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Rezidor SAS Hospitality Announces 2005 Financial
Results
BRUSSELS, Belgium, Feb. 9, 2006 - Today, Rezidor SAS Hospitality, which
operates Radisson SAS Hotels & Resorts, Regent International Hotels,
Park Inn, Country Inns & Suites and Hotel Missoni in Europe, the Middle
East and Africa, announced its results for 2005.
The company generated group wide revenue of 587.0 MEUR (approx. $702
million U.S.) as compared to 498.7 MEUR
(approx. $596 million U.S.) in 2004; an increase of 17.7 percent. Earnings
Before Taxes (EBT) was 31.6 MEUR (approx. $37.8 million U.S.) versus 4.2
MEUR (approx. $5 million U.S.) in 2004. This result includes a 6.2 MEUR
(approx. $7.4 million U.S.) gain from the sale of shares of the Radisson
SAS Hotel, London Stansted Airport. The key driver of the healthy financial
performance is an 11 percent growth in the company's Revenue Per Available
Room (RevPAR).
"Rezidor SAS is one of the fastest growing hospitality management companies
in the world, offering a great portfolio of brands, as well as being a
profitable business for our shareholders," said Kurt Ritter, president
& CEO of Rezidor SAS Hospitality.
In 2005, the group signed 29 new hotel contracts (15 Radisson SAS,
13 Park Inn and one Lifestyle) totaling nearly 5,000 rooms. The company's
strong business development strategy resulted in the opening of 21 new
Park Inn hotels and 16 new Radisson SAS Hotels & Resorts across Europe
and the Middle East. As of 2005, Rezidor SAS operates a portfolio of 263
hotels (including 46 properties under construction) encompassing approximately
50,000 rooms in 48 countries.
"One of our biggest assets is our growth strategy. We have grown by
16 percent this year in terms of number of rooms, which is the most significant
organic growth in Europe in the industry," adds Kurt Ritter.
Financial Highlights of the Year 2005
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RevPAR reached 67 EUR (approx. $80 U.S.), which is 6 EUR (approx. $7 U.S.)
(11 percent) greater than last year.
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Earnings Before Interest, Tax, Depreciation & Amortization (EBITDA)
for 2005 was 45.2 MEUR (approx. $54 million U.S.), versus 18.8 MEUR (approx.
$22.5 million U.S.) in 2004. The positive increase versus 2004 is mainly
due to comparable units increasing EBITDA by 20.0 MEUR (approx. $23.9 million
U.S.) versus last year.
"In 2005, the European hotel market continued to develop favorably with
a RevPAR increase of four percent to five percent on an average. With an
11 percent increase in RevPAR, Rezidor SAS has been able to capitalize
on this growth by being present in the right markets at the right time,"
said Knut Kleiven, deputy president & chief financial officer of Rezidor
SAS Hospitality.
An international company with Scandinavian roots, Rezidor SAS has a
strong presence in Scandinavia. With the Nordic capitals reporting
the largest increase in RevPAR this year, i.e. increases of 19 percent
in Copenhagen, 13 percent in Oslo, 10 percent in Stockholm and nine percent
in Helsinki, Rezidor SAS has benefited significantly from the market recovery
in these regions. Continental Europe experienced a wide range of
results with an average increase of three percent to four percent. Despite
the terrorist attacks in London, the hotel market reported a four percent
increase in RevPAR over the last year. The Middle East continues to perform
at a mixed pace, while Russia and Eastern Europe have shown tremendous
growth potential for revenue yield.
Expansion Strategy
The past year was significant for Rezidor SAS business development.
The market witnessed the openings of 37 new properties. The company also
signed a worldwide license agreement with the Italian fashion house Missoni,
to develop a new lifestyle hotel brand of the same name: Hotel Missoni.
The plan is to have 30 properties worldwide in 10 years.
Another instrumental deal in 2005 was the takeover of nine Park Inn
hotels in the UK. These additions to the Park Inn brand will further strengthen
the company's presence and brand awareness in the region. With its rapid
growth, Park Inn has become a significant hotel brand in the mid market
sector. Rezidor SAS plans to have a total of 100 Park Inn properties (opened
and contracted) by the end of 2006.
Radisson SAS Hotels & Resorts, known for its innovative design
and striking architecture, is now ranked the second largest brand in Europe.
Rezidor SAS proudly announced the addition of distinctive Radisson SAS
properties that will serve as prototypes for future generation of hotels:
The Radisson SAS in Frankfurt, with its one-of-a-kind shaped blue glass
facade, has already seized global recognition and numerous awards. The
Radisson SAS Media Harbour Hotel in Dusseldorf has become a popular and
trendy place to "see and be seen." The charming Radisson SAS Style
Hotel in Vienna has already made headlines for its sophisticated and elegant
interior design. Dubai's vibrant Media City features the Radisson SAS Hotel
as the first to open in the district. Other signature openings in 2005
were the Radisson SAS Resort at Disneyland Paris, a family vacation and
meeting resort; the Radisson SAS EU Hotel in Brussels, located adjacent
to the European Parliament; and the Radisson SAS Hotel Birmingham, the
tallest building in the city.
During the first quarter of 2005, the SAS Group (parent company of
Rezidor SAS Hospitality), concluded an agreement with U.S.-based Carlson
Hotels Worldwide. Under this agreement Carlson Hotels Worldwide acquired
25 percent in Rezidor SAS Hospitality in exchange for improved commercial
terms in the parties' master franchise agreement. The new agreement and
terms provided Rezidor SAS with a cost reduction of 6.0 MEUR (approx. $7
million U.S.) for the second half of 2005. The full year effect is estimated
at 11.0 MEUR (approx. $13 million U.S.) and will rise with increased operating
revenue.
In 2006, the company will continue with its vigorous development strategy
with an increased focus on developing Russia, the Commonwealth of Independent
States and Eastern European markets. The company already operates
five hotels in Russia and has recently signed two new agreements in Moscow
to develop the Radisson SAS brand. A newly-built Park Inn will soon open
its doors in Ekaterinburg, marking the entry of the company in the mid-market
segment in this region.
Rezidor SAS Hospitality opened 15 new hotels across Europe and the
Middle East from December 2005 to January 2006, and is well on track with
its target of having more than 700 hotels by 2015.
Rezidor SAS Hospitality is one of the fastest growing hospitality companies
in the world and currently has 263 hotels, encompassing over 50,000 rooms,
in operation and under development in 49 countries, with the aim to develop
700 hotels across its different brands by 2015.
In September 2002, Rezidor SAS announced a unique deal with US-based
Carlson Hotels Worldwide to expand selected Carlson brands in Europe, the
Middle East and Africa (EMEA). Rezidor SAS now operates Radisson SAS Hotels
& Resorts, Regent International Hotels, Park Inn and Country Inns &
Suites in these areas. Initially Rezidor SAS Hospitality was a wholly owned
subsidiary of the Stockholm-based SAS Group. In June 2005 Rezidor SAS Hospitality
completed the strategic agreement with US-based Carlson Hotels Worldwide,
which resulted in an enhancement of their long-time franchise partnership
into a shareholder agreement. Carlson Hotels Worldwide acquired a 25 percent
shareholding in Rezidor SAS Hospitality from SAS group in return for renegotiated
commercial terms of the parties' current Master Franchise Agreement. Rezidor
SAS Hospitality head office is based in Brussels.
In November 2005 Rezidor SAS signed a worldwide license agreement with
the Italian fashion house Missoni, to develop and operate a lifestyle hotel
brand of the same name: Hotel Missoni.
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