Accor Sa

Welcome to the ACOR half-year 2026 results presentation. Today's conference will be hosted by Mr. Bazin and Martine Gerow, Group CFO. For the first part of the conference, the participants will be on listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. Now I will hand the conference over to Mr. Bazin. Please go ahead.

Well, good morning, everyone. Very happy to have you all for the first semester results. I'll do the conclusion at the end. I'm going to let the floor to the best of us to Martine as Chief Financial Officer. She's going to guide you through the results and comments, and then we'll go straight to conclusion and Q&A. But at least thank you so much, each of you, to actually being on the phone with us. Martine.

Thank you Sebastien. Good morning ladies and gentlemen and again thank you for attending our earnings poll for the first half. So I will kick off on the financial highlights on page four. So following a very strong start of the year, the situation in the Middle East has impacted our trading in the second quarter. But to note that the performance in other regions remained very solid. We activated in March a profit protection plan, which has enabled us to largely offset the impact of the conflict and deliver a very steady set of results for the first half of 26. The operating performance is contrasted across regions, but did improve throughout the quarter, adjusting for the hash calendar. Q2 Ref Bar came in at minus 0.2%. Now, that is a headline that masks two very different situations outside the Middle East. Q2 REF PAR was up 3.3% driven by both pricing and occupancy, which demonstrates the continuous strength of demand and the attractiveness of our brands. In the Middle East, REF PAR was down 29%, driven by the UAE, which was down 67% in the quarter. As other countries, which is Egypt and Saudi Arabia, namely, posted positive REF PAR growth in the mid single digit. We exited the quarter with a marked improvement in the UAE and an acceleration in other regions, notably in Europe. This drove our H126 ref bar growth to 2.2% and 4.6% excluding the Middle East. Room revenue growth was driven by both business and leisure, with individual leisure travelers and business groups growing in the mid-single digit. Net unique growth was 3.2% on our last 12-month basis, with limited openings in H1 and some churn in our Germany Revo portfolio as well as in China. Pipeline growth remained very healthy at 11.4% growth over the last 12 months, supporting an acceleration of NUG going forward. Signings also grew at a strong pace. Moving to financials, we adapted very quickly to the geopolitical events, producing a solid set of results. MNF revenue was up 4.8% at constant currency, reaching 685 million. That's a solid performance. And MNF EBITDA was up by 9.1% at constant currency. which is a 280 basis points margin improvement. Total revenue was up 3% at constant currency and 4.8% on a like-for-like basis when we adjust for some disposals in Paris society. And total EBITDA was up by 6.5% at constant currency and 7.4% on a like-for-like basis adjusting for scope. FX had a negative two points impact on group revenue and four points on EBITDA and was concentrated in the first quarter. Based on current rate, we expect EBITDA to turn positive in the second half. Scope impacted revenue by two points in the first half and EBITDA by one point. Recurring free cash flow reached 194 million, that's up 42% versus prior year. and we delivered strong shareholder return year to date at 541 million, which equates to a 4.8% return, bringing total return to shareholders over the last three and a half years to 2.6 billion. Actually, by the end of 2026, when we factor in our second transfer share buyback, we will have returned 2.8 billion two shareholders with dividends and share buyback in the first four years, which puts us in line of sight of the 3 billion return which had earmarked in our capital market base almost a year ahead of schedule. Let's now move on to the second quarter REF part for each division on slide five. PM&E posted a flattish REVPAR growth of 0.1% driven by pricing. In the quarter, average rate was up 1% and occupancy rate was down 1.68% driven by the Middle East. Excluding the Middle East, REVPAR was actually up 1.1%. In Enna, Refbar was also flattish at 0.2%, driven by pricing, stable occupancy year over year. Our three largest countries report actually very different trends. France and the UK posted low single-digit Refbar growth, while Germany was negative. Now, we did note that trading improved in June in all three markets, with Refbar in the low single-digit to mid-single-digit. In France, in the second quarter, Refbar was in line with the first quarter, although more driven by the province, with strong and steady leisure demand. In the UK, demand was also sustained, notably in London, confirming a solid low single-digit Refbar growth. In Germany, demand softened in April and May, but improved in June, with a positive Refbar in June, driven by a more supportive event calendar. In Mayapak, Q2 REF PAR was down 1.1%, impacted by the conflict, with significant decline in occupancy and rates in the UAE. Excluding Middle East, REF PAR would be up 1.9%, driven by UAE, as Egypt and Saudi Arabia were up in the mid-single digit. Southeast Asia remains a growth engine for the region, with REF PAR in the mid-single digit territory, with notably Good performance in Japan, in Vietnam, and in Indonesia. Pacific slowed down somewhat versus the fourth quarter, reporting a flattish REF PAR growth due to lower international traffic and lower consumer and business confidence. In Mayotte, obviously, impact of the conflict. Mayotte was down in the low teens in the quarter. The negative performance, again, attributable to the UAE. The UAE REF PAR decreased significantly. in April in the mid 80s, but improved since the declining in June in the UAE was only in the 40s. Saudi, Egypt and Turkey continued to perform well. China stayed in low single-digit negative territory. Supply growth is leveling off, so the industry should be at or near the bottom of the cycle, but RevPAR recovery is actually highly uneven, and there is clear underperformance of the mid and eco segment, which is where most of our portfolio sits. In China, to note that recovery is already well in place in luxury since the fourth quarter and continuing through the second quarter with positive ref bar growth. America's posted mid single digit growth with Q2 ref bar up 4.8%. Region remains driven by Brazil. Turning to luxury and lifestyle, Q2 ref bar decreased by 1.4%. led by occupancy and red decline in the Middle East. Excluding the Middle East, luxury and lifestyle ref bar would actually be up by 9.4%, which is in line with the first quarter and confirms the healthy demand for this segment bar the conflict. Luxury reported positive ref bar growth of 2.5%. Excluding Middle East, it would be up 9.1%. All brands, all regions, again, reporting growing REFBAR outside of the Middle East. Europe and Noram demand were particularly robust with excellent performance in Noram, in Fairmont and Raffles. Lifestyle is a segment which is the most impacted given its larger exposure to the UAE. which weighed down on REF PAR, which is down 11.3%. In the quarter, excluding Middle East, REF PAR would be up 10.3% for lifestyle. And within lifestyle, resorts were the most effective. Lifestyle collecting was actually only slightly down due to its larger presence in the Europe and U.S. Let's now turn to slide 6, which breaks down our portfolio and pipeline by division. PME grew its network by 2.6%, the pace of openings remained steady, and pipeline grew a stellar 12.7%, reaching 28% of the PME network, which is up 3 points from prior, and confirming again the attractiveness of our brands. PME signings grew by 10%. The sequential slowdown of the NAG results from, as I mentioned in my introduction, some churn in the rebel portfolio in Germany, as well as the equity segment in China, where we see some hotels actually closing down due to the lower activity level, particularly in the second and third tier cities. On the right, luxury and lifestyle portfolio grew by 6.8%. That's driven by any small pipeline growth picking up from the first quarter at 7.4%. Now, we did transfer the Joe Angel portfolio in H1, which impacted the nug of luxury and lifestyle by about one point. So if you look at the underlying luxury and lifestyle growth, it's closer to 8% on the LTM basis when we adjust for that transfer. It was marginal, obviously, on PE, which is a There were fewer openings in the first quarter, sorry, in the first half. There were more concentrates in the second half. Some openings in the Middle East were actually pushed to the second half. As we expected, churn was lower compared to prior. Some notable openings of the second quarter include Raffles, Jetta, and Orange Express in Venice. Pipelines, still very healthy, stands at 46% of the networks. That's also up one point from prior year. And signings grew by 39% in volume. At group level, net tuning growth reached 3.2% over the year with an accurate mix. Newly opened hotels will generate fee per room, which is approximately twice as high, so 2x, as fees generated by churn hotels over the last 12 months, as you can see on the box at the bottom of the slide. Versus last year, pipeline is up 11.4% at group level in volume, and group signings in volume are up 13%. And conversions still represent more than 55% of our openings. That's quite in line with last year. Now let's turn to slide 7 with revenue by segment. The revenue by segment and by division is actually provided as we always do in the appendix and in the press release. The group revenue reached 2 billion 760 million in the first half, that's up 3% at constant currency and it's up 4.8% adjusting for the scope effect from the disposal of Ferris Society. Festive. Again, FX and scope impacted revenue by a negative two points each, lowering the reporting growth to 0.6%. FX impact concentrated in Q1, and again, expect FX impact to be positive from Q2 onwards. M&F revenue growth up 4.8% at constant currency. That's in line with the algorithm at group level. Hotel assets and other revenue is down 5.4% at constant currency and up 0.8% adjusting for scope. Paris Society, Rika's restaurant activity in Dubai was highly impacted in the first months of the conflict, although trading significantly improved in the later part of the second quarter. SMDL, which is sales, marketing and distribution and loyalty revenues, were up 4.7% at constant currency, which is pretty much in line with MNF revenue. And to note that our loyalty contribution was up almost four point in the first half, year over year, and we reached 121 million members as of June. Turning to management and franchise revenue by segment, on slide 8, which grew at 4.8% in the first half, Q2 M&F revenue was at 1.6% at constant currency, impacted by lower incentive in the Middle East as well as flip to franchise, a point we have commented in the previous quarters. Residential fees were stable in the first half, as we expected. PME MNF revenue was up 0.7% at constant currency, slightly higher distortion related to the switch from management to franchise, as we've called that before, which is about a one point negative impact on growth and also lower incentives due to the conflict in the Middle East. And as a result, the distortion is more pronounced in the second quarter than in the first quarter. Luxury and lifestyle MNF revenue grew at 12% at constant currency, that's slightly above REF-R. Q2 MNF fees were up a solid 9%. That segment is also impacted by the lower incentives in the Middle East, but we also had, as we call that, some termination fee in the first quarter, which helped offset. Now let's turn to EBITDA on slide 9. The group EBITDA reached 563 million, that's up 6.5% at constant currency and up 7.4% adjusting for scope. We showed adaptability, we showed strong reactivity to navigate what is a challenging global environment. The reported EBITDA growth at 2.1% include a negative FX impact of 23 million, again concentrated in Q1, and we expect FX to turn positive in the second half. As for M&F, where more detail by division are provided in the appendix, EBITDA up 9.1%, strong margin improvement resulting from the profit protection measure implemented as of March and to a lesser extent some termination fee. We expect the full year M&F EBITDA margin improvement to be above our annual guidance of our 100 basis months. Both divisions improved their M&F margins. As for hotel assets and other, EBITDA growth is impacted by the conflict in the Middle East combined with Scope, which accounted for negative seven points in the first half. As for SMDL EBITDA was at 8.3% at constant currency benefiting also from profit protection measure with an 8% margin and we expect SMDL EBITDA to be balanced between H1 and H2 and we expect fully a margin to be above our 6% plus guidance. And finally to note cost of the holding are down slightly with again strong cost containment measure. Moving on to the P&L on slide 10. In H1, we achieved an adjusted net profit of 231 million and an adjusted EPS of 83 cents, flat versus prior year. Other income and expenses at a negative 130 million in H1 included amongst primarily a 44 million valuation adjustment on our S&D stake, which reflects the time value of the Earn Act, which we expect in this transaction, and I'm sure you've all seen the press release we just issued. And 37 million restructuring costs, this is mainly in the European region, and that is to support the move to a more franchised model. DNA was flat in the first half. Share of net profit of associates in the JV minus 37 million. Slightly more than half of the losses related to S&D, which has reported lower capital gains on disposal and high impairment losses in the first half. Net financial expense driven primarily by a high gross debt. The cost of debt remains very reasonable. Income tax expense is flat. ETR is also flat if you adjust for non-recurring item, which carry a significant lower We expect the four-year ETR to be broadly flat. Minority interests are down year over year, and this is due to the lower profits in the Middle East. Turning to cash flow on slide 11, recurring free cash flow reached 194 million. That's up 42%, reflecting a 34% cash conversion, which is about 9 points above prior year. Four main highlights. Cash interest increased, as we expected, driven by the increase in debt level, but notably an additional bond we issued in 2025 with the first coupon paid in H1 of 26, as well as lower interest income. So H1 is pretty, I would say, representative of what the second half will be. Cash tax decreased from 121 million to 85 million, mainly driven by a tighter monitoring on installments between H1 and H2, and we did accelerate refunds in France. And we expect our four-year 26 cash tax to be broadly stable versus prior. Recurring investment were below last year at 93 million. We controlled CapEx in what is a challenging geopolitical environment. The key money was also lower in the first half. For the full year, we continue to expect an increase of the CapEx in line with the guidance provided in the CMV, probably closer to 250 million for the year. Working capital is stable year over year. And finally, net debt, which is 3.5 billion at the end of June. As a reminder, that's about 400 million up from December. Main movement in H1 being recurring free cash flow, which, as you know, is, you know, Seasonal and more accruing to the second half, return to shareholders and hybrid coupon. To conclude, and before I turn it over to Sebastien, let me now introduce our guidance on slide 12. REFPAR like-for-like growth is expected between 2 and 2.5%, depending on the pace of recovery in the UAE. The REFPAR guidance includes a second half scenario for the UAE, which is pretty much between where we are in June, which is around minus 40%, to minus 20%. Net unique growth is expected at circa 3.5% in line with FY25, and it's a notch below my comments from last February, taking into account a few things, one, some delay in openings in the Middle East, as well as the impact of the rebel bankruptcy and some turns in the China eco-hotel given the economic situation. That being said, as I commented before, the FIPA room of the new openings is about twice the fee per room of the closures. Recurring EBITDA is expected between 1 billion 260 million and 1 billion 285 million. That includes a negative FX impact of 10 million. And it represents an EBITDA growth year over year between 6 and 8%. And this concludes my opening remarks. And I will now turn over the floor to Sebastien for some closing remarks.