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Gilles C. Pélisson | Chairman and Chief Executive Officer of Accor |
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Due to the rapid change in the global economic environment in 2008, Accor took conservative measures in the middle of the year, with respect to commercial practices and costs.. In addition to these short-term reactions, Accor is staying on course and maintaining a medium term strategy to deeply transform its two business lines.
First, via the acceleration of technological changes in Prepaid Services and the development of new products. In this perspective, the recent agreement announced with MasterCard gains full meaning in a market with very high development potential.
Furthermore, through the transformation of the business model in Hotels, considerably advanced with 60% of the work already completed. The Group intends to continue development in the budget hotel industry and aims at greater selectivity in the upscale and mid-market hotels by focusing on low capital intensive holding methods.
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European leader in hotels and no. 1 worldwide in prepaid services |
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Present in nearly 100 countries, Accor provides its customers with the expertise acquired over more than 40 years in two major business areas :
- The Hotels activity with brands such as Sofitel, Pullman, MGallery, Novotel, Mercure, Suitehotel, Ibis, All seasons, Etap Hotel, Formule 1 and Motel 6, representing 4,000 hotels and 500,000 rooms in 90 countries, as well as additional activities, with Lenôtre in particular.
- Prepaid Services, 32 million people benefit in 40 countries from the Accor Services (employee and individual benefits, rewards and incentives, professional expense management).
The Colony/Eurazeo partnership holds, according to the reports submitted to the AMF on February 9, 2009, 30.14% of Accor’s capital.
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The Group displays remarkable resilience
The Group’s consolidated revenues increased by 2.8%
excluding currency and group structure effects, reflecting
remarkable resilience from the Group in light of the current
economic situation and 4.7% decline in 2008 published
data due to numerous asset disposals as well as currency
impacts (US dollar and pound sterling in particular).
The Group’s EBITDAR stood at €2,290 million. The gross
operating margin, the highest ever recorded by Accor,
represents 29.6% of revenues, up by 1% as reported and
0.4 points like-for-like compared to 2007.
Operating profit before tax and non-recurring items
reached €875 million in 2008, in line with the goals set by
the Group.
Robust financial situation
The Group’s net debt came off at €1,072 million as of
December 31, 2008. Financial flows for the period
including in particular an amount of €1,086 million of
expansion capital and €560 million of asset sales (of which
€110 million regarding disposals of non strategic
operations and €450 million of disposals under the “Asset
Right” policy).
As at December 31, 2008, Accor had €1,345 million euros
of unused confirmed credit lines and no major refinancing
is expected before 2012.
The primary financial ratios show a robust financial
situation. The net debt to equity ratio stood at 30% as at
December 31, 2008. The gross cash flow / restated net
debt reached 25.8% versus 26.2% at the end of 2007.
The Group’s return on capital employed or ROCE, was up,
reaching its highest historical level of 14.1% at December
31, 2008 versus 13.6% at December 31, 2007.
Breakdown of revenues and other relevant indicators
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Strong Group reactivity since mid 2008 |
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To cope with the global economic slump which impacted
Hotels, Accor rapidly decided to take measures aimed at
limiting the impacts on income. These measures focus on
the three pillars of operational reactivity, cash protection
and secure financing.
Given the Group’s profile with 70% of operating income
derived from Prepaid Services and the Economy hotel
business in Europe, Accor is now less vulnerable to
economic cycles.
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Accor maintains course and continues to transform its two business lines |
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In addition to focusing on the growth of its historic
products, Accor also seeks to conquer new markets in the
Prepaid Services industry, a market with huge growth
potential, particularly in Europe. To this end, the partnership
with MasterCard will boost the development of the
technological platform.
In Hotels, Accor’s strategy is built on three pillars: a
portfolio of strong brands now repositioned; an Asset Right
strategy, aimed at reducing the capital intensiveness and
volatility of its results; development adapted to global
demand.
Key operational figures
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| 4,000 hotels |
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| 32 million users of services to companies and local governments |
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100 countries
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More than 150,000 employees on five continents
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Condensed income statement
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2006 |
2007 |
2008 |
Change 2008/07(lfl*) |
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Revenues
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7,607 |
8,121 |
7,739 |
+ 2.8 % |
EBITDAR
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2,084 |
2,321 |
2,290 |
+ 4.0 % |
| Operating margin (% Revenues) |
27.4 % |
28.6 % |
29.6 % |
+ 0.4 pt |
Operating profit before tax and non-recurring items |
727 |
907 |
875 |
+ 6.8 % |
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(*) Like-for-like: at constant scope and exchange rates. |
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Condensed balance sheet as at December 31, 2008
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| (In million euros) |
ASSETS |
LIABILITIES AND SHAREHOLDERS’ EQUITY |
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| Goodwill |
1,932 |
Shareholders’ equity Group share |
3,305 |
| Intangible assets |
512 |
Shareholders’ equity |
3,563 |
| Property, plant and equipment |
4,324 |
Long-term debt |
2,088 |
| Total financial assets |
403 |
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| Total non-current assets |
7,393 |
Total non-current liabilities |
5,981 |
| Total current assets |
3,984 |
Total current liabilities |
5,432 |
| Assets held for sales |
36 |
Liabilities linked to assets held for sale |
- |
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| Total assets |
11,413 |
Total liabilities and shareholders’ equity |
11,413 |
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