Report on 3rd quarter 2014

KEY FACTS Q3
•
New Motel One Android app | PAGE 1
•
New hotels opened in Leipzig and Bremen | PAGE 2
•
Further increase in guest satisfaction | PAGE 3
•
GERMAN BUNDESBANK raises Investment Grade | PAGE 4
•
Once again at top place in TREUGAST Investment Ranking | PAGE 4
•
Network of sites increases to 12,000 rooms |
•
Investments at record high | PAGE 6
•
Balance sheet remains strong | PAGE 7
•
Growth to 19,300 rooms contractually secured | PAGE 8
•
Market and outlook | PAGE 9
PAGE 5
BUSINESS DEVELOPMENT
█ NEW MOTEL ONE ANDROID APP
All room reservation services are now also available for Android
smart phones and can be downloaded free in the Google Play Store!
Here our guests can find out about all the Motel One hotels – along
with detailed descriptions, locations including a local search, route
planners and image galleries. Rooms can also be booked at the best
rate guarantee directly using your mobile phone. And if on the spur
of the moment things don’t work out, bookings can also easily be
cancelled again in your own profile.
You can download the app here.
█ SECOND MOTEL ONE OPENED IN LEIPZIG
Framed
by
the
Opera,
the
Nikolaikirche (St. Nicholas Church)
and the University, and right in the
historic heart of the city, the Motel One
Leipzig-Augustusplatz is an ideal
starting point for exploring Leipzig. On
the ground floor of the building next to
the reception there is also the “One
Bar”. The first floor’s spacious One
Lounge welcomes guests with a
panoramic view of the Nikolaikirche.
The 180 room hotel was developed by
commercial real estate specialist TLG
and the end investor is the life insurance society ALTE LEIPZIGER.
█ FIRST MOTEL ONE IN BREMEN CASTS OFF
“All hands on deck, cast off” is the
motto of the new Motel One in Bremen.
The central hotel, located close to the
old city, the pedestrian area and the
“Schlachte” promenade on the River
Weser, has 254 rooms and 55
basement parking spaces. Lounge
furniture
from
Italian
designer
Gervasoni, basket lights, model ships
and canvas are what gives the interior
design its nautical feel. Besides the
bar, there is a delightful spacious
outdoor lounge in the interior courtyard.
Motel One Real Estate GmbH is both
developer and investor.
█ FURTHER INCREASE IN GUEST SATISFACTION
The Group’s most important indicator still relates to guest satisfaction. Motel One has therefore
established an assessment and evaluation system to measure guest satisfaction and to analyse and
respond promptly to their comments. Each Motel One guest receives an email after his or her trip with
a link to an evaluation.
Development of Guest Satisfaction as a %
(year to date September 2014/2013)
The data is based on a representative sample of 79,850 (previous year: 70,663) guest evaluations.
With its “Star quality knows no bounds” campaign Motel One has also established an incentive system
in which every employee participates in achieving the quality goals.
Thus, thanks to our committed staff, despite our growth and international development and despite
being active in the market for a long period, we have succeeded in improving yet further what are
already high values for the industry in the fourth year in succession. Consolidating service at its high
quality level and further developing the quality leadership of the Motel One brand remains an incentive
and a key goal of ours.
█ GERMAN BUNDESBANK RAISES INVESTMENT GRADE
The German Bundesbank in its letter dated 6.10.2014
certified the eligibility of our collateral with a Ranking of 3
(previous year: 4). This means that commercial banks
can use the loans we are granted as collateral with the
German Bundesbank.
The final credit rating is established by the competent Bundesbank agency based on the decisions of
the ECB Council not simply on figures in the balance sheet but also on circumstances specific to the
company and on current trends. The ranking given by the GERMAN BUNDESBANK corresponds to a
comparable Investment Grade A of the external ratings agencies S&P and FITCH or an A2 with
MOODY’S. The Investment Grade will further consolidate our standing with investors and above all
boost our international development.
█ ONCE AGAIN AT TOP PLACE IN TREUGAST INVESTMENT RANKING
The "Hotel Investment Ranking 2014" by the Treugast Solutions Group, presented at the Expo Real in
Munich, included a few surprises. However, both in Germany and in Austria Motel One retains its top
position. The ranking rates the suitability of hotel operators in the German market as business
partners for investors.
Motel One, Accor and Marriott, which continue to have the top AAA rating, are now joined by Grand
City Group (GCH) to make up the top four. Motel One in top place maintains its overall position as
leader of the group of top German hotel operators. As in previous years, exceedingly positive growth
in performance and a very good credit rating, combined with continuous growth, augur well for the
company. In 2013 three new lease-based businesses (Dresden, Düsseldorf, Rostock) were added,
followed in early 2014 by Frankfurt and Cologne. Numerous projects are on the horizon even though
the Group’s focus is increasingly shifting abroad (source: Treugast Solution Group in its press release
of 7.10.2014 and HospitalityInnside 10.10.2014).
█ INCOME STATEMENT
The network of sites increased to 52 (previous year: 44) hotels with 11,975 (previous year: 9,755)
rooms. Q3 saw the opening of the Motel One Leipzig-Augustusplatz and Bremen. Occupancy in Q3
remained stable despite the start-up phases at around 79% (previous year: 79%). RevRoSold
increased by 5% to around EUR 83 million (previous year: 79). On this basis revenue increased by
25% to 70 (previous year: 56) and EBITDA by 16% to EUR 25 million (previous year: 21). Pre-tax
quarterly profit increased by 43% to EUR 20 million (previous year: 14). It should be noted here that
interest result includes an exchange rate gain from a US$ investment of around EUR 3 million.
P&L Statement
No. Hotels
Q3 2014
2014
2013
Abw.
2014
YTD September
2013
Abw.
52
44
18,2
52
44
18,2
11.975
9.755
22,8
11.975
9.755
22,8
Occupancy (%)
78,6
78,8
-0,2
74,2
74,9
-1,0
RevRoSold (EUR)
82,7
78,8
5,0
80,7
78,1
3,3
No. Rooms
TEUR
%
TEUR
%
% Vj.
TEUR
%
TEUR
%
% Vj.
Revenue
EBITDAR
69.637
39.717
100,0
57,0
55.725
32.330
100,0
58,0
25,0
22,8
183.905
101.130
100,0
55,0
150.986
85.092
100,0
56,4
21,8
18,8
Lease payments
EBITDA ex Head Office
-9.731
29.986
-14,0
43,1
-7.056
25.274
-12,7
45,4
-37,9
18,6
-26.965
74.165
-14,7
40,3
-20.190
64.902
-13,4
43,0
-33,6
14,3
Pre-Opening Expenses
Head Office Expenses
-1.024
-4.109
-1,5
-5,9
-219
-3.652
-0,4
-6,6
<100
-12,5
-2.265
-11.492
-1,2
-6,2
-753
-9.336
-0,5
-6,2
<100
-23,1
EBITDA
24.853
35,7
21.403
38,4
16,1
60.408
32,8
54.813
36,3
10,2
Amortisation/Depreciation
-5.435
-7,8
-5.889
-10,6
-7,7
-15.795
-8,6
-15.503
-10,3
-1,9
EBIT
19.418
27,9
15.514
27,8
25,2
44.613
24,3
39.310
26,0
13,5
Interest result
EBT
899
20.317
1,3
29,2
-1.286
14.228
-2,3
25,5
>100
42,8
-1.645
42.968
-0,9
23,4
-4.738
34.572
-3,1
22,9
65,3
24,3
Income tax expenses
-6.704
-9,6
-4.741
-8,5
-41,4
-14.179
-7,7
-11.533
-7,6
-22,9
Net Income
13.613
19,5
9.487
17,0
43,5
28.789
15,7
23.039
15,3
25,0
In the year to date to September, a similar picture can be seen in the current results. With the only
slightly decreased occupancy rate of 74% (previous year: 75%) due to the start-up phases, revenue
increased by 22% to EUR 184 million (previous year: 151). Returns on revenue (EBITDAR) fell due to
start-up phases and the lower-yield international projects by 1.4 points to 55.0% (previous year:
56.4%). In absolute terms, EBT increased a pleasing 24% to a pre-tax profit of EUR 43 million
(previous year: 35).
█ CASH FLOW STATEMENT
In Q3 operating cash flow rose to EUR 35 million (previous year: 19). In addition to the profit increase,
the increase is due to the change in working capital caused by a tax refund of EUR 7 million in
Brussels. CAPEX new investments amounted to EUR 36 million (previous year: 33), of which EUR 33
million is for property owned by the Group and EUR 3 million for the FF&E of the rented hotels. There
were major purchases, to the tune of EUR 19 million, of a further piece of land on the Hamburger
Fleetinsel and in the centre of Manchester. CAPEX refurbishments of EUR 6 million (previous year: 4)
were made to the Motel One Leipzig-Nikolaikirche, Berlin-Tiergarten and München-Sendlinger Tor.
New bank loans of EUR 3 million (previous year: 32) were granted. Scheduled payments of long-term
debt amounted to EUR 1.5 million (previous year: 2).
Cash Flow Statement
2014
TEUR
Q3
2013
TEUR
Abw.
% Vj.
2014
TEUR
YTD Sept
2013
TEUR
Abw.
% Vj.
Net Income
13.613
9.487
43,5
28.789
23.039
25,0
+ Non cash items
+/- Change in working capital
5.435
15.995
5.889
3.475
-7,7
>100
15.795
11.480
15.503
8.024
1,9
43,1
Cash flow operating acitivities
35.043
18.851
85,9
56.064
46.566
20,4
- CAPEX new investments
- CAPEX refurbishment
+/- Other grants
-36.160
-5.699
3
-33.416
-4.127
2.505
-8,2
-38,1
<100
-93.936
-8.111
3.911
-49.757
-10.540
2.505
-88,8
23,0
-56,1
Cash flow investing activities
-41.856
-35.038
19,5
-98.136
-57.792
69,8
0
2.813
-1.536
0
31.924
-1.974
0,0
-91,2
22,2
-83
9.258
-4.034
2.456
22.630
-4.166
<100
-59,1
3,2
Cash flow financing activities
1.277
29.950
-95,7
5.141
20.920
-75,4
Cash flow for the period
Cash at beginning of the period
-5.536
73.141
13.763
54.061
<100
35,3
-36.931
104.536
9.694
58.130
<100
79,8
Cash at end of period
67.605
67.824
-0,3
67.605
67.824
-0,3
+/- Change Equity
+ Proceeds from long-term debt
- Repayments of long-term debt
In the year to date to September, operating cash flow increased by 20% to EUR 56 million (previous
year: 47). Investments reached a new high of EUR 98 million (previous year: 58); of these EUR 94
million (previous year: 50) relates to new investments and EUR 8 million (previous year: 11) to
refurbishments. Cash flow from financing activities stood at EUR 5 million (previous year: 21),
resulting in an overall decrease in liquidity by EUR 37 million to a cash holding of EUR 68 million
(previous year: 68) as at 30.09.2014.
█ BALANCE SHEET
Like the high investments, there was a 20% increase in fixed assets over the previous year to EUR
432 million (previous year: 358). Growth, however, remains soundly based in terms of finances. The
net basis of the balance sheet structure shows an equity ratio of 59% (previous year: 55) with equity of
EUR 256 million (previous year: 197) (up 30% over the prior year).
Balance Sheet net
September, 30
2013
2014
TEUR
%
TEUR
Abw.
%
%
Fixed assets
431.550
100,0
358.334
100,0
20,4
Eq uity
255.755
59,3
196.729
54,9
30,0
50.901
11,8
41.566
11,6
22,5
Net debt
124.894
28,9
120.040
33,5
4,0
Total
431.550
100,0
358.335
100,0
20,4
- as debt pipeline
62.951
14,6
37.900
10,6
66,1
EBITDA Rolling 12 months
78.147
70.639
Net Debt/EBITDA
1,6
1,7
Net Debt/EBITDA adj. Pipeline
0,8
1,2
Net working capital
10,6
Net working capital increased by 23% to EUR 51 million (previous year: 42). Net debt, i.e. liabilities to
banks at EUR 193 million (previous year: 188), less bank balances of EUR 68 million (previous year:
68), rose on balance by 4% to EUR 125 million (previous year: 120). The ratio of net debt to EBITDA
(rolling 12 months basis) for a notional debt repayment maturity is 1.6 (previous year: 1.7) years.
Adjusted for the pipeline loans, for which there is no EBITDA match yet, the Net Debt/EBITDA ratio is
0.8 (previous year: 1.2) years.
█ HOTELS IN OPERATION AND IN DEVELOPMENT
As at 30 September 2014, 52 (previous year: 44) hotels with 11,975 (previous year: 9,755) rooms are
in operation. Of these, following the sale & leaseback deal with Union Invest and the addition of
Bremen, 21 (23) hotels with 3,564 (previous year: 4,003) rooms are owned and 31 (previous year: 21)
hotels with 8,411 (previous year: 5,752) rooms under long-term leases. The percentage of owned
hotels is 30% (previous year: 41%). The international percentage is 16% (previous year: 10%) with
1,930 (previous year: 941) rooms.
Sept 30, 2014
Pipeline
Hotels
Rooms
Sept 30, 2013 adj.
%
Hotels
Rooms
Abw. Vj.
%
Hotels
Rooms
in operation
Owned Hotels
21
3.564
30
23
4.003
41
-2
-439
Rented Hotels
31
8.411
70
21
5.752
59
10
2.659
Total in Operation
52
11.975
100
44
9.755
100
8
2.220
- as Germany
45
10.045
84
40
8.814
90
5
1.231
7
1.930
16
4
941
10
3
989
Owned Hotels
7
2.146
29
4
978
14
3
1.168
Rented Hotels
15
5.174
71
20
6.134
86
-5
-960
Total Pipeline
22
7.320
100
24
7.112
100
-2
208
- as International
under development
- as Germany
9
3.381
46
12
3.403
48
-3
-22
13
3.939
54
12
3.709
52
1
230
Owned Hotels
28
5.710
30
27
4.981
30
1
729
Rented Hotels
46
13.585
70
41
11.886
70
5
1.699
Total secured
74
19.295
100
68
16.867
100
6
2.428
- as Germany
54
13.426
70
52
12.217
72
2
1.209
- as International
20
5.869
30
16
4.650
28
4
1.219
- as International
Total secured
The development (pipeline) has 22 (previous year: 24) hotels with 7,320 (previous year: 7,112) rooms.
Of these, 7 (previous year: 4) hotels with 2,146 (previous year: 978) rooms are for the owned hotels
and 15 (previous year: 18) hotels with 5,174 (previous year: 6,134) rooms are developed through
leases with outside investors.
Overall, growth is contractually secured by 2017 to 74 (previous year: 68) hotels with around 19,300
(previous year: 16,900) rooms (no LOI). The six new projects signed relate to locations in Glasgow,
Barcelona, Basel, Zurich, Hamburg and Berlin with around 2,400 rooms. The percentage of
international activities grows by 2017 to 30% with around 5,900 rooms at that point.
█ MARKET AND OUTLOOK
The hotel market in Germany, as at September 2014, with an average 4.1% increase in RevPAR
showed strong growth, just below the European trend of 5.9%. The top destinations in Germany
recorded varying degrees of performance in RevPAR. Berlin (4.1%) and Hamburg (4.2%) performed
well. On the other hand both Munich (-0.3%) and Frankfurt (-0.1%) still lagged behind as a result of
the trade fair cycle which differed from the previous year. The European destinations of relevance to
us currently also posted good growth, with Brussels showing an increase of 4.2%, Edinburgh 7.4%
and Vienna 4.8% (Source: STR Global YTD September 2014).
No serious changes are expected in terms of market performance for Q4. Risks which might, however,
negatively impact business development are in plentiful supply given the conflicts in the Ukraine and
ISIS in Syria and Iraq. If EBOLA spreads there is also the risk of decreased travel activity similar to
what happened with the SARS epidemic in 2003.
Regardless of this, another five Motel One will be launched in Q4 in outstanding micro-locations at
Berlin-Leipziger Platz, Wien-Staatsoper, Magdeburg, Prague and London-Tower Hill.
Munich, October 2014

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