First-half 2019: Solid results and swift strategic plan execution

Press Release

JULY 31, 2019

First-half 2019:

Solid results

and swift strategic plan execution

REVENUE UP 27.8% TO €1,926 MILLION (+4.8% LFL)

EBITDA UP 30.1% TO €375 MILLION (+5.1% LFL)

RECURRING FREE CASH FLOW OF €144 MILLION

NET PROFIT, GROUP SHARE OF €141 MILLION

***

FULL-YEAR 2019 EBITDA TARGET

BETWEEN €820 MILLION AND €850 MILLION

Sébastien Bazin, Chairman and Chief Executive Officer of Accor, said:

"Once again, Accor reported another semester of solid results, in line with its objectives set for the medium term. Transformed into an asset-light player, the Group is now capitalizing on its growth drivers - strong complementary brands that are leaders in the majority of their markets, a sustained development, leading positions in the most touristic markets and a unique ecosystem for the benefit of the Group's millions of customers and partner-owners. The execution of our plan and our business momentum remain on track to achieve another record year in 2019."

The first-half 2019 results confirm the Group's excellent performance in the execution of its objectives. After adding 18,589 rooms (149 hotels) on an organic basis during the period, Accor had a portfolio of 717,314 rooms (4,892 hotels) and a pipeline of 202,000 rooms (1,153 hotels) at June 30, 2019, of which 78% in emerging markets.

Strong growth in consolidated revenue

Consolidated revenue for the first half of 2019 amounted to €1,926 million, up 4.8% like-

for-like (LFL) and up 27.8% as reported compared with first-half 2018.
In € millions	H1 2018(1)	H1 2019	Change	Change
(as reported)	(LFL)(2)
HotelServices	1,231	1,366	+10.9%	+5.0%
Hotel Assets	225	519	+130.5%	+7.1%
New Businesses	70	77	+10.3%	+4.5%
Holding & Intercos	(20)	(36)	N/A	N/A
TOTAL	1,507	1,926	+27.8%	+4.8%

1. Proforma financial information.
2. Like-for-like:at constant scope of consolidation and exchange rates.

Reported revenue for the period reflects the following factors:

• Changes in the scope of consolidation (acquisitions and disposals) had a positive impact of €324 million (+21.5%), due in particular to the contributions of Mantra and Mövenpick.
• Currency effects had a positive impact of €23 million (+1.5%), primarily relating to the US dollar (€30 million).

HotelServices revenue

HotelServices reported business volumes of €10.4 billion, versus €8.9 billion in first-half2018, and revenue of €1,366 million, up 5.0% like-for-like,reflecting positive

business trends and expansion of the hotel network.

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Management & Franchise (M&F) revenue amounted to €486 million, a like-for-likeincrease of 5.0% that reflects the Group's growth in all of its markets.

In € millions	H1 2018(1)	H1 2019	Change
(LFL)(2)
Europe	242	245	+5.7%
Asia-Pacific	97	100	(0.0)%
Middle East & Africa	38	52	+4.6%
North America, Central America & the Caribbean	59	65	+7.2%
South America	21	24	+16.1%
TOTAL	458	486	+5.0%

1. Proforma financial information.
2. Like-for-like:at constant scope of consolidation and exchange rates.

Consolidated RevPAR rose by 2.9% overall in first-half 2019.

In Europe, M&F revenue was up a sharp 5.7% on a like-for-like basis, underpinned by a 4.4% increase in RevPAR, all segments combined.

• In France, RevPAR was up 4.7% like-for-like, with solid performances from both the Greater Paris area and regional cities (up 5.3% and 4.2%, respectively). In June, business was boosted by the International Paris Airshow and the Women's Football World Cup.
• RevPAR growth remained moderate (+1.2%) in the United Kingdom, with London and the regional cities still posting highly contrasted performances. The increase in RevPAR in London (+4.3%) reflects a persistently active domestic tourism market, while RevPAR in regional cities (-2.1%) was impacted by uncertainties related to Brexit.
• In Germany, RevPAR increased by 3.9%, driven as expected by a favorable trade fair calendar.
• Spain recorded a significant 11.9% rise in RevPAR thanks to strong growth in demand.

Asia-Pacific posted stable M&F revenue on a like-for-like basis, despite a slight decline in RevPAR (-0.2%) in the first half. The trend in RevPAR nonetheless improved in the second quarter (+0.3% in Q2 vs. -0.6% in Q1). Expansion of the hotel network was offset by a decline in incentive fees, relating in particular to the renovation of the Fairmont Singapore Hotel.

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The Middle East & Africa region recorded an increase in M&F revenue of 4.6% despite moderate growth in RevPAR of 1.0%. A solid performance by hotels in Makkah during Ramadan in May brought in additional incentive fees during the period.

North America, Central America & the Caribbean reported an increase in M&F revenue of 7.2%, thanks notably to the ramp-upof the Fairmont Austin Hotel. RevPAR for the region rose by 0.8%.

Lastly, South America continued to post strong growth, particularly in Brazil, with revenue up 16.1% on the back of a 13.8% increase in RevPAR.

Services to Owners revenue, which includes the Sales, Marketing, Distribution and Loyalty division, as well as shared services and the repayment of hotel personnel costs, came to €879 million, versus €773 million in first-half 2018.

Hotel Assets & Other revenue

Hotel Assets & Other revenue amounted to €519 million, a like-for-like increase of 7.1%. The reported rise of 130.5% notably reflects the consolidation of Mantra in June 2018 and Mövenpick in September of the same year. Following the reclassification of Orbis' real estate operations as assets held for sale in accordance with IFRS 5, this segment is mainly driven by the Asia-Pacific region.

Excluding Orbis, the division's hotel base included 173 hotels and 31,893 rooms at June 30, 2019.

New Businesses revenue

New Businesses (concierge services, luxury home rentals, private sales of luxury hotel stays, and digital services for hotels) generated revenue of €77 million in first-half 2019, up 4.5% on a like-for-like basis. The 10.3% increase as reported reflects the acquisitions of ResDiary and Adoria in April and June 2018, respectively.

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EBITDA

Consolidated EBITDA amounted to €375 million in the first half of 2019, up 5.1% like-for-like and up 30.1% as reported compared with first-half 2018.

In € millions	H1 2018(1)	H1 2019	Change	Change
(as reported)	(LFL)(2)
HotelServices	326	344	+5.5%	+3.7%
Hotel Assets	29	97	+241.1%	+0.2%
New Businesses	(11)	(1)	+89.5%	+84.7%
Holding & Intercos	(55)	(65)	N/A	N/A
TOTAL	288	375	+30.1%	+5.1%

1. Proforma financial information.
2. Like-for-like:at constant scope of consolidation and exchange rates.

The EBITDA margin gained 0.4 of a point to reach 19.5%.

In € millions		Hotel	New	Hotel	Holding &	ACCOR
	Services	Businesses	Assets	Intercos
Revenue H1	19	1,366	77	519	(36)	1,926
EBITDA H1 19	344	(1)	97	(65)	375
EBITDA margin	+25.2%	(1.5)%	+18.7%	N/A	+19.5%
Revenue H1	18(1)	1,231	70	225	(20)	1,507
EBITDA H1 18(1)	326	(11)	29	(55)	288
EBITDA margin	+26.5%	(15.3)%	+12.7%	N/A	+19.1%

1. Proforma financial information.

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