2020 Half Year Results Navigating the Storm & Positioning for Growth
PRESENTING TEAM Pat McCann Dermot Crowley Chief Executive Officer Deputy Chief Executive 2 | Dalata HY 2020 Results
CONTENTS Overview 4 Phased Approach To Covid-19 Challenge 5-8 Growth Strategy 9-16 HY 2020 Financial Review 17-23 24-25 Summary Appendices 26-33 DISCLAIMER The presentation contains forward-looking statements. These statements have been made by the Directors in good faith based on the information available to them up to the time of their approval of this presentation. Due to inherent uncertainties, including both economic and business risk factors underlying such forward- looking information, actual results may differ materially from those expressed or implied by these forward- looking statements. The Directors undertake no obligation to update any forward-looking statements contained in this presentation, whether as a result of new information, future events or otherwise. 3 | Dalata HY 2020 Results
OVERVIEW Navigating the Storm Revenue of € 80.8m Successful sale & leaseback of Clayton Hotel Charlemont delivering € 65m in liquidity Adjusted EBITDA of € 10.1m H1 2020 Cash/available facilities increased by € 13m from € 162m Loss Before Tax of € 70.9m in Dec 19 to € 175m in June 20 Adj. EPS (13.1) cents Launch of accredited Dalata Keep Safe Programme 100% of hotels re-opened Very positive supports announced by Irish and UK governments Occupancy starts recovery phase – 30% in July and projecting 40% for August Projecting Adjusted EBITDA for the two month period to be in the range of € 7.0m to July / August Update € 7.5m Debt facilities amended in July provide additional flexibility beyond our strong cash balance, providing total cash of € 110m and undrawn facilities of € 111m at the end of August Positioning for Growth Well placed for recovery with young, well invested portfolio, experienced Senior Executive team and strong balance sheet Growth Strategy Growth opportunity remains compelling Remains Compelling Announcing two new leased hotel deals in Brighton & Manchester Experienced at identifying opportunities in a crisis 4 | Dalata HY 2020 Results
Clayton Hotel Charlemont, Dublin PHASED APPROACH TO COVID-19 CHALLENGE Slide | Slide | 5
PHASED APPROACH TO COVID-19 CHALLENGE Phase 1 Phase 3 Protect our people, Re-opening the business cash and business July 2020 March 2020 Phase 2 Phase 4 Using our time wisely & Drive long-term value increasing liquidity April - June 2020 6 | Dalata HY 2020 Results
PHASE 3 | RE-OPENING THE BUSINESS Our key priorities Identify opportunities Getting back Protect cash and maintain emerging from the crisis to business strong liquidity Phase 3 • All 44 hotels open • Reducing cash outflow • Constructions sites have re- opened July Anticipating low levels of Utilise all available government • • onwards international travel. Focusing on supports to protect cashflow Assessing distressed • domestic markets and value and people opportunities as they arise pricing Re-opening Focused on aligning costs with • with social Domestic demand is encouraging low occupancies • distancing – Group occupancy of 30% in July and projecting 40% for • Maintaining strong financial August Current position with cash of €110m and undrawn debt facilities of phase Dalata Keep Safe Programme €111m at end of August • well received by guests • Leverage benefits of highly skilled team & decentralised model 7 | Dalata HY 2020 Results
PHASE 4 | DRIVE LONG-TERM VALUE Our key priorities Identify opportunities Getting back Protect cash and maintain emerging from the crisis to business strong liquidity Phase 4 • Remain flexible and adapt to • Maintain asset backed balance • Likely to be distressed assets as changing situations sheet with low gearing a result of Covid-19 crisis The New • Capitalise on the advantages of • Continue to target strict • Pipeline of London opportunities Normal well invested modern portfolio minimum rental cover for new emerging (average hotel age of 16 years) leases (1.85x in year three) Regional UK structural growth • No visibility yet Leverage investment in new Reviewing acceptable levels of opportunity remains compelling • • on when this technologies and enhanced leverage phase starts. processes and procedures • Strong track record of securing opportunities that add value Virus is under Continue to challenge all costs • control through effective management or • Focus on sustainability medical advances. 8 | Dalata HY 2020 Results
Maldron Hotel Victoria, Manchester GROWTH STRATEGY Slide | Slide | 12 Slide | 9
PROVEN TRACK RECORD OF GROWTH 5 year Adjusted EBITDA 1 5 year Adjusted Basic EPS 1 5 year Hotel EBITDAR margin 1 Pre IFRS 16 1 Pre IFRS 16 135 120 46 105 43 39.6% 41.4% 42.4% 42.6% 42.6% 38 (€million) 85 (cents) 27 63 20 5 year rooms by region 5 year Free Cash Flow 1 5 year growth in portfolio value 8.9 100.6 8.5 1,471 Room Numbers 2 (‘000) 7.4 86.6 7.1 1,176 71.7 999 (€million) 5.5 (€million) 59.3 822 48.5 609 Dublin Regional Ireland UK 1 Refer to glossary on slide 32 10 | Dalata HY 2020 Results 2 Includes owned & leased rooms
GROWTH STRATEGY Growth strategy in three key markets remains compelling 1 Excellent reputation has been established amongst property developers and agents Two projects secured to date - Clayton Hotel City of London (opened Jan 2019) and London Maldron Hotel Shoreditch Financial, developmental and operational expertise to expand further in the city 2 Prime locations in larger cities with strong mix of corporate and leisure guests Quality assets through new and recently refurbished hotels which can outperform older/tired competition Regional UK Operational expertise delivered through decentralised model Track record of securing opportunities in these cities 3 Ownership and operating model provides a strong competitive advantage Maldron and Clayton are leading brands in the market with a winning customer proposition Dublin Growth continues through existing pipeline, optimisation of existing hotels and opportunistic acquisitions Strong balance sheet provides competitive advantage 11 | Dalata HY 2020 Results
KEY MARKETS POISED FOR STRONG RECOVERY IN PHASE 4 Strong recovery opportunity within existing portfolio footprint, which is located in key cities with strong underlying demand drivers Irish economy and Dublin market is underpinned by strong FDI from industries less impacted or positively affected by Covid-19 including pharma, medical devices, TMT sector and financial services (possible ongoing Brexit relocation drivers) Pent-up tourist demand is likely to emerge for key destination cities, including Dublin & London over the medium-term Rescheduling of postponed events, including sporting tournaments, concerts, weddings, trade conventions/conferences, and other events likely to aid recovery of demand Dislocation from Covid-19 has the potential to result in rationalisation of Regional UK hotel market due to the profile of the hotel owners and the age of room stock International tourism has proven its resilience to various demand shocks over the long-term 12 | Dalata HY 2020 Results
TOURISM INDUSTRY RESILIENT IN PAST CRISES International Tourism – History of Surviving Crises Source: UNWTO $bn 1.6 1,400 Global 9 11 1.4 Financial Terrorist 1,200 Crisis 1.2 Attacks 1,000 1.0 European 800 0.8 Sovereign 600 0.6 Debt Crisis 400 0.4 200 0.2 0 0.0 International tourism receipts (billion - USD) - LHS International tourist arrivals (billion) - RHS Upward trend in Irish Tourism over 40 years Source: CSO €bn 5.5 12.0 5.0 10.0 4.5 4.0 8.0 3.5 3.0 6.0 2.5 Global 2.0 4.0 Financial 1.5 Crisis 1.0 2.0 0.5 0.0 0.0 Visitors to Ireland expenditure - excluding international fares (billion - EUR) - LHS Visitors to Ireland (million) - RHS 13 | Dalata HY 2020 Results
PIPELINE OF CLOSE TO 3,300 ROOMS New hotels projected to contribute over €50m in stabilised EBITDAR 1 when fully operational London - 149 bedrooms Construction sites have re-opened Opening date to be confirmed for Maldron Hotel Secured funding for all projects under construction Shoreditch New rooms 2,000 Regional UK – 2,506 bedrooms 2020: Extension at Clayton Hotel Birmingham 1,500 2021: 1 leased hotel (Maldron Glasgow) 2022: 4 leased hotels in Glasgow, Bristol and 1,000 Manchester (x2) Opening dates to be confirmed for 4 leased hotels located in Birmingham, Manchester Victoria, 500 Liverpool and Brighton Dublin – 635 bedrooms 0 2020 2021 2022 Opening 2020: Conference centre at Clayton Hotel Cardiff dates to be Lane confirmed 2021: 1 leased hotel (The Samuel) Opening date 2022: 1 owned hotel (Maldron Hotel Merrion Road) Under construction Planning granted Planning stage Opening dates to be confirmed for Maldron Hotel Croke Park and the extension at Clayton Hotel 1 Typically estimate stabilised EBITDAR in year three of normal operation Cardiff Lane 14 | Dalata HY 2020 Results
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