Meliá Hotels International, S.A.

Good morning and welcome to the Nelia Hotels International fourth quarter and full year 2020 earnings conference call. All participants will be in listen-only mode. After the presentation, anybody who is interested will have a chance to ask questions so we can resolve any additional doubts. Please note this event is being recorded. I will now turn the call over to Stéphane Bell, Head of Investor Relations. Please go ahead.

Thanks operator. Welcome to Mediasforce Q&A Year 2021 Earnings Call. Before we begin, we would like to remind you that our discussion this morning will include forward-looking statements. Actual results could differ from those indicated in the forward-looking statements, and local forward-looking statements made today speak only to our expectations as of today. This morning, as usual, we have Gabrieles Carrer, our Vice President and Chief Executive Officer. Andres Gerondo of Chief Operating Officer It has those of Chief Financial Officers and Mark Holiner or Chief Real Estate Officers and me. Gabriel Escarre will provide an overview of the current operating environment. Andres will then review our fourth quarter onwards. Following their remarks, we will be happy to take your questions. In any case, the investor relations team will be available following this conference call to give you a chance to clarify anything else you might need. You can find our earnings release on our investor relations website at mediahotelsinternational.com. And now, I am pleased to turn the call over to Gabriel.

Thank you, Stefan, and good morning, everyone, and thanks for joining us today. 2021 was another difficult year for the global population as a result of a pandemic that is still with us and that, despite the global vaccination program, has continued to disrupt society in general and trouble in particular based, as we all know, on mobility and interaction between people. 2021 began as 2020 has ended. This meant that the key drivers of our resilience in 2020, our liquidity, efficiency and collaboration with our partners and stakeholders continue to be needed in 2021 to manage a very complex and volatile financial year. As our results show, we made significant progress in our recovery throughout 2021. We saw a meaningful increase in demand for travel and tourism. In this context, turning to results, for the fourth year and fourth quarter, for the fourth year, we grew Red Park by 14.9%, mainly thanks to the improvement of the average on rate during the year, We have seen a quarter on quarter increase, with the fourth quarter showing an improvement in RESPAR of 163% compared to same period 2020. RESPAR was roughly 76% of Q4 2019 levels with average room rate 5.8% above Q4 2019 numbers. Consolidated revenues, excluding capital gains, increased by 56.6% compared to 2020. For the fourth quarter itself, revenues increased by 212% compared to 2020, that represented 76% for the same period, 2019. Operating expenses increased by 13.6% with respect to the previous year and decreased by 14.8% compared to 2019. Excluding the expenses associated with capital gains and the extraordinary expenses in 2020 costs increased by 16.7% compared to 2020. While some costs will come back in as we continue to recover, we remain extremely focused on cost discipline. Given our business model and the actions we took during the pandemic to further streamline our operations, We expect permanent margin improvements versus 2019 levels in 300 basis points over the next few years EVDA, excluding capital gains, reached €61.5 million compared to €-130.5 million in 2020 Depreciation and amortization decreased by 135.8 million euros compared to the previous year. The main difference was the impairments included in 2020 accounts. The net financial results improved by 15.7%, representing 11.8 million euros of improvement compared to the same period in the previous year. mainly explained by the improvement in other financial results for which the same period in the previous year saw the impact of the impairment of other financial loans of minus 14 million euros, as well as the improvement in financial expenses associated with leases caused by changes in interest rate estimates due to the renegotiation of some lease contracts due to COVID. Interest expenses increased by 17.5% compared to the same period in the previous year due to the increase in bank debt The net loss of the parent company reached minus 192.9 million euros But we are confident that in 2022 we will be able to reverse this situation and end the year with a positive net profit Turning to the balance sheet, we ended the year with 2,853 million euros of net debt, an increase of 41.2 million euros over the final quarter of the year. During this same period, the financial net debt pre-IFRS 16 increased by 24.7 million euros to 1,285 million euros. meaning an increase of 30.7 million euros over the entire 2021 financial year. At the end of December, the liquidity situation amounts to 404 million euros, representing 98 million in available cash balances plus 306 million of on-draw credit lines. We would like to remember that Melia does not have any debt with financial covenants. It is also worth noting that our mortgage debt currently stands at around 300 million euros, which represents a loan to value of the existing owned properties below 9%, a limited proportion of the value of the company's owned properties. I would also like to point out that 52% of the debt is at fixed interest rate. Additionally, I would like to highlight that the company is working on the refinancing of upcoming maturities, which will extend the average maturity of the debt to 4.6 years. Close this chapter, I would like to inform you that the company continues to analyze alternative ways of reducing debt and increasing liquidity after sales with the possibility of the long-term management contract. I will now turn the call over to André to talk about our operational performance during the fourth quarter and forwards in more detail. Please, André.