Paris ? July 16, 2009
In a severely deteriorated economic environment
? Prepaid Services revenue grew 5.7% like-for-like.
? Hotels revenue continued to decline, contracting 11.4% like-for-like.
Consolidated revenue for the first half of 2009 totaled EUR3,410 million, down 9.3% on a reported basis and 8.1% like-for-like over first-half 2008.
Second quarter revenue came to EUR1,794 million, down 9.0% on the year-earlier period on a reported basis and down 10.1% like-for-like.
Prepaid Services revenue up 5.7% like-for-like in the first half
First-half revenue from the Prepaid Services business stood at EUR465 million, up 1.3% as reported, reflecting the following factors:
- A 3.8% negative currency effect, mainly due to the weakness
of the British pound and Latin American currencies against the euro.
- A like-for-like increase of 5.7% at constant scope of
consolidation and exchange rates, achieved despite sharply higher
jobless rates, particularly in Europe, and lower interest rates, which
had a negative impact on interest income recognized in revenue.
Operating revenue (i.e. excluding interest income) rose by 6.8% over the period, compared with a 1.2% decline in interest income.
Excluding operations in Argentina, where tax incentives have been eliminated, revenue increased by 7.8% in the first half.
Second quarter revenue came to EUR234 million, up 0.5% as reported and up 3.2% like-for-like.
Prepaid Services in Europe up 3.9% like-for-like to EUR259 million
In France, like-for-like operating revenue (which excludes interest income) was up 11.9% for the first half of 2009, reflecting increases of 9.2% in the first quarter and 14.9% in the second. Second-quarter growth was mainly due to the launch of the prefunded Universal Employment Service Vouchers (CESU Social) at the initiative of the French government. On the other hand, lower interest rates dragged first-half interest income down by 9.3%, including falls of 5.3% in the first quarter and 13.2% in the second.
Revenue in the United Kingdom increased by 5.1% at constant scope of consolidation and exchange rates, reflecting gains of 7.0% in the first quarter and 2.9% in the second. Operating revenue was up 6.8% over the period, including 8.4% in the first quarter and 5.0% in the second. Growth was led by childcare vouchers (up 8.7%) and new PrePay Solutions products. Gift vouchers, on the other hand, declined by 18.5%. Interest income fell by 10.3% in the first half, reflecting declines of 6.1% in the first quarter and 14.6% in the second.
Prepaid Services in Latin America up 7.9% like-for-like to EUR175 million
In Latin America, revenue grew by 7.9%, of which 11.6% in the first quarter and 4.4% in the second. Generally speaking, business remained strong throughout the region and the slower revenue growth was mainly attributable to the sharp drop in interest rates, financial revenue was up 26.3% in the first quarter and was down 16.5% in the second.
In Brazil, revenue increased by 11.9% at constant scope of consolidation and exchange rates. The decline in the growth rate from 16.3% in the first quarter to 7.8% in the second was primarily due to lower interest rates.
Despite the elimination of tax incentives in Argentina, operating revenue in the rest of Latin America increased by 7.4% in the second quarter, compared with 4.9% in the first, for a 6.2% gain over the entire first half. Interest income, on the other hand, was weighed down by sharply lower interest rates, particularly in Venezuela. It declined by a sharp 14.6% in the first half, reflecting growth of 9.5% in the first quarter and a 35.3% drop in the second.
Further deterioration in the Hotels business, down 11.4% like-for-like
Hotels revenue amounted to EUR2,534 million in the first half, a period-on-period decline of 9.6% as reported. This figure takes into account the impact of:
- The expansion strategy, which added 4.4% to growth thanks to
i) the opening of 12,100 rooms in first-half 2009 versus 11,000 in the
year-earlier period, including 4,240 rooms in franchised hotels, an
increase of 26% over first-half 2008, and ii) the EUR73-million impact
of the full consolidation of Orbis.
- The sale of hotel properties under the asset-right strategy,
which reduced growth for the period by 2.1%.
- The currency effect, which was a negative 0.4% for the period.
- The 11.4% decline in Hotels revenue at constant scope of
consolidation and exchange rates caused by the continued deterioration
of the economic environment, in spite of the improved resilience of the
economy segment, particularly in France.
Second quarter Hotels revenue came to EUR1,351 million, down 11.1% as reported and 13.7% like-for-like.
Upscale and Midscale Hotels: down 13.3% like-for-like to EUR1,472 million
In the Upscale and Midscale segment, revenue was down 11.9% as reported and 13.3% like-for-like, reflecting declines of 9.2% in the first quarter and 16.6% in the second.
In France, the accelerating decline in revenue over the period was mainly due to the Business segment, which dropped 12.6% in the first quarter and 18.7% in the second. The Leisure segment was more resilient, contracting 4.1% in the second quarter. Moreover, despite the Paris Air Show in June, business outside Paris held up better than in the capital, with RevPAR down 17.2% in Paris versus 9.1% in the rest of the country.
In Germany, the like-for-like fall in first-half revenue came to 11.6%, including 1.9% in the first quarter and 19.6% in the second. Adjusted for the change in the timing of the Easter vacation and the absence of major trade fairs, revenue was down 8.1% in the first quarter and 11.5% in the second.
In the United Kingdom, first-half revenue contracted 10.2% like-for-like, including 8.9% in the first quarter and 11.4% in the second. Business in London fared better than the rest of the country, as the weak pound attracted more tourists, leading to a 10.4% rise in Leisure segment revenue. This helped to limit the decline in RevPAR to 7.2% in the capital versus 19.2% for the rest of the country.
Economy Hotels: down 7.3% like-for-like to EUR781 million
In the Economy Hotels segment, first-half 2009 revenue was down 7.6% as reported and 7.3% like-for-like, reflecting declines of 6.8% in the first quarter and 7.7% in the second.
In France, the economy segment demonstrated strong resilience in the depressed economic environment, with like-for-like revenue down just 2.7% for the period, including 3.2% in the first quarter and 2.3% in the second. After the major renovation program carried out in 2008 and 2009, Hotel F1 recorded a slight 0.4% increase in RevPAR in the second quarter and a decline of just 0.2% in the first six months, with first-half RevPAR for the renovated units (representing nearly 50% of the hotel base) up 3.6%.
Like the Upscale and Midscale segment, the Economy Hotels business held up better in the regions than in the capital, with RevPAR down 3.7% in Paris and 0.2% in the rest of the country.
In Germany, first-half revenue contracted 9.8% like-for-like, reflecting declines of 5.0% in the first quarter and 13.8% in the second. Like the Upscale and Midscale segment, the fact that the Easter vacation fell later in 2009 and the absence of certain trade fairs also had a significant impact on revenue from Economy Hotels. Adjusted for these effects, revenue was down 8.5% in the first quarter and 8.4% in the second.
Economy Hotels US: down 12.8% like-for-like to EUR281 million
Motel 6 revenue contracted by 2.0% in the first half on a reported basis.
Like-for-like revenue was down 12.8%, with falls of 11.5% in the first quarter and 14.1% in the second.
Although still affected by the severely weakened economic situation in the United States, the erosion of Motel 6 RevPAR was roughly 2 points less than that experienced by the competitors in its segment.
The 23 franchised Motel 6 hotels opened since the beginning of 2009 along with the 50 opened in 2008 drove a 26.6% increase in franchise revenues at constant exchange rates.
Outlook
The second quarter figures reflect the global economic situation, which is still extremely depressed.
Prepaid Services revenue increased by 5.7% like-for-like in the first half, which was below the five-year annual target set by the Group in 2005. The under-performance was due to the unprecedented nature of the crisis, which has resulted in a very sharp rise in unemployment, and to the decline in interest rates in Europe and Latin America, which has eroded interest income.
Given the faster reduction in interest rates, particularly in Latin America, the Group expects interest income to fall by more than 25% in the second half, feeding through to slightly positive like-for-like revenue growth for the full year.
Hotels revenue contracted 11.4% like-for-like in the first semester. The economy segment is faring better than the upscale and midscale segment, with revenue gap of 6.0 points (revenue down 7.3% in Economy hotels vs. down 13.3% in Up & Midscale).
With visibility in the Hotels business still low, the business remains badly hit by the economic environment and has not yet showed signs of stabilizing in most countries.
The Group is continuing to adjust to this environment by cutting costs and scaling back capital expenditure in 2009 and 2010.
Accor, a major global group and the European leader in hotels, as well as the global leader in services to corporate clients and public institutions, operates in nearly 100 countries with 150,000 employees. It offers to its clients over 40 years of expertise in two core businesses:
- Hotels, with the Sofitel, Pullman, MGallery, Novotel, Mercure,
Suitehotel, Ibis, all seasons, Etap Hotel, Formule 1 and Motel 6
brands, representing 4,000 hotels and nearly 500,000 rooms in 90
countries, as well as strategically related activities, such as
Lenotre.
- Services, with 32 million people in 40 countries benefiting
from Accor Services products in employee and public benefits, rewards
and loyalty, and expense management.
SOURCE Accor