2013 Registration document and annual financial report - page 22

Registration Document 2013
20
Corporate Presentation
1
Strategic Vision and Outlook
2. HotelInvest
HotelInvest brings together all of our operations as a hotel owner
and lessee. At end-2013, the HotelInvest portfolio comprised
1,387 hotels, of which 278 owned, 345 under fixed leases and 764
under variable leases. Europe accounts for 85% of the portfolio, a
percentage that is likely to increase in the coming years, and the
Economy and Midscale segments account for 95%.
In 2013, owned hotels generated 54% of net operating income
(EBITDA less maintenance expenditure), compared with 46%
for leased hotels. The medium-term objective is to increase the
contribution from owned hotels to 75%.
Significant room for improvement through lease contract restructuring
Revenue
4 761
179
4 940
EBITDAR
1 374
2
1 376
EBITDAR margin
28,9 %
1,0 %
27,8 %
EBITDA
500
- 9
491
EBITDA margin
10,5 %
- 5 %
9,9 %
EBIT
219
- 23
196
EBIT margin
4,6 %
- 12,7 %
4,0 %
Owned & leased
hotels
Other operations
HotelInvest
The
HotelInvest
business is divided into two segments:
ƒƒ
income from owned and leased hotels;
ƒƒ
other businesses, which includes operations related to the
hotel business, such as HotelInvest head offices, construction
and shared services, and non-strategic operations, such as the
casinos, the Orféa business in partnership with French National
Railways SNCF, and Orbis Transport.
HotelInvest’s
main challenges
are to:
ƒƒ
strengthen its position as the
leading hotel investor
in the
economy and midscale segments
in Europe,
with strategic
positions in emerging markets;
ƒƒ
optimize
cash flow generation
and reduce earnings volatility,
particularly by reducing the number of lease contracts.To achieve
this objective, certain hotels have been earmarked for restructuring
and lease contracts will not be systematically renewed when
they expire. In addition, hotel development will no longer take
place
via
lease contracts, except for contracts on which Accor
has already made a commitment;
ƒƒ
manage and rationalize the asset portfolio, with a focus on
value
creation
through the strategic allocation of capital expenditure;
ƒƒ
support the Group’s growth strategy, by holding a
selective
portfolio of profitable hotel property assets.
HotelInvest will keep the vast majority of owned hotels, limiting
property sales to hotels that are performing well below average.
HotelInvest is also responsible for allocating maintenance and
development expenditure and may decide to acquire other hotel
properties to drive further value creation.
Performance indicators aligned with
HotelInvest’s unique business features
Like HotelServices, the HotelInvest property business benefits
from specific performance indicators based on both operational
and financial criteria.
Operational indicators
ƒƒ
Portfolio and asset management.
ƒƒ
Allocation of capital expenditure.
Financial indicators
ƒƒ
Net operating income, with the objective of increasing the
contribution from owned hotels to 75% from 54% in 2013.
ƒƒ
Generation of free cash flow.
ƒƒ
Optimization of Net Asset Value.
ƒƒ
Return on capital employed.
ƒƒ
Adjusted net debt to EBITDAR ratio.
These indicators, which are mainly balance sheet and cash flow
driven, are used to calculate incentives for HotelInvest executives.
With HotelServices and HotelInvest, Accor now has a clear,
long-term vision supported by a simple, agile organization. These
two strategically aligned businesses leverage dedicated teams
within a unified Group to deliver optimal operating performance
and sustainable growth for employees, partners and shareholders.
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