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Rezidor 2nd Qtr 2009 Revenue Decreased by -21.9%; Focusing on Cash
Protection and Growing Fee-based Managed and Franchised Rooms



STOCKHOLM, Sweden, July 22, 2009 -  Rezidor Hotel Group AB (publ) (STO:REZT): “The global recession continues to impact the hotel market and industry RevPAR in Europe fell more than 20% in the first six months of the year compared to the same period in 2008. During the second quarter, the market showed signs of stabilisation in occupancy decline, while room rates continued to drop further. Rezidor has seen a less adverse impact in Norway, Sweden, the UK and South Africa than in the rest of the EMEA, says Kurt Ritter, President and CEO of The Rezidor Hotel Group.

“Visibility is still very limited and Rezidor maintains its focus on cost management and cash flow. Our aggressive cost cutting programme is proceeding with expected annual savings of around MEUR 30. So far this year, we have managed to achieve total savings of MEUR 12.5. In addition, we expect to reduce central costs by 10% on an annual basis,” Ritter continues.

Rezidor will maintain its strategy of further reducing risks in the portfolio by growing with fee-based managed and franchised rooms.

“Despite the downturn, we seek profitable opportunities and continue to reduce risks by adding fee-based managed and franchised rooms to our portfolio. In the first six months of the year, we added more than 3,100 new rooms to operation, 87% of which were fee-based. In addition, we added close to 5,000 new rooms to our pipeline, that currently features over 23,000 rooms, of which 90% are fee-based”.

“Even considering the recent declines in RevPAR, emerging markets remain strong performers, and we continue to believe that there is a fundamental and structural need for internationally branded hotels such as those in the Rezidor portfolio. 84% of the new rooms contracted this year are in Eastern Europe, the Middle East and Africa. A major part of our total pipeline, close to 75%, is also in these emerging markets,” Kurt Ritter concludes.
 

Second quarter, 2009
  • RevPAR Like-for-Like decreased by -22.9% to EUR 66.6 (86.4). Like-for-Like Occupancy was 63.9% (71.6).
  • Revenue decreased by -21.9% or MEUR -48.6 to MEUR 173.2 (221.8). On a Likefor-Like basis Revenue decreased by -20.5%.
  • EBITDA was MEUR 7.1 (37.1), and EBITDA margin was 4.1% (16.7).
  • It is estimated that revenue was negatively impacted by MEUR 12-14 and EBITDA by MEUR 5-6 compared to last year due to the timing of Easter.
  • Loss after tax amounted to MEUR -2.5 (21.7).
  • Basic and diluted earnings Per Share amounted to EUR -0.02 (0.15).
Six month ending June, 2009
  • RevPAR Like-for-Like decreased by -18.8% to EUR 62.3 (76.7). Like-for-Like Occupancy was 59.2% (65.8).
  • Revenue decreased by -18.3% or MEUR -73 to MEUR 325.8 (398.8). On a Likefor-Like basis Revenue decreased by -16.6%.
  • EBITDA was MEUR -7.8 (37.3), and EBITDA margin was -2.4% (9.4).
  • Loss after tax amounted to MEUR -21.6 (14.7).
  • Basic and diluted earnings Per Share amounted to EUR -0.15 (0.10).
  • Cash flow from operating activities amounted to MEUR -19.1 (24.6). Total available cash at the end of the period, including unutilised credit facilities, amounted to MEUR to 89.0 (138.1 in June 08). Net debt/cash amounted to MEUR -16.7 (9.9 in June 08).
Other developments
  • Rezidor added ca 2,400 rooms into operations in the second quarter, of which 84% were managed or franchised. During the first six months, Rezidor added ca 3,100 rooms, of which 87% were managed or franchised.
  • Rezidor signed 11 contracts for new hotels in the second quarter featuring a total of ca 2,600 rooms. During the first six months, Rezidor signed 25 contracts for new hotels, totalling ca 5,000 rooms. 100% of the new rooms contracted in H1-2009 were managed or franchised.
  • The first Missoni hotel was opened in Edinburgh in the UK in the second quarter.
  • The cost savings plan generated savings of MEUR 8.0 during the second quarter and MEUR 12.5 during the first sixth months of the year. 
Comment from the CEO - Kurt Ritter

“The global recession continues to impact the hotel market and industry RevPAR in Europe fell more than 20% in the first six months of the year compared to the same period in 2008. During the second quarter the market showed signs of stabilisation in occupancy decline, while room rates continued to drop further. Rezidor has seen a less adverse impact in Norway, Sweden, the UK and South Africa.

Visibility is still very limited and we maintain focus on cost management and cash flow. Our aggressive cost cutting programme is proceeding with expected annual savings of around MEUR 30.

So far this year we have managed to achieve total savings of MEUR 12.5. In addition, we expect to reduce central costs by 10% on an annual basis.

Despite the downturn, we seek profitable opportunities and continue to reduce risks by adding feebased managed and franchised rooms to our portfolio. We added more than 3,100 new rooms to operation in the first half of the year, 87% of which were fee-based. In addition, we added close to 5,000 new rooms to our pipeline, that currently features over 23,000 rooms, of which 90% are feebased”.

The full interim report is available on www.investor.rezidor.com

This press release comprises information which Rezidor Hotel Group AB (publ) is required to disclose under the Securities Markets Act and/or the Financial Instruments Trading Act. It was released for publication at 08h30 CET on 22 July 2009.

About the Rezidor Hotel Group:
The Rezidor Hotel Group is one of the fastest growing hotel companies in the world. The group features a portfolio of close to 380 hotels in operation and under development with ca 80,000 rooms in 59 countries.

Rezidor operates the brands Radisson Blu Hotels & Resorts, Regent Hotels & Resorts, Park Inn and Country Inns & Suites in Europe, the Middle East and Africa, along with the goldpoints plusSM loyalty programme for frequent hotel guests. Rezidor has signed a worldwide license agreement with the Italian fashion house Missoni, in order to develop and operate a lifestyle hotel brand of the same name: Hotel Missoni.

In November 2006, Rezidor was listed on the Stockholm Stock Exchange. Carlson Companies is the main shareholder.

The Corporate Office of The Rezidor Hotel Group is based in Brussels, Belgium.

For more information on Rezidor, visit www.rezidor.com.

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Contact:

The Rezidor Hotel Group
Mr. Knut Kleiven, Deputy President and Chief Financial Officer
Tel. +32 2 702 92 44
Knut.Kleiven@Rezidor.com

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Also See: Rezidor Hotel Group Develops Career Development Programme for Supervisors; In 2008 Rezido Appointed 100 General Managers of Which 23 Were Promoted from the Mentor-Mentee Programme / April 2009
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