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Accor solid third-quarter 2013 revenue growth: up 3.8% like-for-like

October 21, 2013 Financial No Comments Email Email
  • Gross revenue1 up 4.2% for the first nine months of the year to €8.6 billion, thanks in particular to expansion under management and franchise agreements.
  • Nine-month revenue up 2.5% like-for-like and down 1.6% as reported.
  • Solid third-quarter growth in all key markets: up 3.8% like-for-like and down 3.1% as reported, due to a highly negative currency effect and the impact of asset disposals.
  • Very strong 18.2% increase in revenue from management and franchise fees in the third quarter.

Rise in gross revenue

Owing to expansion under asset-light structures and favorable business, the Group’s gross revenue rose by 4.2% for the first nine months of 2013 to €8.6 billion, despite the negative currency effect in the third quarter.

Nine-month 2013 revenue: €4,133 million, up 2.5% like-for-like

At comparable scope of consolidation and exchange rates, nine-month revenue was up 2.5%, thanks in particular to the sharp 16.7% rise in revenue generated by management and franchise fees.

Reported revenue reflected the following factors:

  • Expansion, which added €121 million to revenue and 2.9% to growth, with the opening of 14,100 rooms (113 hotels), of which 82% under management and franchise agreements and 52% in emerging markets.
  • Changes in the scope of consolidation due to asset disposals, which reduced revenue by €205 million and growth by 4.9%.
  • The negative €88 million currency effect, which reduced growth by 2.1%, with an overall decline in exchange rates, mainly for the Australian dollar, Brazilian real and British pound.

Reported nine-month revenue totaled €4,133 million, down 1.6%.

Third-quarter 2013 revenue: €1,440 million, up 3.8% like-for-like

At comparable scope of consolidation and exchange rates, third-quarter revenue was up 3.8%, thanks to very robust demand in all the Group’s key markets. Revenue was also lifted by 18.2% growth in revenue from management and franchise fees, linked to openings under asset-light structures.

Reported revenue reflected the following factors:

  • Expansion, which added €31 million to revenue and 2.1% to growth, with the opening of 4,160 rooms (36 hotels), of which 89% under management and franchise agreements.
  • Changes in the scope of consolidation, which reduced third-quarter revenue by €78 million or 5.2%.
  • The highly negative €54 million currency effect, which reduced reported growth by 3.7%, mainly due to a decline in the Australian dollar, Brazilian real and British pound against the euro.

As reported, third-quarter revenue stood at €1,440 million, down 3.1%.

Upscale & Midscale Hotels: revenue up 3.6% like-for-like

Revenue in the Upscale and Midscale segment rose by 3.6% like-for-like and declined by 3.9% as reported in the third quarter.

Thanks to solid demand from leisure customers during the summer and from business customers in September, the segment saw robust growth in all its key markets, especially in France and northern Europe.

Strong performances were also evident in Asia-Pacific and the Middle East. The period also saw the benefit from a number of renovated flagships, such as the Pullman London St Pancras, Pullman Paris La Défense and Pullman Paris Montparnasse hotels, which sustained the performance of the Upscale segment.

Economy hotels: revenue up 4.2% like-for-like

Revenue from Economy hotels increased by 4.2% like-for-like and 1.4% as reported in the third quarter.

Under the same brand, the economic hotels benefited from the highly positive impact of the innovative distribution and marketing policy introduced since the beginning of the year. Mastered and opportunistic management of distribution channels combined with summer advertising campaigns for the ibis hotel family

had a direct impact on volumes. All markets contributed to the segment’s sharp revenue growth, with an especially good performance in northern Europe. At the same time, revenue from management and franchise fees rose by a very high 32%, led by expansion.

Outlook for 2013: full-year EBIT target confirmed

Accor posted strong revenue growth in the third quarter of the year, led by a very satisfying summer season and a month of September that saw solid demand in key markets. The Group’s solid performance was also driven by the increase in fees from managed and franchised hotels, which reflects in particular the expansion under asset-light structures.

Accor is pursuing its growth and remains confident for the last part of the year, thanks to solid demand in Europe and the growth dynamic in emerging markets. The mixed environments observed since the beginning of the year in southern Europe, Australia and China stabilized in the third quarter but remain fragile. The Group expects business trends to be similar in the fourth quarter.

In that context and despite unfavorable currency effects, Accor confirms its full-year EBIT target of €510- 530 million.

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