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Viewpoints - Gilles Pélisson, Virginie Morgon |
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What do you think of Eurazeo’s contribution as a shareholder?
G. P.: Eurazeo first became a shareholder of Accor two years ago. Two years later, we particularly appreciate the support provided for the implementation of our projects and the development of our long term vision. The study of the spinoff of our two traditional businesses, Hotels and Prepaid Services, is now our main priority. Eurazeo has played and continues to play a role in this process by helping us to make structuring choices. We also maintain a good dialogue with Eurazeo because it is direct, fair and, above all, constructive.
Eurazeo’s long-term commitment as our partner is also an asset, as the success of this split is underpinned by the stability of our shareholder base.
What do you discuss with Accor?
V. M.: Our familiarity with the hotel sector predates our entry into Accor’s capital. This expertise enabled us to identify a potential creation of value in the medium term that prompted our investment, along with the desire to support the Group’s management over time. We have supported the strategic impetus, given by management with the full approval of Accor’s Board of Directors, to implement the split of the Group’s two businesses. We do not view this spinoff as an end in and of itself, as each of these businesses has significant growth potential and we are very excited about the corporate development plans of both listed entities: accelerating the transformation of the hotel business to a less capital-intensive model, focused on budget and superbudget hotels in Europe, and the continued deployment of our employee and prepaid services activity within a market that is experiencing high growth. |
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European leader in hotels and world leader in prepaid services |
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European leader in hotels and world leader in prepaid services. Present in nearly 100 countries, Accor puts the expertise it has acquired over more than 40 years in its two core businesses to work for its customers:
- Hotels: with the Sofitel, Pullman, MGallery, Novotel, Mercure, Suitehotel, Adagio, Ibis, All Seasons, Etap Hotel, Formule 1, HotelF1 and Motel 6 chains, representing nearly 4,100 hotels and 500,000 rooms in 90 countries; additional activities, with Thalassa Sea and Spa, Lenôtre, CWL (food and other services on trains); and the Lucien Barrière Group (49% stake);
- Prepaid Services: 33 million people in 40 countries benefit from Accor Services (employee and citizen benefits and prepaid services contributing to organizational performance).
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Profit before tax and non-recurring items amounted to €448 million, above the target that had been set, despite the €39 million negative impact of the devaluation of the Venezuelan bolivar. The end of fiscal year 2009 was marked by the stabilization of occupancy rates in hotels.
Group results
In 2009, Accor reported consolidated revenues of €7,065 million, down by 7.9% on a comparable basis and by 8.5% on a reported basis. Reported revenues were negatively impacted by difficult economic conditions, asset sales (negative impact of 3.5%) and changes in foreign exchange rates (negative impact of 1.4%). The Group’s business development policy contributed a positive 4.4% to revenues. The Group generated EBITDA of €1,976 million. The EBITDA margin came in at 28.0%, down by 1.7 points on a reported basis and by 1.5 points on a comparable basis. The Prepaid Services segment posted a slight, 0.3 point decline in its EBITDA margin to 41.8% on a comparable basis, confirming the resilience of the sector in the face of rising unemployment and falling interest rates. The Hotels segment posted an EBITDA margin of 29.1% in 2009, down 2.6 points on a comparable basis. Excluding the impacts of changes in exchange rates and scope, the limited decline in margins in the upscale and mid-market and budget hotels segments was made possible by the implementation of major cost savings programs in 2009, in both the operating (€165 million) and support (€87 million) functions.
Sturdy financial position
As of December 31, 2009, the Group had net debt of €1,624 million. Cash flows for the period included notably €766 million in capital expenditure related to new business development (including €271 million on the acquisition of 15% of the shares of the Lucien Barrière Group) and €363 million from disposals, related primarily to the continued management of the Group’s real estate assets (including 216 hotels sold in 2009).
Répartition du chiffre d’affaires et autres indicateurs pertinents
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Dynamic growth in hotels, well suited to new challenges |
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Accor is focusing its new business development expenditures on the budget segment outside the United States, favoring less capital-intensive forms of expansion in the upscale and mid-market segment, and accelerating growth in high potential regions such as Asia (35%) and Europe (32%).
At the end of 2009, there were approximately 103,000 rooms in the pipeline, 50% of which in the budget or superbudget segments and over 85% in a less capital-intensive form.
Considering that the Group’s two businesses, Hotels and Prepaid Services, now leaders in their markets, have achieved critical mass and international recognition, the Board of Directors of Accor has approved the terms and conditions of their separation into two independent entities. This separation will be beneficial to both entities because it will:
- Enable two different corporate visions to be pursued by specialized management teams, thereby reinforcing the feeling of “ownership” within each entity;
- Create two pure players, separately listed and with no capital link, with targeted investors, promoting the visibility of each entity;
- Open new opportunities to both entities for partnerships, strategic alliances and financial transactions to finance future growth.
The proposed spinoff is expected to be implemented in June 2010, in light of the satisfactory progress the Board of Directors has made in establishing the decision criteria for the separation of the two businesses.
In 2009, under the Earth Guest program:
> 13,000 employees trained in the fight against child sex tourism.
> 25 countries involved in the fight against HIV/AIDS.
> Consumption of energy and water reduced by 7.8% and 4%, respectively, compared to 2006 on owned hotels.
> 86% of owned hotels dealing with batteries and energy-efficient fluorescent bulbs and tubes.
« Plant for the Planet »
In 2008, Accor launched the “Plant for the Planet” in partnership with the United Nations Environment Programme’s Billion Tree Campaign. This innovative approach consists of inviting hotel guests to reuse their towels by ensuring that 50% of the savings made on laundering costs will be invested in reforestation in seven regions around the world. The project is not Sustainable development only environmentally friendly, it also has a strong local economic and social development component. For example, in Senegal the reforestation program conducted with SOS Sahel targets the economic development of 30,000 producers. Accor hopes to finance the planting of three million trees around the world by the end of 2012.
FOOD Program
Since 2007, Accor Services is participating, along with 20 public and private partners in Europe, in the FOOD program. The Fighting Obesity through Offer and Demand (FOOD) program was launched by the European Commission as part of its initiatives to protect consumers from obesity and inequality of access to a balanced diet. The program has been introduced in six European countries: France, Belgium, Spain, Italy, the Czech Republic and Sweden.
Summary Income statement
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2008 |
2009 |
Change 2009/08(*) |
| In millions of euros |
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Revenues
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7,722 |
7,065 |
(7.9) % |
EBITDA
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2,290 |
1,976 |
(12.5) % |
| EBITDA Margin |
29.7 % |
28.00 % |
(1.5) pt |
| Profit before tax and non-recurring items |
875 |
448 |
(38.0) % |
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(*) At a comparable consolidation scope and constant exchange rate. |
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CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2009
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| In millions of euros |
ASSETS |
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LIABILITIES AND EQUITY |
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| Goodwill |
1,777 |
Group portion of equity |
2,997 |
| Intangible assets |
488 |
Total equity |
3,254 |
| Property, plant and equipment |
4,306 |
Long-term financial debt |
2,475 |
| Financial assets |
428 |
Other non-current liabilities |
343 |
| Other non-current assets |
291 |
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| Total non-current assets |
7,290 |
Total non-current liabilities |
6,072 |
| Total current assets |
4,312 |
Total current liabilities |
5,670 |
| Assets held for sale |
144 |
Liabilities related to assets held for sale |
4 |
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| Total Actif |
11,746 |
Total liabilities and equity |
11,746 |
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