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Microsoft PowerPoint - NH June I

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					NH Hoteles
June 2007
                             Results 2006
    € millon                            2006            2005       % Cambio
    Hotel Revenues                     1,021.57        901.22        13.4
    Real Estate Revenues                69.37           83.44       (16.9)
    Total Revenues                     1,090.94        984.66        10.8
    Hotels GOP                          345.99         296.68        16.6
    GOP Margin (%)                       33.9           32.9
    Hotel EBITDA                        161.8          127.19        27.2
    Real Estate Ebitda                  27.09           53.66       (49.5)
    Total EBITDA                        188.9          180.85        4.4
    Net Income                          62.45          62.24         0.34


    € millon               2007 Consenso          2006 Pro-forma   % Cambio
    Hotel Revenues             1,380                  1,286          7%
    Real Estate Revenues        70                    69.37          1%
    Total Revenues             1,457                  1,355         7,5%
    Hotel EBITDA               253                    215.8         17%
    Real Estate Ebitda          40                    27.09          47%
    Total EBITDA               292                    242.9         20%


2
                                      RevPar 2006

                         Comparable RevPar 2005-2006 and 2007e

               80                +10.19%
                                                                                       +6%
                     +8.36%                                                  +10.47%
                                                     +11.65%
               60                          +12.04%
                                                                  +16.3%
    Revpar €




               40
               20
                0
                    España Benelux Alemania A&S&H                    Latam       Total

                RevPar 2005                RevPar 2006            RevPar 2007
                                               Key Points
                RevPar growth of 10.47% in 2006, 80% of which accounted for by higher ADRs
                                            ADR, +8.39%, +€6.04
                                   6% RevPar Growth expected for 2007
                                     Favourable economic environment
                                       Moderate new hotel capacity
3
                                   Q1 2007 Results


     st
    1 Quarter 2007 Summary                 Q1 2007            Q1 2006       2007/2006
                                        M Eur.   %        M. Eur      %       Var. %
    Room Revenues                       288.55   90.6%    220.78   96.6%      30.7%
    Real estate sales and other         10.89     3.4%     4.50    2.0%      142.0%
    Other non-recurring revenues        18.94    5.9%      3.23    1.4%      486.4%

    TOTAL REVENUES                      318.38   100.0%   228.51   100.0%    39.3%

    GOP                                 108.53   34.1%    69.19    30.3%     56.9%
    HOTELS GOP                          105.18   36.5%    68.38    31.0%     153.8%
    EX- NON RECURRING GOP               86.24    29.9%    65.15    29.5%      32.4%
    EX- NO RECURRENTES EXPANSIÓN- GOP   71.92    31.0%    65.21    29.6%      10.3%

    EBITDA                               51.56   16.2%    24.88    10.9%     107.2%

    NET INCOME                           5.18    1.6%      1.75    0.8%      195.7%




4
                          3-Year Strategy 2007-2009


       Italy      Crystallize value of Jolly and rest of the assets in Italy to double results


                  Reinforce European focus leveraging on good economic prospects and lack of
                  leaders in mid-segment hotels
     European
      Focus
                  Growth will target core markets taking advantage of increasing brand
                  awareness, proven operating model and economies of scale


                  Investments will be concentrated in Germany and Italy thereby reducing
                  exposure away from Spanish real estate
    Growth Plan
                  New resort developments in the Caribbean will represent about 2% of total
                  investment commitment




                  Sotogrande will be refloated in the next months and net proceeds devoted to
    Sotogrande
                  fuel hotel activity


5
                                 Profitable Growth

                             Ebitda 2006   CAGR   06-09   CAGR        06-12
       Room Portfolio
    Potential (2006 end)     €161M           13,4%           8,7%




                             Ebitda 2006   CAGR   06-09   CAGR        06-12
    Jolly Hotels Potential
                             €54M            11,7%               9%



                             Ebitda 2006      2009           2012
      Expansion Plan
      18,000 Potential       0                €13M           €70M



                             Margen 2006      2009           2012
        Ebitda Margin
          Potential          16,9%           18,3%           18,9%



                             2006             2009               2012
        Hotels ROCE
                             7,5%             8,5%               9,3%
6
                       Modelling Assumptions - RevPar Assumptions
                       and Results of the Plan

                  Expected RevPar CAGR                                 Revenue and Operating Costs CAGR

                                  5%

               Total                   6%

                                       6%
                                                                                            10%
                                       6%

             Latam                               8%
                                                                                              12%
                                                      9%               Total Revenue

                                  5%
                                   5%
         Germany                                                                            10%
                                            7%


                             4%
                             4%
    Switz. & Austria

                                                 8%


                        3%
                        3%
           Benelux                                                                      9%
                                       6%


                                       6%                                  Operating
                                            7%                                               11%
                                                                             Costs
               Italy

                                                           12%


                        3%                                                             8%           2006-2012
                                                           2006-2012
              Spain     3%                                                                          2006-2009
                                                           2006-2009
                                                           2004-2006                                2004-2006
                        3%



7
                       Results Diversification



         1999                                   Spain



                                                Benelux
                             12%
                        6%

                                          38%

                                                Germany
         2006



                         44%
                                                Italy
                               9%

                                          30%
                       20%
                                                Latam
    2006 with Jolly
    Hotels Pro forma
                        6%


8
                                    35%
              Capex and Net Debt 2007-2012

             Maintenance 4-5%
                over Revenue
                                            €500M-€600M


                 Expansion                   €500-€550M
    CAPEX

                 Jolly Hotels                €200M-€250M

                   TOTAL                   €1200M-€1400M




              Cash Generation                1400M-1500M

                                      Stable through 2007-20012
LEVERAGE          Net Debt
                                            (€1000M-€1200M)

            Net Debt + Minorities/
                   EBITDA
                                     Target: 4x / achieved 2007 end
9
                                                    Sector Prospects

       Source Company: Company or analysts
        Hotel Operator        RevPar 2007-2009 CAGR
              Hilton                  7%-9%
           Starwood                    7-9%
              Accor                     8%
            Marriot                    4-8%
        Intercontinental                7%
          NH Hoteles                    6%
             Rezidor                   5.2%
           Whitbread                    5%
           Millenium                    4%
            Sol Meliá                   4%




• Large Operators are more optimistic due to its RevPar
  “Premium”
• RevPar Growth will be driven by price. Europe, America
  and Asia reached some time ago to levels of Occupancy
  equilibrium
• Hotel Cycles could become decreasingly extreme in the
  future due to the maturity with regard to:
       •More rational behaviour in respect to new supply
       •The availability of quality city centre sites for hotell
       development even where more supply is desired
       •Management of local economies

  10
              By Investing in the NH brand….


          NH brand awareness evolution
     100%
      90%
      80%
      70%
                                                            Mar-03
      60%
                                                            Nov-03
      50%
                                                            Dec-04
      40%                                                   Mar-06
      30%
      20%
      10%
       0%
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11
     Source: Ikerfel Consulting
         ….NH achieves a remarkable positioning in
         the European Business traveller segment

       Pan European Brand preference Index
               (Business segment)




12   Fuente: Business Development Consuelors, survey 2006
                    Adquisición de Jolly
                        NH Italy, (55% NH Hoteles - 45% Banca Intesa) already held since 1999
                        20% of Jolly Hotels
                        within 3 year period NH Italy, will acquire 63% of Jolly Hotels at 25€ per
     Key Terms          share
                        Within that period, NH Italy will hold at least 83% of Jolly Hotels
                        Besides, NH Hoteles will charge 1.5%/ Sales and a 4%/ GOP on NH Italy
                        consolidated P&L

                      € million                        Implied Valuation      Average Acquisition Price
                                                  November 15th Transaction      for NH Hoteles **

                      Share Price (€)                        25,00                     21,43
                      Equity Value                           500                        429
                      Net Debt                               229                        229
     Valuation        Firm Value                             729                        658


                      Firm Value to

                      ’06 EBITDA: €54m                       13.5x                      12.1x
                      ’07E EBITDA: €55m*                     13.2x                      11.9x
                 (*) Source: NH Hoteles
13               (**) Includes investment as of 1999
                             Transaction Rationale



                 Acquisition Price lower than NAV will generate no goodwill. Since last
     Valuation   external appraisal, EBITDA has increased by 20%, suggesting similar
                 upward trend in the asset value




     Returns     Estimated ROCE above 10%. Great opportunity to improve margins.




                 Unique hotel locations. Most of the owned assets are in the city centre.
Asset Location   Portfolio covers key Italian cities and international gateways (NY, London,
                 Paris, Amsterdam, Berlin and Brussels)




14
                                      Expansion Plan Progress

     Signed Deals: 3,152 rooms, 18% ahead of the plan
                     Countries: 27% in Italy, 18% in Austria, 16% in Spain, 11% in the Czech
                     Republic, 7% in Germany, 7% in France, 6% in South Africa, 4% in Holland
     New Openings: The italian Business Unit becomes a B.U. of the likes of
     Benelux or Germany due to Jolly Hoteles, Framon and the rest of future
     openings
                     The opening of NH Constanza restores a leading role in the Barcelona hotel sector
                     The NH Danube City is a clear bet for the Viennese market


                  Signed Rooms Evolution January-May
                                                                               New openings Q1 2007/2006
                             2007/2006

                                                                           10,000
                  4,000                                                                                  8,809
                            +120%                                                           Organic
                                        3,152                               8,000           Growth


                                                              # of Rooms
     # of Rooms




                                                                                            M&A
                                                                            6,000
                  2,000
                           1,429                                            4,000

                                                                            2,000   1,199             1,038

                     0                                                         0
                          Jan-April    Jan-April                                    Q1 2006           Q1 2007
                            2006         2007
15
                                    Sotogrande

                           Asset Restructuring and Short Term floating




                                         After the "share-for-share“ takeover bid, NH Hoteles
       Asset Mix Unclear                 owns 97.72% of Sotogrande
                                         Asset Restructuring was completed towards the
                                         company's focus on residential leisure segment
                                         Sotogrande has taken on significant interests in the
     Pure Real Estate Player             Dominican Republic (Cap Cana) and Mexico (Isla
                                         Blanca)
                                         Sotogrande Marketing Services was set up. It
                                         specializes in designing and implementing Marketing
          Short-Term                     concepts in the top-end residential leisure segment
          Refloating
                                         In the short-term, NH Hoteles will re-float the
                                         company and devote proceeds to fuel core hotel
                                         activity
      Hotel Reinvestment                 €900m of asset value, appraised in November 2006
                                         (Internal Valuation)


16
                                             Disclaimer

     This document has been produced by NH Hoteles, S.A (“NH Hoteles”), and it is provided exclusively for
     information purposes.

     This document does not constitute a purchase, nor a sale offer. The receivers of the document must know
     that historical results do not provide guarantees for the future.

     The information included in this document has been obtained from sources considered trustworthy. Although
     all reasonable care has been applied to guarantee that the information included is neither false nor uncertain
     at the moment of its publication, the document does not ensure that it is exact and complete.

     The judgments and assumptions that appear in this document constitute the technical opinion of NH Hotels
     and are subject to modification without previous notice. The success in historic projections does not ensure
     future success.

     The assumptions on which forecasts and goals are based refer to current economic and market
     circumstances, which, by its nature, can be modified at any time. Moreover, such assumptions and
     projections, as well as any reference to future facts, are subject to uncertainty and may not reach indicated
     levels.

     The statements and forecasts included in this document do not constitute testimony or guarantees, state or
     tacit, on behalf of NH Hotels, its board members or directors.

     Nor NH Hotels, nor its board members and directors, assume responsibility for any damage or loss, direct or
     indirect that may arise from the use of the information contained in this document.

     The reception of this document by its addressees implies the total acceptance of the content of this disclaimer
     note.
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