Accor: 2009 Nine-Month Revenue Down 8.2% Like-for-Like
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Accor: 2009 Nine-Month Revenue Down 8.2% Like-for-Like
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Category: Worldwide - Industry economy
- Figures / Studies
This is a press release selected by our editorial committee and published online for free on 2009-10-16
In an economic environment that has seen no significant improvement,
• Prepaid Services revenue rose by 3.6% like-for-like despite rising unemployment and the steep decline in interest rates worldwide.
• Hotel revenue retreated by 10.7% like-for-like, with the Economy segment showing relatively good resilience, particularly in France.
In an economic environment that has seen no significant improvement,
• Prepaid Services revenue rose by 3.6% like-for-like despite rising unemployment and the steep decline in interest rates worldwide.
• Hotel revenue retreated by 10.7% like-for-like, with the Economy segment showing relatively good resilience, particularly in France.
Consolidated revenue for the first nine months of 2009 totaled €5,258 million, down 8.2% like for like and 8.9% on a reported basis from the prior-year period.
(in € millions)
2008 (9 months)
2009 (9 months)
% change
as reported
% change
like-for-like(1)
Hotels
4,317
3,891
-9.9%
-10.7%
Upscale and Midscale
2,554
2,248
-12.0%
-12.2%
Economy
1,310
1,216
-7.2%
-6.8%
Economy US
454
427
-5.8%
-13.6%
Prepaid Services
693
687
-0.8%
+3.6%
Other businesses
766
681
-11.1%
-4.9%
Total
5,775
5,258
-8.9%
-8.2%
(1) At constant scope of consolidation and exchange rates.
(2) Impact of the retrospective application of IFRIC 13 – Customer Loyalty Programs from January 1, 2008.
Press Release – Quarterly Information
Paris – October 15, 2009
(2)
2
Consolidated revenue performance for the period was shaped by the following factors:
• The expansion strategy, which increased revenue by €251 million (4.3%), of which €106 million from the consolidation of Orbis and €51 million from the consolidation of 49% of Groupe Lucien Barrière’s revenue since July 1, 2009.
• The refocusing strategy, which reduced revenue by 3.8% (€220 million), reflecting the disposal of the Brazilian foodservice business (€71 million), the loss of the onboard train services contract (€54 million) and the impact of a number of real estate transactions (€76 million).
• The 1.3% negative currency effect, which reduced revenue by €74 million, primarily due to the euro’s appreciation against the British pound, the Brazilian real and the Australian dollar. The euro/US dollar exchange rate had a positive 0.9% impact.
• Like-for-like, revenue was down by 8.2% for the period.
Revenue for the third quarter alone totaled €1,848 million, a decline of 8.4% as reported and like-for-like.
Prepaid Services revenue up 3.6% like-for-like in the first nine months
Revenue from the Prepaid Services business in the first nine months declined by 0.8% to €687 million as reported, reflecting the following factors:
• The currency effect, which reduced revenue by 3.8% (€27 million), mainly due to the decline against the euro of the Brazilian real (down 2.1%), the British pound (down 0.6%) and the Mexican peso (down 0.6%).
• At constant scope of consolidation and exchange rates, Prepaid Services revenue rose by 3.6% over the period.
Revenue for the third quarter alone totaled €222 million, a decline of 4.9% as reported and 0.6% like-for-like. Despite the rise in unemployment, especially in Europe, operating revenue growth held firm at 3.0%, but financial revenue fell by 21.8% due to the decline in interest rates in both Europe and Latin America.
In Europe, revenue stood at €116 million, down 1.5% like-for-like. Operating revenue rose by 2.0% during the quarter, while the falloff in financial revenue accelerated to 20.3%, following a 5.1% increase in the first quarter and a 10.8% decline in the second.
In Latin America, revenue totaled €90 million, a 0.6% increase like-for-like. Operating revenue, which was less affected than in Europe by the rise in unemployment, rose by 4.5%. However, total revenue growth was considerably dampened by the ongoing decline in financial revenue, which fell by 22.9% in the third quarter, following a 26.3% rise in the first quarter and a 16.5% decline in the second.
Quarterly Report
Financial position and results
In the absence of any visibility in the economic environment, the target for operating profit before tax and non-recurring items has been based on the following assumptions:
In Prepaid Services:
• A more than 25% decline in financial revenue in the second half, causing like-for-like revenue to show only a slight gain for the year.
• An operating margin of more than 40% for the year.
In the Hotels business:
• No major improvement in business expected in the second half.
• A step-up in the plan to reduce operating costs in the owned/leased hotels to €150 million from €120 million, to ensure that the response ratio holds steady at 35%.
Consolidated earnings:
• An €80-million reduction in support costs over the year.
As a result, the target for operating profit before tax and non-recurring items is confirmed at between €400 million and €450 million.
Significant transactions and events of the period
Accor has announced to conduct a review of the potential benefits of demerging the businesses
Given the depth and speed of the changes ahead, the transformation and development of the two core businesses will be stepped up.
As part of this process, during its meeting on August 26, the Board of Directors has approved Chairman and CEO Gilles Pélisson’s recommendation to conduct a review of the potential benefits of demerging the two businesses into two independent companies, each with their own strategy and resources for growth.
A major real estate transaction in the Budget segment in France
In line with its ongoing asset-right strategy, Accor announced in late September a major real estate transaction in the Budget segment in France, with the sale of 158 hotelF1 properties, representing a total of 12,300 rooms.
This sale and variable leaseback transaction was carried out with a consortium of leading French institutional investors through a property investment trust (OPCI).
With the sale of the hotel units for €272 million, Accor signed a 12-year business lease, renewable six times at Accor’s option. The variable rents are based on an average 20% of revenue with no guaranteed minimum. Based on 2008 revenue, the variable rent would have been €21.3 million.
The transaction will enable Accor to reduce its adjusted net debt by approximately €187 million in 2009, of which €130 million will be added to the Group’s cash reserves. In addition, it will have a positive impact of roughly €5 million on profit before tax.
Accor Services gains leadership of the meal voucher market in the Czech Republic with the acquisition of local operator Exit Group
As part of its growth strategy, Accor Services announced in early October that it had acquired Exit Group, the fourth largest provider of meal vouchers in the Czech Republic. With a strong position among small and mid-sized businesses, Exit Group reported issue volume of €77 million in 2008.
With this acquisition, Accor Services has widened its share of the meal voucher market and will also gain access to Exit Group’s 165,000 end users for its value-added products and services.
The transaction was finalized at a price of €15 million. Accor Services Czech Republic’s post-acquisition issue volume is estimated at €250 million.
Upcoming events
- January 19, 2010: Fourth-quarter 2009 revenue
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