introduction to pphe hotel group/media/files/p/pphe/documents/pphe...all enquiries relating to this...

Introduction to PPHE Hotel Group June 2012

IMPORTANT NOTICE

By attending the meeting where this presentation is made, or by reading this document, you agree to be bound by the limitations set out below. This presentation does not constitute an offer or invitation for the sale or purchase of any securities of PPHE Hotel Group Limited (PPHE) or any of the businesses or assets described in it. The information in this presentation, which does not purport to be comprehensive, has been provided by PPHE and has not been independently verified. While this information has been prepared in good faith, no representation or warranty, express or implied, is or will be made and no responsibility or liability is or will be accepted by PPHE and any of its subsidiaries (the Group) or by any of their respective directors, officers, employees, agents or advisers in relation to the accuracy or completeness of this presentation or any other written or oral information made available to any interested party or its advisers and any such liability is expressly disclaimed. No information set out or referred to in this presentation shall form the basis of any contract. This presentation has been delivered to interested parties for information only. The recipient agrees to keep confidential any written or oral information contained herein or otherwise made available in connection with the Group. This presentation must not be copied, reproduced, distributed or passed to others at any time. The recipient has further agreed to return all documents and other material held by it relating to the Group referred to in the presentation upon request. PPHE gives no undertaking to provide the recipient with access to any additional information or to update this presentation or to deliver an updated presentation in the future or to update any additional information, or to correct any inaccuracies in it which may become apparent, and it reserves the right, without giving reasons, at any time and in any respect, to terminate negotiations with any prospective purchaser. This presentation is being distributed on the basis that each person in the UK to whom it is issued is reasonably believed to be such a person as is described in Article 19 (Investment professionals), Article 48 (Certified high net worth individuals), Article 49 (High net worth companies, unincorporated associations etc.), Article 50 (Certified sophisticated investors), or Article 50A (Self-certified sophisticated investors) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, or is a person to whom this presentation may otherwise lawfully be distributed. Persons who do not fall within such descriptions may not act upon the information contained in it. Any recipient of this presentation in jurisdictions outside the UK should inform themselves about and observe any applicable legal requirements. This presentation does not constitute an offer to sell or an invitation to purchase securities in PPHE in any jurisdiction. In particular, this presentation should not be distributed, directly or indirectly, by any means (including electronic transfer) in or into Canada, Australia, Japan, the United States, the Republic of South Africa or the Republic of Ireland or to any citizens, nationals or residents thereof, or to any corporation, partnership or other entity created or organized under the laws of those jurisdictions or to any “US Person” as defined in Regulation S under the US Securities Act of 1933 (as amended). Any such distribution could result in a violation of relevant securities laws of such jurisdictions. This presentation should not be considered as the giving of investment advice or any recommendation by PPHE or any other member of the Group or by any of their respective officers, directors, employees, agents or advisers. Each person to whom this presentation is made available must make his or its own independent assessment of PPHE and the Group after making such investigation and taking such advice as he or it may consider necessary or appropriate. In particular, this presentation does not replace a review of PPHE's prospectus dated 24 June 2011, any financial or other information published by PPHE via a Regulatory Information Service and ongoing reports. Any opinions, forecasts or estimates in this presentation constitute a judgment as at the date of this presentation. There can be no assurance that future results or events will be consistent with any such opinions, forecasts or estimates. This presentation may contain unpublished price sensitive information with regard to the Group. Recipients of the presentation should not deal or encourage any other any other person to deal in the securities of PPHE whilst they remain in possession of such unpublished price sensitive information. Dealing in securities of PPHE when in possession of unpublished price sensitive information could result in liability under the insider dealing restrictions set out in the Criminal Justice Act 1993. This document may contain information which is not generally available, but which, if available, would or would be likely to be regarded as relevant when deciding the terms on which transactions in the shares of PPHE should be effected. Unreasonable behaviour based on such information could result in liability under the market abuse provisions of Financial Services and Markets Act 2000. All enquiries relating to this presentation should be directed to Chen Moravsky, CFO, PPHE Hotel Group Limited at [email protected].

2 Introduction to PPHE Hotel Group | April 2012

Portfolio of Hotels

Europe

Belfast

Cardiff

Leeds

Nottingham

London

Amsterdam

Utrecht

Eindhoven

Cologne

Trier Nuremberg

Berlin area

Budapest

Istria

Middle East

Tel Aviv, Israel

Asia

Pattaya Bay, Thailand

Park Plaza® Hotels & Resorts art’otel®

Arenaturist

Development

Dresden


PPHE Hotel Group

• PPHE Hotel Group is a Main Market listed owner, operator and franchisor of hotels

• Operating since 1989, the Company is focused on offering affordable luxury hotels

Who we are

• 38 owned, leased, operated and franchised hotels and apartment complexes in Europe, the Middle East, Asia and Africa

• Focus on major gateway cities including London, Amsterdam and Berlin

• Leveraging global partnership with Carlson Rezidor Hotel Group and ownership of art’otel® lifestyle brand

• Expansion of the portfolio through acquisition and development of identified pipeline

What we do

Strategy


Introduction

• High quality portfolio of 38 hotels with an attractive geographical spread

• Three distinct brands (Park Plaza® Hotels & Resorts, art’otel® and Arenaturist)

targeted at distinct demographic groups:

1. Park Plaza® Hotels & Resorts = affordable luxury, targeted at business and leisure travellers

2. art’otel® = contemporary lifestyle hotels, targeted at leisure travellers

3. Arenaturist = multi faceted resort offering two to four-star accommodation and extensive leisure facilities, targeted at holidaymakers

• Integrated approach of hotel and brand ownership and operation

• Powerful distribution and marketing network through the partnership with Carlson

Rezidor Hotel Group

• Focus on expanding affordable luxury market segment

• Share capital traded on LSE’s Main Market (Standard Listing), current market

capitalisation £ 94 million

• Track record of acquisition and development of portfolio


Operational Strategy

• Improving our overall performance through innovative revenue generation and

marketing

• Improving operational performance through better service quality

• Utilising our partnership with the Carlson Rezidor Hotel Group to promote our business

and further grow revenues


Corporate Strategy

• Continue dividend payout (2011: proposed final dividend of 6.0 pence per share)

• Seek move from Standard to Premium listing on Main Market

• Driving revenue growth through expanding our asset portfolio

• Improving our financial structure

Leveraging Carlson relationship

• Carlson is the 9th largest hospitality and travel company in the

world with over 40,000 travel agencies as part of their network

• Exclusive licence agreement with Carlson for the Park Plaza®

Hotels & Resorts brand in 56 countries across the EMEA

• Leveraging the network, PPHE Hotel Group achieved a high

occupancy rate in less than a year at its new hotels with its

state-of-the-art reservation and distribution system, whilst

independent hotels would take three years to reach such

occupancy levels

• Benefits to PPHE Hotel Group also include:

– Access to 8 million members of the Club Carlson guest

rewards programme

– New Park Plaza® Hotels & Resorts opening in Asia improve

customer recognition

Introduction to PPHE Hotel Group | April 2012 7

History of Growth

1 14 5 6

13

8

18

38

1989 1995 2000 2005 2011

Number of countries Number of operational hotels


Diversified Revenue Mix


14

12

8

5

4 Operated without, or with minority, ownership interest Ownership of 50% or more

Operating leases

Projects (all ownership of 50% or more)

Franchise agreements

Development pipeline

Project Location Operating structure

No of rooms

Status

Park Plaza Histria Pula Pula, Croatia Co-owned and management contract

241 Expected to open 2012

Park Plaza Verudela Pula Pula, Croatia Co-owned and management contract


Park Plaza Medulin Medulin, Croatia Co-owned and management contract


art’otel amsterdam Amsterdam, The Netherlands

Co-owned and management contract


Park Plaza Nuremberg Nuremburg, Germany

Owned 175 Expected to open 2013

Mixed-use development Park Royal

London, United Kingdom

Contracted to acquire 160 Expected to open 2013

art’otel london hoxton London, United Kingdom

Joint venture and management contract


Mixed-use development Pattaya Bay

Pattaya Bay, Thailand

Owned 100¹ Expected to open 2015

10

¹ The room count excludes 301 residential apartments under construction

Introduction to PPHE Hotel Group | April 2012

Focus on Gateway Cities

• Focus on providing affordable luxury in major gateway cities and European

regional centres

• Customers, particularly business travellers, benefit from PPHE Hotel Group’s

full service offering of restaurants and business centres

• Gateway cities’ focus is key given current economic backdrop:

– London hotels continue to outperform the market in terms of RevPAR (7.8% vs.

4.1% for market), room rates (7.4% vs. 3.8%) and occupancy

– Amsterdam achieves above 10% growth in RevPAR and room rates

• Olympics and Diamond Jubilee expected to boost London performance

(Savills predicting 3.9% increase in 2012)


PORTFOLIO OF BRANDS

• Park Plaza® Hotels & Resorts

• art’otel®

• Arenaturist

Park Plaza® Hotels & Resorts

Typical size: 100-300 rooms

Concept: Design-led properties offering a blend of technology and

comfort

“Full Service” four-star and four-star deluxe

Target customers: Business and leisure travellers

Location: Key European leisure and business destinations

Accessibility: In the heart of business and tourist centres

Close to major transportation hubs

Facilities and features: State-of-the-art facilities in all rooms

Excellent conference facilities

Bars and restaurants


art’otel®


Typical size: 100-200 rooms

Concept: Fusion of travel, architecture and contemporary art

Lifestyle hotels

Target customers: Professionals and leisure travellers with an interest in arts

& culture

Location: European leisure and business destinations

Accessibility: Easy access to transport links

Close to main shopping streets and cultural attractions

Facilities and features: Collection of original artwork

PPHE Hotel Group has exclusive ownership rights to the art’otel® brand worldwide

Arenaturist, Istria Croatia


• One of Croatia's best known hospitality groups

• Operated with 15%-20% ownership interest

• Includes eight hotels and five apartment complexes

• Mix of leisure product offering

• Catering primarily for holidaymakers

• Accommodation located in or close to Pula or Medulin mostly in prime seaside

locations

• Extensive offering of food and beverage outlets

• Renovations in process for three Arenaturist resorts to re-open as Park Plaza Histria

Pula, Park Plaza Verudela Pula and Park Plaza Medulin during May/ June 2012

Hospitality Offering

Hospitality Offering


• Hospitality Offering includes conferencing facilities, restaurants and bars:

- Cross selling opportunities through Club Carlsonsm and Club Carlson for Business

- Provided in excess of 25% of Company’s revenues

• Facilities offered:

- 254 meeting room in 27 hotels

- Meeting space ranging in size from 20m2 to 1,200m2

- Largest room accommodates up to 1,400 guests theatre-style

- Westminster Ballroom – one of the largest pillar free venues in London

Restaurant and Bar Facilities


Case Study: Park Plaza Westminster Bridge, London

• One of the largest hotels in London with 1,019 rooms

• PPHE Hotel Group acquired control of Park Plaza Westminster Bridge in 2008

• Financed acquisition through the sale of 535 units to third party investors

• Fully opened in September 2010, first full operational year in 2011

• Currently 85% occupied, contributing approximately 35% of total consolidated revenue in 2011

• Full service offering:

– Award winning meeting and event venue (Westminster Ballroom)

– State of the art conferencing facilities


Financial Review

Financial Information

FY 2011 €’000

FY 2010 €’000

FY 2009 €’000

Consolidated statement of operations

Revenues 202,380 139,829 80,326

EBITDAR 75,029 46,447 26,144

EBITDA 65,050 37,633 16,244

Profit/ (loss) before tax for the period 10,634 60,482 (7,160)

Normalised profit before tax 13,607 6,084 (7,160)

Consolidated balance sheet

Total assets 954,589

935,305 731,871

Consolidated statement of cash flows

Net cash from/(used in) operating activities

17,584

15,151 (84,653)


Operational Results

FY 2011 €’000

FY 2010 €’000

FY 2009 €’000

Room revenue 139,030 93,357 49,923

Food and beverage revenue 52,408 36,018 19,387

Minor operating revenue 3,516 2,504 1,637

Management fees1 3,214 4,602 5,518

Franchise fees and reservations fees 1,575 2,297 2,858

Marketing 2,184 813 745

Other revenue 453 238 258

Total 202,380 139,829 80,326

1 Reported Management fees are after elimination of intra-group revenue. The financial contribution of Park Plaza Sherlock Holmes London, Park Plaza Victoria London and Park Plaza Riverbank London (including Plaza on the River) in 2011 is included on the basis of the 100% ownership interest of PPHE Hotel Group in those hotels during the financial year. In 2011, the management fees were fully eliminated while in 2010 50-55% (only owned share).


Revenue (in Million €)

¹ The like for like figures exclude Park Plaza Nottingham and Park Plaza Leeds for the first seven months of 2011, Park Plaza Westminster Bridge London for the first two months of 2011, Park Plaza Amsterdam Airport for the first four months of 2011 and art’otel cologne for the first two months of 2011. The financial contribution of Park Plaza Sherlock Holmes London, Park Plaza Victoria London and Park Plaza Riverbank London (including Plaza on the River) in 2011 in the like for like comparison has been calculated on the basis of the ownership interest of PPHE Hotel Group in those hotels during the twelve months ended 31 December 2010.

² 2007 figures in this statement are unaudited proforma figures and have been calculated as if the company operated throughout the year.


37,7 33,2 29,0

81,6 97,1

140,0

22,4 23,0 19,8

22,8

23,8

24,8

29,6 27,9

23,4

27,7

29,1

30,2

7,4 9,3

8,1

7,7

7,4

7,4

FY 2007² FY 2008 FY 2009 FY 2010 FY 2011 LfL¹

FY2011 Actual

Management and Holding Operations

Germany & Hungary

The Netherlands

United Kingdom

202,4

139,8

157,4

80,3

93,4 97,1

EBITDA (in Million €)


¹ The like for like figures exclude Park Plaza Nottingham and Park Plaza Leeds for the first seven months of 2011, Park Plaza Westminster Bridge London for the first two months of 2011, Park Plaza Amsterdam Airport for the first four months of 2011 and art’otel cologne for the first two months of 2011. The financial contribution of Park Plaza Sherlock Holmes London, Park Plaza Victoria London and Park Plaza Riverbank London (including Plaza on the River) in 2011 in the like for like comparison has been calculated on the basis of the ownership interest of PPHE Hotel Group in those hotels during the twelve months ended 31 December 2010.

² 2007 figures in this statement are unaudited proforma figures and have been calculated as if the company operated throughout the year.

12,7

11,1

11,3

24,5

34,8

47,5

8,3

8,4

6,5

7,6

7,7

7,8

-0,3

-1,4

-3,7

-0,3

-0,8

-1,0

7,7

7,3

2,1

5,8

10,7

10,7

United Kingdom

The Netherlands

Germany & Hungary

Management and Holding Operations

52,4

37,6

16,2

25,4

28,4

FY 2011 Actual FY 2011 LfL¹

FY 2010 FY 2009 FY 2008 FY 2007

65,0

Balance Sheet 2011 highlights

Item €’000

Hotel properties (book value) 610,881

Hotel properties (fair value) 721,831

Bank loans 418,128

Cash and cash equivalents 31,005


Appendix

Board of Directors

Eli Papouchado (74) Non-Executive Chairman

Boris Ivesha (66) President and Chief Executive Officer

Chen Moravsky (41) Chief Financial Officer

Kevin McAuliffe (53) Non-Executive Director, Senior Independent Director

Elisha Flax (50) Non-Executive Director

Nigel Jones (50) Non-Executive Director


Largest Shareholders

Number of issued shares 42,677,292

Held in treasury by PPHE Hotel Group

1,662,000

Number of issued shares (excluding treasury)

41,015,292

Largest shareholders Number of shares Percentage of issued share capital (excluding treasury)

Red Sea Group¹ 18,552,714 45.23%

Molteno Limited¹ 7,990,027 19.48%

Total Red Sea Group and Molteno Limited

26,542,741 64.71%

¹ Mr Papouchado, the Chairman, is deemed interested in the shares held by the Red Sea Group and Mr Ivesha, the CEO, is deemed interested in shares held by Molteno Limited


PPHE Hotel Group Viñoly Tower, 5th Floor Claude Debussylaan 14 1082 MD Amsterdam The Netherlands T: +31 (0)20 717 8600 F: +31 (0)20 717 8699 E: [email protected] pphe.com

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