep them forever. It's impacting your brand positioning and brand experience. So that has been undertaken in 23. in 24 and there is still a bit left to be done in 25 and 25 of course some of it is related to ACO Invest. ACO Invest is exiting those hotels precisely because they are very low performers. So that is the first three years of 23-27 which is why you see the net union growth being at the low end and you are also super pertinent when it comes to Lux Lifestyle Those luxury brands being Sofitel, M Gallery, and Raffles, and of course, Fairmont. Yes, they also go into the exact same process, which is to clean an existing portfolio and exiting some of the portfolio and reviving a new brand promise, a new brand standard, a new brand vision, certainly when it comes to Fairmont. So, yes, there is a lag effect between a slow to mediocre growth in between 23, 24, and tiny bit in 25, and you're going to see a much faster growth, which is a result of that plan being envisioned and executed in the last leg of 26, 27. No surprise for us. That was built that way, and it's going exactly on process. The spin-off, I didn't talk about a spin-off. I talked about how could we basically get a greater appreciation, greater value, and greater autonomy, and a greater growth pace for any small, which deserves it entirely. And we'll go back to you in due time when we have clarity on what are the right solutions to get to where we want to be.

Thank you very much. You're welcome. Thank you. And now our next question comes from Jafar Mestari from B&P Paribas Exxon. Please go ahead.

Hi, good morning. I have three, if that's okay. Firstly, if you could go back and maybe elaborate a little bit more on the comment you made on luxury and lifestyle determination of incentive fee exemptions, specifically Sophie Tells and specifically Fairmont and specifically in France. What are the exact mechanics here? And is it a one-off impact in just H224? Or is this reducing fee revenue and it's a new base and in H125, it'll still be here and annualized? And then secondly, on operating leverage, I assume that luxury and lifestyle incentives points will be part of the answer. But can you explain why in simple terms, when you deliver Ref Bar above the top end of your guidance range for the year, APDA does not end up above the top end of the range as well. And lastly, on net openings, we've talked about luxury, which is 3%. There's another angle here, which would be, I guess, the Americas, and I'm guessing North America specifically, was basically zero. I don't think we have a pipeline number for the Americas in the documents yet. But is it a similar comment, that there's some cleanup of the portfolio and it'll just pick up naturally? Or do you need to run the U.S. differently? Is it invest more in sales? Is it find partners, find the master franchisee, find portfolio deals? What do we need to see to see a step change in North America, I believe? Yeah. Do you want to go on the first two?

Right. Hi, Jeff. So on the comment on the incentive fees, it's really, in some contracts, it's really so futile. We had waivers for a couple of years on post-COVID basically on incentive fees, and that waiver period just basically ended in 2024. So it's now part of the baseline, if you wish. In terms of operating leverage, if I look at the luxury and lifestyle, M&F revenue growth in that segment was up 11%, and the M&F EBITDA was up 12%. And really, this is a function of the fact that that division was very much still – in a ramp-up mode in 2023. And so, you know, we didn't have the full cost base or the full investment base in that division in 2023. Not obviously the case as we exit 2024.

And, Jaffar, you are correct on the net opening when it comes to North America. It's not a question of management team. It's not a question of focus. It's a question of one step at a time. The first step was settling in America, clean, sit down with existing owners, understand what might have been done wrongly either from our core over the last years and in terms of owners' lack of appetite to invest into that product and destination. You know we have mostly two brands of size in America, Sofitel and Fairmont. We have actually had a new opening, Raffles Boston, which is a great success. So there's a lot of ongoing discussion on first basically getting into the existing hotels of Accor and cleaning up the portfolio before we reopen a new hotel on that brand. I can only guarantee to you that, and it was actually only three weeks ago at Alice, the hotel conference in Los Angeles, we have seen a lot of of owners' appetite, partners' appetite, private equity appetites for Fairmont, for Sofitel and other brands of alcohol in North America. So North America is a priority in terms of expanding the existing network. This is a market where you have a very significant fee per room and margin, and of course a lot of stability. This is also a market where we also have to be prudent and get better, as you alluded to, on our own distribution system. Loyalty system of our core is not as strong in North America that it could be in other parts of the world. So piano mezzo. Go there. Make it a priority. But don't be fooled on what you do, again, on over-promising and not delivering. So it's... But you're right. We are not exiting America to the country. But we are just reattacking America for the last 12 months with a new leadership. America with a new great office in New York. And Maud is spending a lot of time today on Sofitel with a lot of new works being undertaken at Sofitel New York. So it's only a question of patience and basically finishing what got started 12 months ago. So no worry on this one. And we have our eyes on it.

Thank you. And if I can just clarify these points on cost investments in luxury and lifestyle, presumably that was part of the plan and you're expected to ramp up those costs in 24. So I guess my question is really that was embedded in your guidance. You then beat on your REFA guidance above top end, but you do not quite beat on your IPTA guidance. So I was asking if there were any surprise investments, or maybe it's just FX. Is there anything that wasn't expected?

No, I mean, Jeff, that's why I commented on the revenue growth, because if you look at the M&F revenue growth, it's slightly less than the REVPAR plus net unit growth, and that's really a function of FX in Turkey and in Egypt primarily.

The FX number, I think I'll say it loudly, FX numbers for our core for 2024, I think negative 22 or 25 million.

On EBITDA, yeah.

On EBITDA, huge number.

Thank you very much. Two points on revenue at group level, but higher on a lesson lifestyle.

And on EBITDA. Thank you.

Thank you. And from Deutsche Bank, we now have André Julliard with our next question. Please go ahead.

André, you may be the last one because we have three minutes to go. So make sure you don't have three questions.

They will be very short. Good morning and congratulations for the results. First one, maybe to come back on the operating leverage. I understand the gross target, but could you give us some more detail on a potential target, final target on the uprising leverage? Because your margin is around 20%. You were slightly above in 2019. I don't know if the comparison is fair. But could you give us some more visibility on what you could expect in the midterm? Second question on the tax issue. France is very volatile, but do you have any visibility for 2025? Third question, happy to have you for the next three years, Sébastien. Does that mean that Jean-Jacques and Martin will be with you for the next three years? And last question, if I may, on AccorInvest. IPO or private deal. Thank you.

I'll start with the easy one, André. Do you have a view? Should I keep Jean-Jacques and Martine?

Yes. Okay, then. Yeah, I have a view.

The team that we have at our core and around me is extraordinary. So we have no intent to really change a team and we're battling, tackling together happily so.

You want me to take the other questions?

No, no. What was the last question?

Operating leverage, I'll give it to you for sure. Hello, André. So operating leverage, look... Our CMD algorithm is 6% to 10% M&F revenue growth, 9% to 12% EBITDA growth. That means that we have to get between 100 to 150 basis points per annum of margin accretion. And it's going to come... but it's also going to come from hotel assets and other, which is a portfolio that has significant growth. And we do expect, and we've seen that in 2024, we do expect operating leverage in that division as well. I think you had a comment on tax. Look, we're quite happy that France finally voted its budget. In terms of the new tax code, there's really no change from where we were a couple of months back. We're still looking at a – there will be an impact, but overall, between share buybacks and the exceptional tax on income tax, you're looking at roughly 10 million euro overall for the group, and half of that is income tax, and half of that will be share buybacks, so relatively de minimis.

And on the ACO Invest, whether it's an IPO or something else, there's – There's no exclusion. There's no taboo. There's two things that I guess we want to solve. Number one, we need liquidity. We want liquidity out of this investment and a better use of the cash invested. So that's clear, which is why we started this process of selling, exiting the 30% we have. And number two, we need that. solution to be fully onboarded by both management team of ACO Invest which we owe them quite a bit in terms of having navigated superbly through the storm and to fiduciary duty relationship trust who's been built in with all the stakeholders of ACO Invest being Colony, Amundi, PI, FGIC those are institutional players and we're never going to be doing anything that's going to be damaging them in ACO exiting so full transparency alignment and whatever the best solution is if we can actually get to the two undertaking I want okay thank you very much it is exactly 10 o'clock so merci beaucoup thanks a lot for all of you who've been connecting yourself to this session and then we'll see many of you physically in the next 10 days well enjoy a wonderful day