COVIVIO HOTELS DEBT INVESTOR PRESENTATION SEPTEMBRE 2018
CONTENTS 1. COVIVIO HOTELS: A EUROPEAN LEADER 03 2. A WELL-ORIENTED HOTEL MARKET 13 3. ILLUSTRATIVE CASE STUDIES 19 4. A STRONG OPERATIONAL & FINANCIAL PROFILE 25 5. CREDIT HIGHLIGHTS 34 APPENDIX 37 2
1. COVIVIO HOTELS: A EUROPEAN LEADER
A STABLE AND EXPERIENCED MANAGEMENT TEAM SPEAKERS INTRODUCTION Tugdual Millet (41) Dominique Ozanne (40) Gaël Le Lay (45) CFO Covivio CEO of Covivio Hotels and Deputy CEO of Covivio Deputy CEO 16 years at Covivio, of which 9 years as CFO 13 years in Hotel investments through Covivio Hotels 18 years in Hotel investments Of which 5 years in Covivio Hotels > Dominique began his career at Covivo (ex. Foncière des > Gaël worked 11 years at Accor, holding various positions > Tugdual has always been working at Covivio, Régions) in 2003 as Head of projects to the Chairman > He then headed the Hotel investment division of working successively as Portoflio Manager, Head > He has been involved in the set up of Covivio Hôtels (ex. of Corporate Development & Financing and Axa Real Estate, for 7 years Foncière des Murs) in 2005 as Chief Operating Officer Financial Director of the Office business > Since 2011, he has been CEO of Covivio Hotels > In 2009 Tugdual was appointed CFO of Covivio > In 2018, Dominique was appointed Deputy CEO of Covivio 4
A SOLID AND LONGSTANDING SHAREHOLDING STRUCTURE Strong links with Covivio Hotels Covivo Hotels is the #1 Pan European Hotel REIT € 3.1 billion market capitalization 1 Covivio involvement in Covivio Hotels: Founded Covivio Hotels in 2005 1. Covivio € 7.5 billion market capitalization 1 2. French SCA regime (limited partnership) with 42% Covivio as General & Managing partner ( “ associé 17% gérant ”) Crédit Agricole Delfin Assurances 28% 3. Providing and Property management support functions (financing, corporate, etc.) Free float 8% Free ACM 48% 4% 4. Dominique Ozanne is both CEO of Covivio Hotels float Covéa and Deputy CEO of Covivio Generali 9% 8% 11% 5% Cardif CDC 5% ACM Sogecap (BNP Paribas) Since 8% Since 2018 2018 8% One of the three strategic segments of Covivio Crédit Agricole Assurances Shareholders in both companies 22 % Italy Offices 23% German Residential Covivio Hotels owns all the assets it rents and € 15.3 bn operates Portfolio value 15 % Group Share 2 Hotels in All key shareholders have subscribed to the € 300 Europe 36 % million capital increase in June 2018 vs 5% at France Offices 5 % end-2010 Non-strategic 3 1 As of 30 August 2018. Including the contemplated merger with Beni Stabili 5 2 H1 2018 figures. Including the contemplated merger with Beni Stabili and the hotel acquisition in the UK; 3 Retail in France and Italy, Car parks, Residential France
THE EUROPEAN HOTEL REIT LEADER Westin - Berlin Grand Central - Glasgow Motel One - Paris 1 2 3 Focus on major Target the most profitable Client centric: be the preferred European cities hotels partner of main operators Mid to Upscale hotels Cities > 2 million overnight stays 18 partners across 31 brands, to choose the with EBITDAR margin >30% per year best operator for each hotel in each country 6
13 YEARS OF A SUCCESSFUL STRATEGY +13% OF GROSS ASSET VALUE PER YEAR ON AVERAGE Support operators with Acceleration of European development Sale and leaseback strategic evolutions Strengthen our hotel expertise H1 2018 2 2010 2015 Accor rent 2005 (% hotel annualised rent, Group Share) 42% 24% 100% 58% 2016 & 2017 # operator 6 operators 18 operators 1 operator 3 operators 2016 2012 % portfolio value 70% 33% 100% 93% Hotel portfolio value 1 € 1.1 bn € 1.8 bn € 2.4 bn € 5.9 bn 3 19 prime hotels in Germany France and Belgium Flagship deals € 988 million ( FDMM ) Accor 1: 158 B&B in France 123 assets € 513 million (sale and lease back) € 1 025 million 2017 14 hotels in the UK € 976 million 2014 17 hotels in Spain € 559 million 1 Portfolio value in 100% excluding retail 2 Including the UK hotel portfolio acquisition (in terms of assets and Accor weight) 7 3 € 5 189 m at H1 2018, plus the UK portfolio acquisition ( € 976 m) and excluding the retail portfolio ( € 259 m)
LEADING PLAYER IN EACH OF THE MAJOR EUROPEAN MARKETS Belgium & Netherlands Germany l € 0.5 Bn GAV A € 5.9 bn hotel portfolio at end-June 2018 1 l € 1.5 Bn GAV € 5.4 bn in Covivio Hotels Group share 1 United Kingdom l € 1.0 Bn GAV 388 hotels 46,777 rooms France l € 2.2 Bn GAV Critical size on each of our market And € 259 m of non-strategic retail assets of which € 79 million under disposal agreement Spain & Portugal l € 0.7 Bn GAV 8 1 Including the hotel acquisition in the UK
A WELL-DIVERSIFIED EUROPEAN FOOTPRINT FOCUS ON MAJOR CITIES 80% major European cities (cities with more than 2 million overnight stays annually) Germany main cities UK major cities Germany Berlin, Dresde & Leipzig, Frankfurt, Munich, etc. London, Edinburgh, Glasgow, Oxford, etc. 28% UK 16% % in turnover 1 France 33% Spain ~80% in Barcelona & Madrid 13% Belgium & Netherlands Portugal Mainly Paris and major regional cities 9% 1% (Lyon, Marseille, etc.) Mainly Brussels & Amsterdam 1 Group Share, annualized rent and EBITDA (for operating properties). At end-June 2018 including the hotel acquisition in the UK at run-rate 9
AN OPTIMISED MIX BETWEEN TYPE OF REVENUES Covivio Hotels owns all the assets it rents or operates : Real Estate owner Revenue from operators 1 26% 53% 21 % Revenue based on Fixed lease Revenue based on Net Operating Income turnover 2 mostly trophy assets in core location (Berlin, Lille) mostly with Accor, based on a safeguarding rents, sheltering against taking full advantage of updwards trends . percentage of turnover ripping off volatility and against potential downward Full flexibility : ability to manage or to swiftly adjust the benefits of a world class trends. While indexing rents (CPI). and convert hotels into a fixed-lease contract if needed operator George Street - Edinburgh Mercure - Paris Park Inn - Berlin 10 1 Annualised H1 2018 figures, including the hotel acquisition in the UK at run rate 2 Includes the variable part of leases with guaranteed minimum rent
LONG TERM PARTNERSHIP WITH THE LEADING OPERATORS Long-term partnerships with the best operators in each countries throughout a diversified tenant base #1 #8 #x Ranking as European Operators In terms of rooms, 2017 (Hospitality On) Leader in France & historical partner Subsidiary of Jin Jiang (#5 global operator), One of the global leaders in midscale/upscale hotels #2 Accor 24% #3 Radisson 8% Leader in the UK on midscale/upscale segments Marriott 9% One of the global leaders in midscale/upscale hotels IHG % in turnover 1 18% NH 5% Hotusa 3% Barcelo 3% #9 B&B Other 15% 15% #3 In France One of the leaders in Spain & Germany and a growing player in the Netherlands One of the leader in France and Germany on economic segment 1 Group Share, annualized rent and EBITDA (for operating properties). At end-June 2018 including the hotel acquisition in the UK at run-rate 11
STRONG QUALITY OF THE PORTFOLIO Focus on major European Higher quality of hotels cities 1 80% 2 73% 2 % of assets in major % of upscale and midscale European cities 65% (mainly 4* and 5*) 54% 53% 58% 2015 2016 H1 2018 2015 2016 H1 2018 Target 100% by 2022 Target 75% by 2022 George street - Edinburgh 1 Cities with more than 2 million overnight stays per year 12 2 At H1 2018; Including the acquisition of the UK Hotel portfolio
2. A WELL-ORIENTED HOTEL MARKET
HOTELS IN EUROPE BENEFITING FROM ROBUST FUNDAMENTALS Investments in travel & tourism European travel & tourism industry is growing 1 2 3 are accelerating arrivals and spending € bn € bn € bn European Travel & Tourism capital investments European GDP from Travel & Tourism industry International arrivals & tourism spending 2 000 2000 at constant bn at constant bn at constant bn 350 900 International arrivals (m) +2.4% +2.9% 1 750 850 per year +2.4% +3.0% per year 1 800 +3.5% 300 800 1 500 per year per year +2.6% per year 750 per year 1 250 1 600 700 250 +3.5% +4.2% 1 000 650 per year 600 1 400 per year 200 750 550 500 500 1 200 1 50 450 250 400 1 000 0 1 00 201 2 201 3 201 4 201 5 201 6 201 7 201 8E 2028F 201 2 201 3 201 4 201 5 201 6 201 7 201 8E 2028F 201 2 201 3 201 4 201 5 201 6 201 7 201 8E 2028F Tourism spending International arrivals 201 8 2028F 201 8- 2028F 201 8- 2028F European GDP from International arrivals: +3.5% European Travel & Tourism investments: +2.9% Travel & Tourism industry Tourism spending: +2.4% +2.4% per year International tourist arrivals 2030 2015 2020 1.2 billion 1.4 billion 1.8 billion Sources: World Travel & Tourism council; Eurostat; STR 14
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