PRESS RELEASE

Paris, July 15th, 2021

2021 half-year results:

First signs of recovery after a semester impacted by sanitary measures

First semester results impacted by sanitary measures in Europe

For the European hotel industry, the first semester remained impacted by the sanitary crisis and the administrative restrictions implemented all over Europe. However, impacts defer amongst the different European countries. In Germany and in the UK (respectively 24% and 13% of our hotel portfolio), strong and long lockdowns generated a significant RevPAR1 decrease of respectively 71% and 58% compared to 2020. France (33% of our portfolio), where domestic demand remains important, benefited from lower constraining measures, leading to a RevPAR decrease of 30%.

First signs of recovery since May

Following the first effects of the vaccination programmes now under way, European countries have gradually released their administrative restrictions. It started with the United Kingdom, which benefit since May from a sustained recovery in activity. France followed in the middle of May, and lastly Germany at the end of June. Occupancy rates2 in June are around 54% in the UK, 40% in France and 30% in Germany, with regions posting higher occupancy rates than capital cities. Summer 2021, as summer 2020, should benefit from high levels of occupancy due to the will and need to travel as soon as restrictions are lifted.

Strong partnerships with hotel operators

In this context, Covivio Hotels, a long-standing partner of the leading hotel operators, has been working to implement solutions to help them through this crisis. New agreements reached with 4 lease tenants (NH Hotels, Barcelo, Meininger, Melia Hotels International), representing 27% of fixed rents portfolio, have eased operators' difficulties through rent-free periods or payment facilities. On the first semester, the rent collection rate was 85% (69% including rent-free periods and deferred payment deals).

Balance sheet strengthening

Covivio Hotels successfully proceeded to its €250 million capital increase in cash with preferential subscription rights. The funds raised have been used to reimburse debts ending in 2022/2023 and improved the Loan-to-Value (LTV) ratio by nearly 400 bps. Covivio Hotels net debt stands at €2,451 million compared to €2,690 million at the end of 2020.

1 Revpar : Revenue per room; source: MKG to the end of May 2021

2 Source : Morgan Stanley

Limited review procedures were carried out on the half-year financial statements. The Statutory Auditors' report on the half-year financial information is being prepared. Investment data are presented including duties Disinvestment data are presented excluding duties.

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COVIVIO HOTELS

PRESS RELEASE

During this half-year, Covivio Hotels sold €52 million of assets, slightly above 2020 year-end appraisal values, including 32 M€ of new signed sale agreements. Divestments mainly concern retail assets.

At the end of June 2021, the Loan To Value (LTV) ratio including duties is down at 38.6% (41.9% at the end of 2020). The ICR ratio stands at 2.24 (compared with 2.20 at the end of 2020). Given this level in a troubled environment, Covivio Hotels doesn't anticipate any covenant breach for 2021 that would need a new suspension from its lenders.

The average maturity of Covivio Hotels' debt is 4.5 years - no major debt term will occur is due in the next 12 months - slightly up compared to end 2020 (+0.1 year).

Covivio Hotels has cash and undrawn credit lines of €253 million as of June 30th, 2021.

Thanks to the support of its shareholders, Covivio Hotels will be able, after this major crisis, to pursue its development with a solid balance sheet.

Stabilization of portfolio values

At the end of June 2021, Covivio Hotels held a unique hotel portfolio of €5,805 million (€6,492 million at

100%) in Europe. This strategic portfolio is characterised by:

  • High-qualitylocations: Booking.com location average grade raised at 8.8 / 10
  • Diversified portfolio: in terms of countries (12 countries, none representing more than 33% of the total portfolio), and segment (69% economic/midscale and 31% upscale)
  • Major hotel operators with long-term leases: 16 hotel operators with an average lease duration of 13.9 years

The Covivio Hotels portfolio appraisal value decreased by -1.0% on a like-for-like basis: values are stable regarding the whole portfolio, except for the UK for which appraisers have changed recovery hypothesis and discount rate.

Group Share

Value 2020

Value H1

Lfl1 change

(€M, exluding duties)

2021

Hotels - Lease properties

4 644

4 626

-1,3%

Hotels - Operating properties

1 174

1 179

0,1%

Total Hotels

5 818

5 805

-1,0%

Actifs non stratégiques (commerces)

120

80

-1,9%

Total Covivio Hotels

5 937

5 885

-1,0%

1 Lfl : Like for like

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COVIVIO HOTELS

PRESS RELEASE

Hotel Portfolio breakdown at June 30th, 2021

6%

7%

Revenues at the end of June heavily impacted by European lockdowns

In the first half of 2021, Covivio Hotels' income fell by -20.0%, on a like-for-like basis, standing at €67.6 million compared to €71.7 million as of June 30th, 2020.

€ million

H1 2020

H1 2020

H1 20201

H1 2021

Group Share

Group Share

LFL

Group

100%

Group Share

100%

(%)

(%) (*)

Share

Hotel Lease properties (Variable rents)

9,7

9,7

7,4

7,4

-23,6%

-26,4%

Hotel Lease properties (Rents) - UK

0,0

0,0

0,0

0,0

n/a

n/a

Hotel Lease properties (Others)

60,1

52,7

68,1

60,8

-15,5%

0,0%

Hotel Operating properties (EBITDA)

3,3

3,2

-3,8

-3,6

-210,6%

-168,1%

Total Hotel Revenues

73,1

65,6

71,7

64,6

-1,5%

-20,2%

Non-strategic (Retail)

6,1

6,1

3,0

3,0

-50,0%

-16,9%

Total revenues Covivio Hotels

79,2

71,7

74,7

67,6

-5,6%

-20,0%

(*) On a like for like basis

Hotel lease properties (80% of the hotel portfolio)

  • Variable-renthotels: the portfolio, most of which is let to AccorInvest (22% of the total hotel portfolio), in France and Belgium, and made up of economic (Ibis) and midscale (Novotel, Mercure) hotels, was largely impacted by the drop of hotels turnovers, some of them also remaining closed, particularly in Belgium.
    As rents are fully indexed to revenues, this portfolio brought in revenues of €7.4 million, 26% down compared to half-year 2020 (-24% for hotels located in France, -44% in Belgium). As a reminder, the first semester 2020 was impacted by the sanitary crisis only onwards from March, after 2 especially favourable months.
  • Hotels in the United Kingdom let to IHG(13% of the hotel portfolio)
    The 12 hotels in the portfolio were closed from January to March. Hotels reopenings began in April and continued until June. Given these exceptional circumstances, no rent was recognised in this scope for the first six months of 2021.

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COVIVIO HOTELS

PRESS RELEASE

  • Other hotel lease properties(44% of the hotel portfolio): fixed-rent hotel real estate let to B&B,
    NH Hotels, Motel One, Barcelo, Hotusa, etc. on long leases. Change in like for like is stable: the agreements secured with tenants have limited the drop in income to only -€0.8 million over the semester offset by positive indexation (+€0.5 million)

Hotel operating properties (20% of the hotel portfolio)

These hotels are mostly located in Germany (mainly Berlin) and to a lesser degree in northern France. Most of German hotels faced a longer and stricter lockdown than in France. June occupation rates are still higher in France (34%) than in Germany (23%). Globally their performance fell €6.8 million group share compared to half-year 2020. This decrease includes French state aids and insurance indemnities relating to operating losses.

Financial indicators at the end of June 2021

The EPRA NRV (Net Reinstatement Value) reaches €3,777 million up 5.5% over six months. Per share, the fall is 5.6%, due to the capital increase proceeded in June at a subscription price of €16 per new share.

The EPRA NTA (Net Tangible Asset) stands at €3,384 million, and €22.8/share.

The EPRA NDV (Net Disposal Value) is €3,025 million (compared with €2,819 million at the end of December 2020), a 7.3% increase and stands at €20.4/share.

EPRA Earnings is €26.1 million (compared with €32.3 million at June 30th, 2020), a 19.3% fall due to reduced income as a result of hotel closures. EPRA Earnings per share is €0.19 as of June 30th, 2021, compared to €0.26 on the same date in 2020.

2021 Outlook

If Europe's hotel industry continued to suffer the consequences of the pandemic during the first semester, the recovery that started in June should endure and gather pace throughout the second semester. Covivio Hotels will then be able to count on the quality and diversity of its let portfolio, operated by leading European and international operators, to bring about long-term growth in its results.

CONTACTS

Press Relations

Investor Relations

Géraldine Lemoine

Quentin Drumare

Tél : + 33 (0)6 17 09 70 66

Tél : + 33 (0)6 37 21 43 88

geraldine.lemoine@covivio.fr

quentin.drumare@covivio.fr

Laetitia Baudon

Tel: + 33 (0)1 44 50 58 79

laetitia.baudon@shan.fr

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COVIVIO HOTELS

PRESS RELEASE

ABOUT COVIVIO HOTELS

Covivio Hotels specialises in holding lease properties in the hotel industry. Société d'Investissements Immobiliers Cotée (SIIC), real estate partner of leading hotel industry operators, Covivio Hotels holds a portfolio worth €6.5 billion.

Covivio Hotels is rated BBB+/Stable outlook by Standard and Poor's.

ABOUT COVIVIO

Thanks to its partnering history, its real estate expertise and its European culture, Covivio is inventing today's user experience and designing tomorrow's city.

A preferred real estate player at the European level, Covivio is close to its end users, capturing their aspirations, combining work, travel, living, and co-inventing vibrant spaces.

A benchmark in the European real estate market with a portfolio of €26 billion, Covivio offers support to companies, hotel brands and territories in their pursuit for attractiveness, transformation and responsible overall stock.

Covivio's mission is accordingly to create well-being and lasting relationships, and the Company embodies its role as a responsible real estate operator with all its stakeholders: customers, shareholders and financial partners, internal teams, local authorities, future generations, etc. Further, its living, dynamic approach opens up exciting project and career prospects for its teams.

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Covivio Hotels SCA published this content on 23 July 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 23 July 2021 09:17:02 UTC.