2013 Registration document and annual financial report - page 174

Registration Document 2013
172
2013 Review of the Year
4
Report on the parent company financial statements for the year ended December31,2013
4.2. REPORT ON THE PARENT COMPANY FINANCIAL
STATEMENTS FOR THE YEAR ENDED
DECEMBER 31, 2013
ACTIVITIES OF ACCOR SA
Accor SA owns the Pullman, MGallery, Novotel, Suite Novotel,
Mercure, ibis Style, ibis, ibis
budget
and HotelF1 brands, and
receives royalties from their licensing. It also owns hotel businesses
in France and holds most of the hotel management contracts and
franchise agreements in the country.
Accor SA provides other Group companies with hotel management,
purchasing, cash management, IT and advertising services, as well
as various advisory services, and assigns staff to them as required.
Billings for these services correspond either to a percentage of
the hotel’s revenue and/or profit, either as a flat fee or a fee per
service. They are determined on an arm’s length basis.
As the Group’s holding company, Accor SA manages a substantial
portfolio of equity interests, receives dividends from subsidiaries
and leads the Group’s expansion.
At December 31, 2013, the following hotels were managed by
French subsidiaries under business leases: three Sofitel, 42
Novotel, four Mercure, 12 Suite Novotel, one ibis Styles, two ibis,
and one ibis
budget
.
Review of 2013 results
Revenue
from all of the Company’s operations amounted to
€807.3 million in 2013,
versus
€753.3 million the year before. The
7.2%, or €54.0 million, increase reflected the €38.0 million growth
in revenue from hotel management operations and the €25.0 million
increase in distribution fees, which offset the €9.0 million decline
in rental income and debt guarantee fees due to the ongoing
deployment of the Group’s asset-right strategy.
Revenue includes hotel royalties, rental and business-lease revenue
and service fees.
Accor SA revenue by source
(inmillions of euros)
2012
2013
% of total
Royalties from subsidiaries
336
359
44%
Service fees
(1)
229
250
31%
Rental and business-lease revenue
80
74
9%
Royalties from non-Group companies
95
115
14%
Guarantee fees
12
10
1%
TOTAL
753
807
100%
(1) Services provided by Accor SA include corporate services, purchasing, technical support, accounting fees and back-office systems.
Other income, expense transfers and reversals of depreciation,
amortization and provisions
amounted to €55.2 million in
2013, compared with €28.2 million in 2012. The €27.0-million
increase was led by the reversal of €15.6 million in provisions for
post-employment benefits and by the capitalization of €9.0 million
in development costs for distribution projects and the digitization
of hotel reception systems.
Operating expenses
rose by €118.1 million to €852.6 million from
€734.5 million the year before, primarily due to the €25.7 million
in overheads in the Europe region, the €29.4 million in additional
distribution costs, the €70.2 million in restructuring costs (including
those incurred by the voluntary separation plan) and the €11.7million
in strategic consulting fees in relation to the Group’s reorganization, all
of which offset the €11.7 million in savings on the strategic projects
carried out in 2012. In addition, a total €11.2 million in savings was
recognized on post-employment benefits provisions for the year.
Operating profit
stood at €9.9 million compared to €46.9 million
in 2012, a decline of €37.0 million.
Net financial income
improved by €686.0 million over the
year, swinging to €46.4 million from a net financial expense of
€639.6 million in 2012, which was primarily due to the disposal
that year of the Economy Hotels business in the United States.
Total provision movements
included in net financial expense,
correspondingmainly to write-downs of investments in subsidiaries,
represented a net gain of €14.8 million against a €719.4 million net
charge in 2012, reflecting the provisions on shares in US companies
recognized in 2011. In 2013, the most material additions to these
provisions concerned the shares of Accor Partecipazioni Italia
(€14.3 million) and Accor Hospitality Argentina (€7.7 million). The
most material reversals concerned the shares in Accor Hospitality
Germany (€19.5million), Risma (€13.8million), S. H. deMontparnasse
(€11.7 million) and Accor Afrique (€10.8 million).
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