Accor : 2020 First-half results presentation

A u g u s t 4 t h , 2 0 2 0

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looking statements or any other information that may be presented in this document to reflect new information, future events or for any other reason and any opinion expressed in this presentation is subject to change without notice.

The figures included in this presentation are restated after IFRS 5, excepted otherwise stated.

This presentation may include some information on specific transactions that shall be considered as projects only and may remain subject to certain approvals and other

conditions.

Opening remarks

Sébastien Bazin

Chairman & CEO

Covid-19 crisis takes the world decades back

Key facts

• Across all countries worldwide
• Worst World GDP drop in 40 years (IMF)
• Worst unemployment rate in 40 years (ILO)
• Lowest international travel in 30 years (WTO)

8

6

4

2

0

-2

-4

-6

GDP growth since 1980

	(1.0)%
	(3.0)%
Advanced economies
Developing economies	(6.1)%
World GDP

Source: IMF

Impact on Travel & Leisure industry is massive

About 1bn reduction expected

from 1.4bn in international travellers

$3.4tn Travel & Leisure contribution to GDP contraction and 121m job losses expected

757 810 856 913 930 893 952

10971143

9971044

1462

1408

1333

11971243

RevenueJobs

-39%-37%

	675 695 692
674
	2011	between
				Subprime
			crisis	610m	(-60%)
		2003
		SRAS			& 320m	(-80%)

2000

2004

2008

2012

2016

2020

330m 209m

$8.9tn $5.5tn

2019

2020

2019

2020

Source: UNWTO

Source: WTTC

Industry slowly recovering

% of countries with borders closed

									92%
							72%	74%
			53%										55%
8%
	Europe		NCAC		MEA		Asia-Pacific		South		World
													America
					Fully closed			Partially closed

Global RevPAR trends

US Europe China

-50%

-90%

29-Feb28-Mar25-Apr23-May20-Jun18-Jul

Source: IATA

Source: STR

H1 2020 Results

Jean-Jacques Morin

Deputy CEO

Severe financial impacts on H1 performance

Business Momentum

-59.3% L/L system RevPAR

with -88.2% in Q2

31.0% system Occupancy

with 14.7% in Q2

81% of hotel open

to date

Financial Performance

€917m Revenue

down (48.8)% L/L

€(227)m EBITDA

Recurring FCF

at €(473)m

Immediate measures deployed to protect earnings & financial headroom

Improved operating leverage		Reduced Cash Burn

Reinforced balance sheet

H1 20 EBITDA sensitivity to

RevPAR at less than €20m

60% G&A annual cost savings

achieved in H1 out of €60+m

announced in April

Hundreds of € millions

reduction in other costs

(SMDL, Hotel Assets & New Bus.)

H1 20 monthly

cash burn reduced to €80m

€60m reduction in recurring capital expenditures for FY20

Share buyback and dividend suspended until further notice

More than €4bn

liquidity position

at end-June 2020

• €2.4bn cash
• €1.8bn RCF undrawn

Accor key achievements despite the unprecedented crisis

Completed transactions		Recruited Loyal Guests		Pursued development

		+4.3% LTM net Organic
€1.06bn proceeds	+2.3m members	System Growth
	12k rooms added in H1

	66m loyalty members	Stable pipeline at 206k rooms
	28% of the portfolio
€429m reduction of
consolidated debt (1)

1. Reclassified as Held for sale in December 2019

+4.3% LTM net Organic System Growth

In rooms, as of June 2020

346k

	236k
	99k
47k	65k	44k	61k
	39k
			13k
			3k

Europe	Asia-Pacific	Middle East	South America	North America,
		& Africa		Central America
				& the Caribbean

Network

Hotels 5,099

Rooms 748k

Pipeline

Hotels 1,197

Rooms 206k

(59)% RevPAR decline in H1 20 with Q2 at (88)%				Occupancy Rate
			Average Room Rate
						RevPAR L/L

Europe

3.3%	5.1%	1.2%	1.0%

				-23.2%
					-90.6%
Q1 19	Q2 19	Q3 19	Q4 19	Q1 20	Q2 20

Asia Pacific

-0.6%	0.3%	-1.1%	-1.9%
				-33.7%
					-77.4%
Q1 19	Q2 19	Q3 19	Q4 19	Q1 20	Q2 20

1.0%

Rest of the World

5.0% 1.7% 2.8%

-20.0%

-93.0%

			Group
1.6%	4.0%	0.7%	0.6%

-25.4%

-88.2%

Q1 19

Q2 19

Q3 19

Q4 19

Q1 20

Q2 20

Q1 19

Q2 19

Q3 19

Q4 19

Q1 20

Q2 20

After April trough, progressive improvement

81% of hotel open to date

				81%
				to date
		38%
	as of end-April
Mar-20	Apr-20	May-20	Jun-20	Jul-20

RevPAR recovers after the trough

of April & May

-25%

-50%

-75%

-90%

Jan-20Feb-20Mar-20Apr-20May-20Jun-20Jul-20e

In € millions

HotelServices

Hotel Assets

Holding & Intercos

Total

H1 20 Group revenue down (49)% on a L/L basis

	H1		H1		Reported		L/L
	2019		2020		change		change

519	237	(54.4)%		(40.2)%

(36)	(16)	N/A		N/A
1,926	917
(52.4)%		(48.8)%

MGallery Hotel Perle d'Orient Cat Ba - Vietnam

Management & Franchise revenue down (72)% on a L/L basis

In € millions

Europe

	H1		H1		L/L
	2019		2020		change

ASPAC	100		29		(70.8)%

NCAC	65	23	(66.0)%

Total	486	139	(72.0)%	Sofitel Rabat Jardin des Roses - Maroc

EBITDA reflects a reduced sensitivity to RevPAR to less than €20m per point

In € millions

HotelServices

	H1		H1		Reported		L/L
	2019		2020		change		change

Hotel Assets	97	(10)	(110.5)%		(87.9)%

Holding & Intercos	(65)	(60)	N/A		N/A
Total	375	(227)
(160.5)%		(153.7)%

La Coupole MGallery - Vietnam

EBITDA impact on HotelServices notably driven by SMDL

M&F		Services to Owners		Hotel
		Services

In € millions

SMDL(1)

Reimbursed

Other

STO (2)

costs

services

(1)+(2)

(1)

(2)

139

(a)

(b)

(c)

(a)+(b)+(c)

650

Revenue

164

297

49

511

H1 2020

														1366
H1 2019		Revenue		486		354		470		55		879

(1) SMDL: Sales Marketing, Distribution & Loyalty

1. STO: Services to Owners

Impact on Hotel Assets mitigated by variabilized costs and actions

Portfolio

30k

rooms

12k

leased rooms in

Brazil

7k

leased rooms in

Revenue

(56)% L/L

RevPAR decrease

€237m revenue down (40.2)% L/L

€106m revenue

from "Other"(1)

EBITDA

€(10)m EBITDA

down (87.9)% L/L

mitigated through

• Severance in Brazil
• Variable lease in Brazil
• Furloughing in Europe & Australia

1. ASPAC and "Other" includes Timeshare (named Accor Vacation Club), Strata (i.e. Management Letting Rights in Australia) and AccorPlus (a pay-to-join loyalty program)

From EBITDA to Net Profit

In € millions		H1 2019		H1 2020
EBITDA		375		(227)
Depreciation, amortization and provision		(141)		(137)
EBIT		234		(363)
Share of net losses of associates and JVs		(14)		(353)	(a)
Non-recurring items (o/w impairments)		(6)		(1,000) (b)
Operating profit		214		(1,716)
Net financial expense		(38)		(52)
Income tax		(43)		(5)
Minority interests		(8)		2
Profit from continuing operations		125		(1,772)
Profit from discontinued operations		16		259	(c)
Net profit for the half-year		141		(1,512)

(a) • AccorInvest

1. • Huazhu
   • sbe
2. Non-currentassets impairment (13% of the book value)

1. Capital gain from Orbis disposal

Monthly cash burn lowered from €100m to €80m

In € millions

EBITDA

Cost of net debt

Income tax (cash)

Reimbursement of lease liabilities

Non-cash items & other

FUNDS FROM OPERATIONS

Recurring investment

Working capital and contract assets/liabilities

RECURRING FREE CASH FLOW

Cash conversion rate(1)

H1 2019		H1 2020

375 (227)

1. (28)

1. 1

1. (47)

54 69

293 (232)

1. (61)

(74)	(180) (a) (a)

144 (473)

76% N/A

Fee collection deferrals due to Covid-19

1. Cash conversion rate = (EBITDA - Recurring investment - reimbursement of lease liability) / (EBITDA - reimbursement of lease liability).

Improved liquidity position & reduced net debt

Liquidity position

• June 2020
  More than €4bn liquidity position
• July 2020
  Tax cash refund
  (€300m)

Net debt From December 2019 to June 2020

	€(119)m	€290m
	€(300)m
€1,003m	€(161)m
€1,333m
€(473)m		€1,092m

Net Debt	Orbis Recurring Hybrid	SBB	Others	HQ	Net debt
Dec. 2019	FCF			building	June 2020
				(IFRS 5)

Closing remarks

Sébastien Bazin

Chairman & CEO

Reacting to the unprecedented shock and preparing for the future

Taking care of the local communities

(Staff, Guests, Owners)

Restore confidence in travelling

Launch of AllSafe label certification

Learn from the crisis implications

• Changes in guests behaviors
• Stress test of the business model

Pullman Ciawi Vimala Hills - Indonesia

Build a strong future for Accor

• Simplify the organization in line with our asset-light portfolio
• Focus on high-growth levers (geographies, segments, brands)
• Scale-upcore businesses to increase performance & de-risk our portfolio

In depth "Zero-Based Budget" process completed

A granular & disciplined approach

• Build fact base
  over 7,000 activities mapped
• Select fact based improvement areas targeting non value-addedactivities
• Identify and quantify gross savings getting bottom-up buy-in
• Disciplined execution plan

Leading to saving levers

• Eliminate & streamline tasks
• Management structure
• Frugality
• Real estate
• Mutualisation of efforts
• Automation
• Contractors

€200m RECURRING savings on €1.2bn HotelServices cost base

M&F and Holding

• Management structure
• Organizational simplification
• Automation

Sales, Marketing, Distribution & Loyalty

• Contractors
• IT

20-month payback

•	2/3 achieved as of end-2021,
•	100% achieved as of end-2022	Mgallery Veranda Resort Pattaya - Thaïland

Timely execution at the top of the management agenda

Moving from an asset-light model to an asset-light company

Accor will emerge stronger and is fully ready to rebound

• Leaner cost structure & more focused organization
• Higher profitability and cash conversion potential
• Solid balance sheet

Driven by long-term vision & values

• High sense of responsibility
• Strongly committed to environment, inclusion & solidarity

Accor brands sought after like never before

• Enhanced attractivity to guests and owners
• Driving market share & dynamic development

Novotel Sriracha & Koh Sichang Marina Bay - Thailand

Appendices

Novotel Melbourne South Wharf - Australia

H1 margin for Management & Franchise

		In € millions		Management &		Services to
				Franchise		Owners
		Revenue	139		511
H1 2020
			(0.0)%		(27.5)%
		Margin
		Revenue	486		879
H1 2019
		Margin	72.6%		(1.1)%

HotelServices

650

(21.6)%

1,366

25.2%

Grand Plaza Mövenpick Media City

H1 2020 Revenue - From Like-for-Like to Reported

(48.8)%

(3.0)%

(0.7)%

(52.4)%

Like-for-Like

€(939)m

Perimeter

€(57)m

Currency

€(13)m

Reported

€(1,009)m

HotelServices: (52.8)% L/L (1)

New businesses: (40.5)% L/L

Hotel Assets: (40.2)% L/L

M&A

Slight negative currency effect

• USD: €7m
• AUD: €(10)m
• BRL: €(10)m

(1) Comparable (comp.) revenue growth - includes fees linked to organic expansion, at

constant exchange rates

In € millions

HotelServices

Hotel Assets

Holding & Intercos

Total

Q2 20 Group revenue down (79)% on a L/L basis

	Q2		Q2		Reported		L/L
	2019		2020		change		change

260	30	(88.3)%		(67.2)%

(19)	(5)	N/A		N/A
1,002	149
(85.1)%		(79.2)%

Fairmont El San Juan - Puerto Rico

In € millions

Europe

ASPAC

Q2 20 Management & Franchise revenue

	Q2		Q2		L/L
	2019		2020		change

45	(1)	(100.7)%

NCAC	34		2		(93.1)%

Total	261	(11)	(103.8)%	21c Chicago - USA

Q2 2020 Revenue - From Like-for-Like to Reported

(79.2)%

(5.0)%

(0.9)%

(85.1)%

Like-for-Like

€(794)m

Perimeter

€(50)m

Currency

€(9)m

Reported

€(853)m

HotelServices: (84.3)% L/L (1)

New businesses: (65.4)% L/L

Hotel Assets: (67.2)% L/L

M&A

Slight negative currency effect

• USD: €1m
• CAD: €(1)m
• AUD: €(3)m
• BRL: €(4)m

(1) Comparable (comp.) revenue growth - includes fees linked to organic expansion, at

constant exchange rates

Sofitel Mexico City Reforma - Mexico

1

RevPAR

RevPAR - Systemwide

	Q2 2020			H1 2020
OR	ARR	RevPAR	OR	ARR	RevPAR

Lux. & Upscale	13.9	-53.6	79	-46.3	11	-89.4	29.3	-36.5	133	-12.0	39	-60.9
Midscale	14.5	-58.4	57	-30.7	8	-87.5	31.5	-37.1	79	-8.6	25	-58.4
Economy	15.3	-57.6	38	-31.3	6	-87.1	31.8	-36.5	50	-10.0	16	-58.6
SYSTEMWIDE	14.7	-56.7	54	-36.9	8	-88.2	31.0	-36.6	80	-10.7	25	-59.3

RevPAR - Geographical breakdown (1/2)

			Q2 2020					H1 2020
		OR		ARR	RevPAR		OR	ARR	RevPAR
Lux. & Upscale	5.3	-70.2	123	-22.2	6	-97.3	24.2	-42.1	147	-9.5	36	-67.2
Midscale	8.5	-67.5	73	-23.5	6	-92.0	28.2	-41.2	88	-7.7	25	-62.8
Economy	11.3	-65.1	54	-19.9	6	-88.3	30.2	-39.8	60	-8.3	18	-60.5
EUROPE	9.8	-66.3	64	-26.6	6	-90.6	28.8	-40.5	77	-9.6	22	-62.1
Lux. & Upscale	22.3	-41.1	71	-32.1	16	-76.6	30.5	-33.5	104	-8.0	32	-56.4
Midscale	24.1	-46.8	50	-29.1	12	-77.8	35.8	-33.1	70	-8.3	25	-52.6
Economy	34.2	-40.5	25	-38.9	9	-74.7	40.4	-32.1	36	-15.3	14	-54.3
ASPAC	26.1	-43.2	47	-34.7	12	-77.4	35.2	-33.0	70	-10.8	25	-54.7

RevPAR - Geographical breakdown (2/2)

			Q2 2020					H1 2020
		OR		ARR	RevPAR		OR	ARR	RevPAR
Lux. & Upscale	11.3	-52.5	92	-39.5	10	-90.7	32.2	-33.3	126	-14.8	41	-58.8
Midscale	24.5	-36.1	59	-7.9	14	-59.4	41.3	-23.3	69	-3.6	29	-36.7
Economy	17.0	-43.4	43	-8.9	7	-72.8	34.8	-27.8	55	-1.8	19	-43.7
MEA	14.9	-47.6	71	-40.6	11	-87.3	34.4	-30.3	100	-15.3	34	-55.6
Lux . & Upscale	7.7	-68.8	87	-58.3	7	-94.9	29.0	-43.1	217	-11.4	63	-64.5
Midscale	5.3	-74.7	98	-23.1	5	-98.7	33.7	-44.5	130	-6.7	44	-62.5
Economy	3.7	-56.9	6	+21.3	0	-92.9	26.4	-34.2	37	-4.9	10	-59.3
NCAC	7.0	-68.5	84	-54.1	6	-95.5	29.3	-42.5	191	-11.5	56	-64.3
Lux. & Upscale	4.3	-50.4	-23	-56.4	-1	-92.9	24.1	-31.8	109	+9.8	26	-49.5
Midscale	6.1	-52.9	-1	-36.4	0	-94.4	26.7	-31.5	55	+1.8	15	-53.4
Economy	3.8	-51.0	-11	-31.8	0	-95.3	25.1	-28.8	35	+0.9	9	-52.5
SOUTH AMERICA	4.4	-51.4	-9	-37.1	0	-95.1	25.4	-29.9	48	+2.1	12	-52.4

RevPAR - France

	Q2 2020			H1 2020
OR	ARR	RevPAR	OR	ARR	RevPAR

Lux. & Upscale	5.5	-70.4	187	-18.2	10	-94.0	25.3	-42.8	189	-9.1	48	-65.9
Midscale	9.0	-65.5	86	-23.5	8	-91.0	27.3	-39.4	101	-7.6	28	-62.1
Economy	14.1	-60.3	54	-17.7	8	-85.1	31.1	-36.8	60	-6.7	19	-57.7
FRANCE	12.2	-62.2	64	-26.8	8	-88.6	29.7	-37.8	76	-9.5	23	-60.4

Banyan Tree Phuket - Thailand

2

Portfolio

Portfolio as of June 30th, 2020 (1/2)

	OWNED & LEASED	MANAGED	FRANCHISED	TOTAL
	# hotels	# rooms	# hotels	# rooms	# hotels	# rooms	# hotels	# rooms
Luxury & Upscale	5	2,060	137	25,829	64	11,309	206	39,198
Midscale	29	3,608	351	58,782	596	64,146	976	126,536
Economy	21	3,270	600	78,482	1,250	99,013	1,871	180,765
EUROPE	55	8,938	1,088	163,093	1,910	174,468	3,053	346,499
Luxury & Upscale	12	2,566	272	66,796	63	10,676	347	80,038
Midscale	27	4,362	268	63,028	143	22,518	438	89,908
Economy	1	186	196	36,283	252	29,562	449	66,031
ASPAC	40	7,114	736	166,107	458	62,756	1,234	235,977
Luxury & Upscale	2	525	159	38,861	6	956	167	40,342
Midscale	2	235	54	10,740	12	2,566	68	13,541
Economy	5	826	46	8,747	10	1,727	61	11,300
MEA	9	1,586	259	58,348	28	5,249	296	65,183

Portfolio as of June 30th, 2020 (2/2)

	OWNED & LEASED	MANAGED	FRANCHISED	TOTAL
	# hotels	# rooms	# hotels	# rooms	# hotels	# rooms	# hotels	# rooms
Luxury & Upscale	1	53	74	28,256	9	3,105	84	31,414
Midscale	0	0	7	2,711	7	1,400	14	4,111
Economy	0	0	20	2,649	4	503	24	3,152
NCAC	1	53	101	33,616	20	5,008	122	38,677
Luxury & Upscale	0	0	27	5,863	5	1,094	32	6,957
Midscale	15	2,586	74	10,647	17	2,277	106	15,510
Economy	48	9,794	74	12,024	134	17,184	256	39,002
SOUTH AMERICA	63	12,380	175	28,534	156	20,555	394	61,469
Luxury & Upscale	20	5,204	669	165,605	147	27,140	836	197,949
Midscale	73	10,791	754	145,908	775	92,907	1,602	249,606
Economy	75	14,076	936	138,185	1,650	147,989	2,661	300,250
TOTAL	168	30,071	2,359	449,698	2,572	268,036	5,099	747,805

Sofitel Beijing Central - Beijing, China

3

Exchange rates

1€ = X foreign currency

Australian Dollar (AUD)

Brazilian Real (BRL)

Canadian Dollar (CAD)

Egyptian Pound (EGP)

British Sterling (GBP)

American Dollar (USD)

Q2 2020 Exchange Rates

Q2 2019	Q2 2020	Q2 2019
Average Rate	Average Rate	vs. Q2 2020

1.60	1.69	(5.0)%
4.41	5.88	(25.1)%
1.50	1.53	(1.4)%
19.13	17.47	+9.5%
0.87	0.89	(1.5)%
1.12	1.10	+2.2%

1€ = X foreign currency

Australian Dollar (AUD)

Brazilian Real (BRL)

Canadian Dollar (CAD)

Egyptian Pound (EGP)

British Sterling (GBP)

American Dollar (USD)

H1 2020 Exchange Rates

H1 2019	H1 2020	H1 2019
Average Rate	Average Rate	vs. H1 2020

1.60	1.68	(4.6)%
4.34	5.37	(19.1)%
1.51	1.50	+0.5%
19.59	17.43	+12.4%
0.87	0.87	+0.1%
1.13	1.10	+2.6%

Pullman Bangkok Kong Power - Thailand

4

Glossary

Glossary

Region organization

• Europe (including France & Switzerland)
• MEA: Middle-East and Africa
• ASPAC: Asia Pacific Region
• NCAC: North & Central America & Caribbean
• South America

Like-for-like (L/L) definition for P&L figures

• Foreign exchange changes vs. Euro are cancelled applying the n-1 exchange rate to year n
• Perimeter effects (i.e. acquisitions and disposals) are neutralized:

1. Excluding impacts from disposals defined as a change in the consolidation methodology of a given entity o Excluding impacts from acquisition defined as a change in the consolidation methodology of a given
   entity or as the acquisition of an activity or company
   o Excluding impact from subsidiaries hotel openings & closings
   o Organic system growth and churn are not neutralized on HotelServices revenue