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Planning to Divest Between 2005 and 2008, Around €1,500 million in Assets |
Paris, March 8th, 2006
2005 Financial Results
2005 Consolidated revenue rose by 7.9% to €7,622 million. At constant scope of consolidation and exchange rates, the increase was 4.7%. Ebitdar (earnings before interest, taxes, depreciation, amortization and rental expense) totaled €1,986 million, an increase of 8.8% and Ebitdar margin stood at 26.1% of revenue. Profit before tax and non recurring items rose by 17.6% to €603 million. The increase reflected the gradual improvement in margins thanks to a more favorable hotel cycle, and efficient management of holding costs. Net profit, Group share rose by 42.9% to €333 million in 2005. Earnings per share rose to €1.55 from €1.17 in 2004, based on the weighted average 214,782,601 shares in 2005. At the Annual Meeting on May 10, 2006, Accor shareholders will be asked to approve an ordinary dividend of €1.15 per share, payable on May 17. Funds from operations increased 9.6% to €935 million. With €4,396 million in total equity and minority interests for €1,420 million in net debt at December 31, 2005, the gearing ratio stood at 32%, compared with 71% at December 31, 2004. Return on capital employed (ROCE) rose to 10.7% from 10.0% in 2004. On a recommendation made by executive management, the Board of Directors of Accor has validated the following first orientations: Accor, a Group Anchored In its Two Global Businesses:
In terms of operations, more powerful brands will enable a stronger revenue growth. Making the brands more attractive will also support human resources initiatives to attract the best talent. In terms of asset management, more powerful brands will strengthen Accor�s profile and thus its strategy of partnering with leading real estate companies around the world. Lastly, more powerful brands will enable Accor to speed growth under ownership, management or franchise operating structures. Accor�s ambition is to make brands even more attractive. These objectives bring Accor to create a strategic marketing department to know clients better, to favor the creation of innovative products, to advertise on the brands, to promote them through internet portals, and to revitalize loyalty programs.
This rationalization process means that the portfolio must be thoroughly
reviewed to identify strategic hotels to be managed under the appropriate
long term holding structure and non-strategic hotels that could be sold,
either outright or through sale & franchise back
Through this strategy, Accor plans to divest, between 2005 and 2008, around €1,500 million (USD 1,787 million) of assets.
The openings will be in mature countries (33%) and in emerging markets (67%). Overall, 70% of the openings will involve low capital-intensive solutions (management or franchise contracts), while 30% will be either owned or leased properties. To fit to these objectives, Accor would invest €2,700 million by to 2010 with a target of 15% return on investment. The Services business Accor Services has several objectives: to be #1 on all markets, to be the leader in innovations and to achieve double digit growth of its results. Accor Services has four lines of business. Three of which are dedicated to companies:
This market enjoys very high growth potential because of an extended
range of products and operations start-ups in new countries.
�Our 2005 results are in line with our objectives,� said Chief Executive
Officer Gilles Pélisson. �Moreover, with a much stronger financial
position, we can envision an ambitious development program particularly
in emerging countries to become the global leader in the economy and midscale
segments. Building on our core Hotels and Services businesses, we�ll leverage
our increasingly powerful brands to improve operating margin and return
on capital employed in the years ahead.�
With 168,000 people in 140 countries, Accor is the European leader and one of the world�s largest groups in travel, tourism and corporate services, with two major international activities:
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Contact:
Armelle Volkringer
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