key facts - Motel One

KEY FACTS
█ 1ST QUARTER 2015:

Best Employer's Award for Motel One

Motel One hotels opened in London, Prague and Magdeburg

Sale of first generation hotels | PAGE 3

Revenue rises by 26% to EUR 64 million (PY: EUR 50 million) | PAGE 4

EBITDA rises to EUR 16 million (PY: EUR 14 million) | PAGE 4

Equity rises above EUR 300 million (PY: EUR 232 million) | PAGE 6
| PAGE 1
| PAGE 2
█ BEST EMPLOYER'S AWARD FOR MOTEL ONE
Which workplace in Germany has the happiest employees? This question was
investigated for the third time by the news magazine FOCUS in collaboration
with the business network Xing and the workplace rating portal Kununu.
Representing 22 industries, 70,000 employees took part in this biggest
German survey of its kind, coming from all hierarchy levels and age groups.
The questions covered development opportunities, salaries, the working
environment and working hours.
Motel One came first in the SME category "Catering, Accommodation,
Entertainment, Fitness and Tourism".
"We see this award as confirmation that we've succeeded in creating a
positive environment for our employees. It's yet another incentive for us to
keep investing in initial training and CPD," says Daniel Müller, Chief
Operations Officer at Motel One.
█ MOTEL ONE HAS OPENED IN LONDON, PRAGUE AND MAGDEBURG
The opening of the London hotel was a special date in the ongoing
expansion of this budget design hotel chain. Situated centrally and
close to two famous tourist sites – Tower Bridge and the Tower of
London – Motel One London-Tower Hill has entered the biggest and
most important hotel market in Europe. Motel One had an amazing
début in the capital of the UK – with 15 floors and 291 rooms, many
with a spectacular view. The Motel One is in the City of London, between two tube stations, Aldgate and Tower Hill, and also conveniently
within walking distance of numerous tourist sites. With its first hotel in
London, Motel One London-Tower Hill, the chain has set a major signal in London's budget segment, focusing on design, quality and attractive prices.
The "Golden City" goes turquoise. After Belgium,
Germany, the UK and Austria, Motel One celebrated
its first opening in the Czech Republic. Prague itself
is one of the most popular destinations for city breaks
in Europe. Motel One Prague has 141 rooms and is
a listed building which dates back to the early 20th
century. It can be found in the heart of the city's First
District and is conveniently within walking distance of
the Square of the Republic, the central station and
Charles Bridge.
Situated in a beautifully renovated 18th-century
building, directly on Domplatz (Cathedral Square),
next to the State Diet of Saxony-Anhalt, Motel
One Magdeburg opened its gates with 150
rooms. The listed building is supplemented by a
contemporary building, facing the river Elbe and
forming a good combination of history and the
present. With its central location in the Old Town,
this Motel One offers "great design for little
money". It is an ideal starting point for anyone
wanting to explore Magdeburg Cathedral or walk
along the river Elbe.
█ SALE OF FIRST GENERATION HOTELS
Motel One recently sold nine hotels, some on 31 January and others on 28 February 2015. Eight of
them had been owned and one under a lease, totalling 739 rooms in all. They were in Offenbach, Ratingen, Düsseldorf-City, Schweinfurt, Hannover, Kassel, Berlin-Dreilinden, Köln-West and MünchenPutzbrunn.
The buyer was the French property investment firm Foncière
des Régions, and the hotels will be operated under the Première Classe brand, together with the Louvre Hotels Group.
These nine small hotels, which are situated in more peripheral
locations, were the beginning of Motel One's success story,
starting with Offenbach in 2000. Since then, however, the Motel One brand has continued to evolve. Having acquired numerous large buildings in central locations, with spacious
lounges and bars, Motel One now has a very clear profile as a
budget design hotel chain and a good position on the market.
"The decision wasn't at all easy for us, particularly with a view
to our employees. However, we are confident that the clear
position of the Motel One brand is an important success factor
for us to survive in an increasingly competitive environment,"
says Dieter Müller, founder and CEO of the Motel One Group.
Accompanying this sale of first generation hotels, Foncière des Régions – represented by its subsidiary Foncière des Murs – also invested in various Motel One properties. Operating under a sale-andleaseback model, the French property investors bought Motel One Berlin-Mitte and Motel One Frankfurt-Airport. This involved the conclusion of long-term leases for both hotels. The total transaction volume was approx. EUR 74 million for 94% of shares in the property companies.
█ INCOME STATEMENT
The total number of hotels has remained at the same level as last year, with 48 in operation on 31
March 2015. The sale of the nine first generation hotels was offset by new openings. However, as the
new hotels are bigger, the overall capacity has risen by 16%, reaching 12,664 rooms (PY: 10,911).
Yet as each of the new hotels needed a start-up phase, occupancy remained slightly below the previous year's figure, at 66% (compared with 67%). Nevertheless, sales per rented room rose by 8.8%,
reaching EUR 85 (PY: EUR 79).
Total sales rose by 26% to
EUR 64 million (PY: EUR 50 million). The EBITDA improved to
EUR 16 million (PY: EUR 14 million). The EBIT after amortisation
rose to EUR 10 million (PY:
EUR 9 million).
The operating profit after interest
was EUR 8.3 million and thus
11% higher than in the previous
year (EUR 7.5 million).
The book profit gained from the
property transaction with Foncière
des Régions was EUR 37 million.
Earnings before taxes (EBT)
to
EUR
45
million
EUR 7 million), and earnings
taxes were EUR 34 million
EUR 5 million).
rose
(PY:
after
(PY:
The return on sales at the level of the EBITDAR margin had improved by 0.5 percentage points,
reaching 44.4% (PY: 43.9%). As the proportion of leases was higher than in the previous year, at 81%
(PY: 70%) of the total capacity (see structure on page 6), lease payments also rose analogously by 4
percentage points in relation to sales, reaching 19.7% (PY: 15.7%). This was partly offset by lower
interest payments and a lower level of amortisation. In all, however, when we look at the actual operating profit, the return on sales during the first quarter of 2015 remained at 13.0% (PY: 14.9%) and thus
1.9 percentage points below the previous year.
█ CASH FLOW STATEMENT
Cash flow from operating
activities increased to EUR 36
million in the first quarter of
2015 (PY: EUR 5 million).
The cash flow from investment activities, EUR 24 million (PY: -EUR 26 million),
was greatly impacted by the
substantial reduction in book
value caused by disposed
investments, which had resulted from the property transaction with Foncière des Régions.
These investments amounted to EUR 13 million (PY: EUR 26 million), and the change in book value
added another EUR 37 million to the book profit. Financing activities, too, were impacted by the transaction, at -EUR 14 million (PY: EUR 2 million). To pay for ongoing construction projects, new loans
were taken, totalling EUR 8 million (PY: EUR 4 million), while EUR 22 million (PY: EUR 1 million) was
repaid early. The total cash flow during the first quarter of 2015 was EUR 46 million (PY: -EUR 18
million). Liquid funds rose by 55% to a new record level of EUR 134 million (PY: EUR 86 million).
█ BALANCE SHEET
Fixed assets rose by 9% to EUR 399 million (PY: EUR 367 million). Equity increased to EUR 312 million (PY: EUR 232 million), thus amounting to a self-financing ratio of 78% (PY: 63%). Net working
capital went up 64% to EUR 52 million (PY: EUR 32 million). Net debts were reduced to EUR 35 million (PY: EUR 103 million) by high cash holdings and the unscheduled repayment of bank loans. The
net gearing decreased to 9% (PY: 28%). The ratio between net debt and EBITDA on 31 March 2015
amounted to a notional debt repayment period of 0.4 years (PY: 1.4 years).
█ HOTELS IN OPERATION AND DEVELOPMENT
The number of hotels operating as at 31 March 2015 was 48 with 12,664 rooms (PY: 10,911 rooms).
The number of hotels remained unchanged compared with the previous year, while their capacity increased by 1,753 rooms.
Nine new hotels were opened, with 2,492 rooms. This was accompanied by the sale of nine first generation hotels (739 rooms), of which eight had been owned, and one had been under a lease. However, there were also further changes in the ownership structure through four sale-and-leaseback transactions, involving 823 rooms. The number of leases thus rose to 81% of the total capacity (PY 70%).
In all, 11 hotels are currently under ownership, with 2,451 rooms (PY: 3,310 rooms).
Outside
Germany
Motel One is currently
operating 10 hotels
with 2,761 rooms (PY:
1,300 rooms). This is
22% of the total capacity.
The
development
pipeline comprises 20
hotels with 6,531
rooms (PY: 23 hotels
with 6,851 rooms).
When including both
sales and the secured
pipeline, Motel One
has contractual security for growing to 68
hotels (PY: 71) with
19,195 rooms (PY:
17,762).
Its own property portfolio has thus grown back to 19 hotels with 4,436 rooms (PY: 27 hotels with 5,255
rooms). Motel One's international capacities have risen to 31%, i.e. 5,994 rooms (PY: 5,489 rooms).
█ MARKET
As a travel destination, Germany displayed above-average 4% growth in 2014 – a figure which was
higher than for other European destinations. Based on the latest figures of the World Travel Monitor,
Germany came second again, with 49.7 million trips from other European countries, after Spain (55
million) and before France (38.2 million). At approx. 75%, Europe continues to be the feeder market,
as it continues to contribute the biggest share to Germany's incoming tourism.
This positive trend continued in the first quarter of 2015 and was reflected in the hotels' performance.
The hotels which report to STR Global recorded a 7.2% increase in RevPAR (revenue per available
room) for Germany, 5.9% for Austria and 6.8% for the UK. Moreover, good growth rates were being
reported for the top destinations that are of relevance to Motel One. The RevPAR for Berlin rose by
5.2%, Brussels 2.3%, Edinburgh 2.2%, Frankfurt 1.6%, Hamburg 6.9%, London 1.9%, Munich 15.5%,
Prague 11.4% and Vienna 1.4% (source: STR GLOBAL).
█ OUTLOOK
Following the openings in London, Prague
and Magdeburg, three further attractive
international destinations are now due to
be opened in 2015: Motel One WienHauptbahnhof, Amsterdam-RAI and Manchester-Piccadilly.
The Annual Meeting on 24 April 2015 was
attended by 350 Motel One executives
and included the opening of the Motel
One Campus with the One University in
collaboration with the International University of Applied Sciences Bad Honnef
(IUBH).
Where market performance is concerned, we are working on the assumption that, as in the past, demand will be fuelled by the megatrends of globalisation and urbanisation. Risks that may have a negative impact on travelling continue to be the conflict in Ukraine and the potential threat of terrorist attacks by IS.
Munich, May 2015