From Lockdown to Recovery to Opportunity May 2020
Contents Investment Highlights slide 3 Phased Approach to Covid 19 Challenge slide 5 Group Overview slide 8 Growth Strategy slide 14 slide 19 Appendices 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. 2 Slide |
Clayton Hotel, Cambridge Investment Highlights Slide | 3
Investment Highlights Strong Asset Backed Balance Sheet - € 1.4Bn of Prime Hotel Assets Strong Liquidity Position – 25 th March : ‘The Group has significant financial headroom with material cash resources of € 80m post disbursement of quarterly rent and interest scheduled to be paid over the next few days. In addition, Dalata can avail of further undrawn committed debt facilities of approximately € 65m. ’ 21 st April : ‘ The consideration of € 65 million is reflected in the contract by a purchase price of € 61.95 million and a rent-free period of one year, equating to € 3.05 million. The proceeds of the Transaction will be retained as cash in the Company. ’ Experienced Management Team Managed through Irish economic crash after Global Financial Crisis Proven track record of exploiting opportunities arising from crisis Decentralised management structure Identified Growth Strategy in UK & further opportunities likely to emerge from crisis Slide | 4
Clayton Hotel Charlemont Phased Approach to Covid 19 Slide | 5
Phased Approach to Covid 19 Challenge Phase 1- Initial Reaction Phase 2 - Lockdown • Sale & Leaseback of Clayton Charlemont • Rapid reduction of costs/ protection of cash • Maintain engagement with staff • Suspension of all non committed capital • Hotel management teams remain in situ, expenditure servicing any customers • Closure of hotels other than for essential • Cash conservation services customers • Detailed planning for hotel re-openings – • Understanding costs in a zero revenue model defining of new product – being innovative • Agreement with banking club • Communication with stakeholders • Communication with stakeholders • Assess strategic opportunities that may arise Phase 3 – Re-opening while social Phase 4 – The New Normal distancing • Either vaccine in use or effective virus • Gradual Re-opening of hotels treatments in place • Generation of cashflow • Impact on hotel supply ? • Social distancing requirements, low levels of • Impact on demand – recession, reduced international travel - negative impact on business travel ? revenues • Focus on sustainability • Focus on domestic markets • Acceptable levels of leverage? • Development sites back up and running • Sustainability of older competitor hotels • Assessing distressed opportunities as they arise • Air BnB? • Brexit? Slide | 6
Clayton Hotel Charlemont Creation of Significant Shareholder Value Feb 2016 Mar 2016 – Nov 2018 April 2020 Site purchased for €11.9m New 187 room hotel built Sold for €65m with 35 year located in the centre of for €29.7m lease – annual rent of the city (Total Dev Cost of €220k €3.05m per room) Projected Stabilised EBITDAR of €5.5m to €6.0m Creation of leased asset with projected EBITDA of €2.5m to €3.0m Development Profit of €23m Slide | 7
Clayton Hotel Manchester Airport Group Overview Slide | 8
Breakdown by Region – Dec 2019 Share of Owned & leased rooms at Share of Hotel revenue 31 December 2019 Segments EBITDAR €429.2 million 8,949 €182.8 million 21% 23% 29% 13% 50% 57% 20% 66% 21% Dublin Regional Ireland UK Split of Segments EBITDAR: Owned - €126.8 million (69%) Leased - €56.0 million (31%) Slide | 9
Entering the Crisis in A Strong Financial Position 31 December 31 December 2019 2019 31 December Strong balance sheet with an attractive All figures €million Post IFRS 16 Pre IFRS 16 2018 covenant to secure future leases. Non-current assets Almost € 1.4 billion of prime hotel Property, plant and 1,471.3 1,471.3 1,176.3 assets (post sale of Clayton Hotel equipment Charlemont) Right-of-use assets 386.4 - - Other non-current assets 1 62.0 90.2 82.4 • Valuation at yields of 8.5% to 10.75% for Dublin assets Current assets Trade and other receivables At year end, cash of € 40m and 23.7 29.3 24.5 and inventories unutilised facilities of € 121m Cash 40.6 40.6 35.9 Facilities mature in Oct 2024 with no Total assets 1,984.0 1,631.4 1,319.1 repayments Equity 1,072.8 1,080.4 902.6 Pre IFRS 16 Net Debt to Adjusted Loans and borrowings 411.7 411.7 301.9 EBITDA of 2.8x (post IFRS 16: 4.5x) Lease liabilities 362.1 - - Trade and other payables 66.2 67.7 65.2 Debt and Lease Service Cover of 3.2x Other liabilities 2 71.2 71.6 49.4 Total equity and liabilities 1,984.0 1,631.4 1,319.1 1. Other assets includes intangible assets, goodwill, deferred tax assets, investment property, contract fulfilment costs and other receivables 2. Other liabilities includes deferred tax liabilities, derivatives, provision for liabilities and current tax liabilities Slide | 10
Delivering resilience The Difference with Dalata Decentralised Our Experienced model people management teams Teams are empowered which Focus on employee Strong track record of enables local decision development and internal opening new hotels and making. Strongly placed to promotion leads to highly operating existing hotels exploit opportunities & engaged and motivated react to challenges people Exceptional hotel Comfortable Focused on continuous operators improvement gearing Proactive cost management Investment in Comfortable gearing with minimised profit impact of technology is delivering Debt and Lease Service fall in Irish RevPAR enhanced information. Cover of 3.2x at year end Enables informed decision making Slide | 11
Proven Ability to Grow out of a Crisis 5 year Adjusted EBITDA* 5 year Adjusted Basic EPS* 5 year Hotel EBITDAR margin * Pre IFRS 16 * 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 2,871 rooms in pipeline 5 year growth in portfolio value 8.9 11.8k rooms 8.5 1,471 9k rooms Room Numbers* (‘000) Room Numbers* (‘000) 7.4 7.1 4.8 1,176 2.6 999 (€million) 5.5 822 1.9 1.9 609 5.1 4.5 2019 2023 Including current Current rooms pipeline Dublin Regional Ireland UK * Includes owned & leased rooms Slide | 12
History of Converting Growing Revenues into Cashflow €100.6m €86.6m €71.7m €59.3m €48.5m 2015 2016 2017 2018 2019 Modern well invested portfolio with highly motivated and developed teams delivering strong cash flows on the back of strong margins Strong track record of re-investing cash to deliver further returns Cash used to fund progressive dividend policy and expansion of portfolio while staying within comfortable gearing levels Slide | 13
Maldron Hotel Parnell Square, Dublin Growth Strategy Slide | 14
Pipeline of almost 3,000 rooms and growing Dublin UK 3 new hotels (2 leased, 1 owned) 8 new hotels (7 leased, 1 owned) 1 extension to existing hotel 1 extension to existing hotel 632 rooms 2,239 rooms Planning Owned Construction Estimated Property New Extension Rooms Granted or leased started Completion The Samuel* x Leased 204 x x TBC Maldron Hotel Merrion Road x Owned 140 x x TBC Clayton Hotel Cardiff Lane: Dublin - New conference centre x x x Q4 2020 Owned 88 - Additional rooms** x x TBC - Maldron Hotel Croke Park* x Leased 200 TBC Clayton Hotel Birmingham x Leased 44 x x Q4 2020 Maldron Hotel Glasgow* x Leased 300 x x TBC Clayton Hotel Glasgow* x Leased 303 x x TBC Clayton Hotel Manchester* x Leased 329 x x TBC UK Clayton Hotel Bristol* x Leased 255 x x TBC Maldron Hotel Manchester* x Leased 278 x x TBC Maldron Hotel Shoreditch London x Owned 145 x TBC Maldron Hotel Birmingham* x Leased 325 x TBC Maldron Hotel Liverpool* x Leased 260 x TBC Total 2,871 *35 year operating lease ** Contingent on obtaining vacant possession Slide | 15
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