The first-half 2019 results show Accor’s performance in the execution of its objectives. After adding 18,589 rooms (149 hotels) on an organic basis during the period, Accor had a portfolio of 717,314 rooms (4,892 hotels) and a pipeline of 202,000 rooms (1,153 hotels) at June 30, 2019, of which 78% in emerging markets.
Consolidated revenue for the first half of 2019 amounted to €1,926 million, up 4.8% like-for-like (LFL) and up 27.8% as reported compared with first-half 2018.
Reported revenue for the period reflects the following factors:
- Changes in the scope of consolidation (acquisitions and disposals) had a positive impact of €324 million (+21.5%), due in particular to the contributions of Mantra and Mövenpick.
- Currency effects had a positive impact of €23 million (+1.5%), primarily relating to the US dollar (€30 million).
HotelServices reported business volumes of €10.4 billion, versus €8.9 billion in first‑half 2018, and revenue of €1,366 million, up 5.0% like-for-like, reflecting positive business trends and expansion of the hotel network.
Management & Franchise (M&F) revenue amounted to €486 million, a like-for-like increase of 5.0% that reflects the Group’s growth in all of its markets.
Consolidated RevPAR rose by 2.9% overall in first-half 2019.
In Europe, M&F revenue was up a sharp 5.7% on a like-for-like basis, underpinned by a 4.4% increase in RevPAR, all segments combined.
In France, RevPAR was up 4.7% like-for-like, with solid performances from both the Greater Paris area and regional cities (up 5.3% and 4.2%, respectively). In June, business was boosted by the International Paris Airshow and the Women’s Football World Cup.
- RevPAR growth remained moderate (+1.2%) in the United Kingdom, with London and the regional cities still posting highly contrasted performances. The increase in RevPAR in London (+4.3%) reflects a persistently active domestic tourism market, while RevPAR in regional cities (-2.1%) was impacted by uncertainties related to Brexit.
- In Germany, RevPAR increased by 3.9%, driven as expected by a favorable trade fair calendar.
- Spain recorded a significant 11.9% rise in RevPAR thanks to strong growth in demand.
Asia-Pacific posted stable M&F revenue on a like-for-like basis, despite a slight decline in RevPAR (-0.2%) in the first half. The trend in RevPAR nonetheless improved in the second quarter (+0.3% in Q2 vs. -0.6% in Q1). Expansion of the hotel network was offset by a decline in incentive fees, relating in particular to the renovation of the Fairmont Singapore Hotel.
The Middle East & Africa region recorded an increase in M&F revenue of 4.6% despite moderate growth in RevPAR of 1.0%. A solid performance by hotels in Makkah during Ramadan in May brought in additional incentive fees during the period.
North America, Central America & the Caribbean reported an increase in M&F revenue of 7.2%, thanks notably to the ramp-up of the Fairmont Austin Hotel. RevPAR for the region rose by 0.8%.
Lastly, South America continued to post strong growth, particularly in Brazil, with revenue up 16.1% on the back of a 13.8% increase in RevPAR.
Services to Owners revenue, which includes the Sales, Marketing, Distribution and Loyalty division, as well as shared services and the repayment of hotel personnel costs, came to €879 million, versus €773 million in first-half 2018.
Hotel Assets & Other revenue amounted to €519 million, a like-for-like increase of 7.1%. The reported rise of 130.5% notably reflects the consolidation of Mantra in June 2018 and Mövenpick in September of the same year. Following the reclassification of Orbis’ real estate operations as assets held for sale in accordance with IFRS 5, this segment is mainly driven by the Asia-Pacific region.
Excluding Orbis, the division’s hotel base included 173 hotels and 31,893 rooms at June 30, 2019.
New Businesses (concierge services, luxury home rentals, private sales of luxury hotel stays, and digital services for hotels) generated revenue of €77 million in first-half 2019, up 4.5% on a like-for-like basis. The 10.3% increase as reported reflects the acquisitions of ResDiary and Adoria in April and June 2018, respectively.
EBITDA
Consolidated EBITDA amounted to €375 million in the first half of 2019, up 5.1% like‑for‑like and up 30.1% as reported compared with first-half 2018.
The EBITDA margin gained 0.4 of a point to reach 19.5%.
HotelServices EBITDA by business
The Management & Franchise EBITDA margin widened by 4.7 points.
Management & Franchise EBITDA by region
HotelServices’ Management & Franchise division recorded a like-for-like increase in EBITDA of 7.1%, reflecting contrasted regional growth performances:
- Europe (+7.9%) benefited from the launch, presented at the November 2018 Capital Market Day, of plans to reorganize the region’s support functions.
- Asia-Pacific (+3.2%) demonstrated our capacity to keep costs under control in a challenging environment.
- The Middle East & Africa region remains solid. The like-for-like change (-4.8%) was impacted by an unfavorable basis of comparison due to the reversal of provisions recorded in 2018.
- On the other hand, North America, Central America & the Caribbean (+17.8%) benefited from the reversal of provisions this year.
- South America (+17.4%) recorded EBITDA growth in line with its revenue growth.
Hotel Assets & Other EBITDA came to €97 million in first-half 2019, a significant increase over the €29 million recorded in the prior-year period, due notably to the acquisitions of Mantra and Mövenpick. The EBITDA margin came to 18.7%.
New Businesses EBITDA improved sharply to a negative €1 million in the first half of 2019 from a negative €11 million in first-half 2018, reflecting the initial benefits of the strategy implemented to restructure and streamline certain operations, including onefinestay and John Paul.
Net profit
In first-half 2019, in the absence of any material non‑recurring items, net profit before profit from discontinued operations improved sharply to €125 million. The net profit, Group share, came to €141 million. During the same period in 2018, the sale of 58% of the capital of AccorInvest resulted in the recognition of a capital gain of €2.4 billion.
Robust recurring free cash flow and a healthy financial position
In the first half of 2019, recurring free cash flow came to €144 million, reflecting a cash conversion rate of 76%.
Recurring expenditure — which includes key money paid by HotelServices in relation to its development, as well as digital and IT investments, and maintenance investments in the remaining owned and leased hotels — came to €75 million in first-half 2019, versus €55 million in the prior-year period.
Net debt amounted to €2,237 million at June 30, 2019, up €1,084 million versus December 31, 2018. The increase primarily reflects the recognition of lease liabilities in accordance with IFRS 16, for a total of €882 million.
At June 30, 2019, the average cost of the Group’s debt was 1.7%, with an average maturity of 4.1 years.
Full-year 2019 EBITDA target
Based on the RevPAR trends observed in the first half, which are expected to continue during the second half of the year, and on record organic development in terms of room numbers, the Group is forecasting full-year 2019 EBITDA of between €820 million and €850 million.
