Q2-2013 Results Wolfgang M. Neumann, President & CEO Knut - PowerPoint PPT Presentation

Q2-2013 Results Wolfgang M. Neumann, President & CEO Knut Kleiven, Deputy President & CFO July 17, Brussels Radisson Blu Hotel, Istanbul Pera /

The macro-economic climate in Europe remains fragile and emerging economies are driving growth Current Projections (%) Market RevPAR Performance Growth of GDP, constant prices (Source: World Bank) 2013 May YTD 2013 Europe 0.0 Germany 0.6 EUROPE : +0.7% France -0.1 United Kingdom 0.7 Percent change from May YTD 2012 12% Sweden 1.0 10% 8% Norway 2.5 6% Central & Eastern Europe 2.2 3,3% 4% Russia 3.4 2% 0,7% Turkey 3.4 -0,5% 0,2% 0,1% 0% Sub-Saharan Africa 5.6 Europe Eastern Northern Southern Western -2% Europe Europe Europe Europe South Africa 2.8 Nigeria 7.2 MIDDLE EAST/AFRICA : +8.3% Middle East & North Africa 3.1 Saudi Arabia 4.4 Percent change from May YTD 2012 United Arab Emirates 3.1 12% 9,7% 10% 8,3% 8% 5,4% • Modest, positive expectations for GDP growth in Scandinavia; 6% emerging economies continue to be growth drivers; 4% challenging outlook for Euro zone 2% -0,8% 0% • RevPAR growth profile reflects similar pattern with the Middle Middle Middle East Northern Africa Southern Africa -2% East/Africa East & North Africa being the key drivers 2 / Q2-2013 Results Source: STR Global

Q2 2013: Rising RevPAR, Rising Margins 68.7 • 6.0% L/L RevPAR growth, driven by occupancy rise RevPAR +6.0% (L/L) • 8.8% L/L RevPAR growth in Nordics, boosted by Easter effect 14% EBITDA • 16.6% fee revenue increase, with Middle East and Africa Margin leading the recovery +4.5pp • Strict cost control and the 2012 terminations of unprofitable leases led to solid conversion of revenue to EBITDA €35m EBITDA +€12m • 54% Q2 EBITDA improvement, and 81% in H1 • 124% EBIT improvement €26m EBIT • 9 MEUR Free Cash Flow improvement in H1 +€15m 3 / Q2-2013 Results

Performance growing steadily since 2009 and nearing 2008 peak; accelerating due to Route 2015 initiatives H1 Historical Performance 40 35 30 • H1 typically the weaker half of the year, 25 due to Easter effect and slow months of 20 January and February 15 MEUR 10 • Portfolio in 2008 included 50,100 rooms 5 in operation, compared to 74,600 today 0 2013 2012 2011 2010 2009 2008 • After 5 years, there is still a 5.2 MEUR -5 EBITDA and 8.0 MEUR EBIT gap, -10 reflecting the slow pace of the recovery -15 -20 -25 EBITDA Peak EBITDA: 37.3 MEUR Peak EBIT: 24.2 MEUR EBIT 4 / Q2-2013 Results

More resilience due to shift in business model and launch of Route 2015 REVPAR (EUR) EBITDA (MEUR) 100 100 87 77 74 73 80 80 72 71 71 69 67 67 63 62 61 61 59 58 60 60 52 51 44 35 33 40 32 40 24 18 20 20 5 0 0 -12 -20 -20 • Gradually becoming more resilient due to shift in business model • RevPAR 15% below the 2007 peak (20% adjusted for inflation) • EUR 1 change in RevPAR = MEUR 6-8 change in EBITDA (ca 85% from leases) 5 / Q2-2013 Results

6 consecutive quarters of occupancy-driven RevPAR growth and increased market penetration (RGI) L/L Occupancy L/L Average Room Rate L/L RevPAR 10% 8% 6.5% 5.7% 5.9% 6.0% 5.6% 6% 4.6% 4.2% 4% 3.2% 3.0% 2.3% 2% 0% -2% 6 / Q2-2013 Results

Middle East and Africa continue to surge; Nordics up substantially due to Easter effect NORDICS REST OF WESTERN EUROPE L/L Occupancy L/L Average Room Rate L/L RevPAR L/L Occupancy L/L Average Room Rate L/L RevPAR 20% 20% 15% 15% 10.7% 8.6% 8.8% 10.0% 10% 10% 3.4% 4.2% 4.4% 3.6% 2.2% 1.2% 0.7% 5% 3.1% 2.4% 5% 1.8% 0.8% 1.7% 2.0% 1.5% -1.2% 0% 0% 2.3% -5% -5% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2011 2012 2013 2011 2012 2013 EASTERN EUROPE MIDDLE EAST & AFRICA L/L Occupancy L/L Average Room Rate L/L RevPAR L/L Occupancy L/L Average Room Rate L/L RevPAR 19.1% 30% 20% 17.3% 20.5% 15.3% 20% 17.1% 13.0% 13.5% 11.5% 15% 12.2%11.9% 10.8% -4.2% 10% -6.1% 10% 6.1% 5.7% 0% 4.0% 7.9% 1.2% 5% -10% -12.8% 0% -20% -27.8% -30% -5% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2011 2012 2013 2011 2012 2013 7 / Q2-2013 Results

Revenue generating initiatives and synergies with Carlson have powered substantial growth in market penetration (RGI) 2012 2013 YTD May *omparable Managed & Leased Hotels with 3 rd Party RGI data 8 / Q2-2013 Results

Hotel signings in line with 2012, with continued focus on fee-based growth in Emerging Markets Q2 Q2 H1 H1 Park Inn by Radisson Abuja Kaura, Nigeria SIGNINGS 2013 2012 2013 2012 Hotels 11 11 16 17 Rooms 1,800 2,500 2,900 3,900 Q2 2013 >75% 100% >65% Emerging Fee-based Park Inn Markets Park Inn by Radisson Kigali, Rwanda Q2 Highlights: • Park Inn expansion in Sub-Saharan Africa (Kigali, Abuja) and Middle East (Oman, Bahrain) • 3 projects to open within 12 months • Extension of the profitable Radisson Blu Aarhus, Denmark lease 9 / Q2-2013 Results

Hotel openings reflect a mix of Mature and Emerging Markets, with emphasis on conversions Q2 Q2 H1 H1 Radisson Blu Hotel, Bremen OPENINGS 2013 2012 2013 2012 Hotels 3 5 8 9 Rooms 770 1,300 1,700 2,200 Q2 2013 90% 50% 88% Fee-based Mature Radisson Contracts Markets Blu Park Inn by Radisson Glasgow City Center Q2 Highlights: • Conversions: Park Inn Glasgow City Centre (former office building), Radisson Blu Hotel Bremen • Opening of our 4 th hotel in Istanbul and 7 th in Turkey (Radisson Blu Hotel Istanbul Pera) • 90% fee based (some additional rooms added to existing leased hotel) 10 / Q2-2013 Results

Our focus on Emerging Markets and Asset Light growth go hand in hand Contract Type Brand Region 11% 1% • Lease driven growth in 22% Pre-2003 34% 16% Nordics 43% • Single brand strategy • Focus on “home markets” 30% 44% 99% 8% 2003 - 2007 9% 27% 28% • Fast expansion in RoWE 18% 48% • Growing the Park Inn 52% brand 65% 45% 3% 9% 10% 25% 21% • Switch to Asset Light 2008+ 32% Strategy 29% • Focus on Emerging 65% Markets 69% 38% NOR RoWE EE MEAO Leased Managed Franchised Radisson Blu Park Inn Others 11 / Q2-2013 Results

Our efforts have resulted in a primarily fee-based portfolio with a greater presence in Emerging Markets In Operation Pipeline Total Rezidor Portfolio Q2 2013 Q2 2013 Q2 2013 – by 2015/16 4% 50 % 50% 16% 16% 19% 13% 22% 47% Emerging Mature Markets Markets 25% 34% 28% 38% 40% NOR RoWE EE MEAO NOR RoWE EE MEAO NOR RoWE EE MEAO 8% 18% 20% 22% 24% 92% 62% 54% Leased Managed Franchised Leased Managed Franchised Leased Managed Franchised 100 Hotels 400-440 Hotels 337 Hotels 75,000 rooms 20,000 rooms 90-95,000 rooms 12 / Q2-2013 Results

The combined Carlson-Rezidor presence gives us international exposure and critical mass 10 th Largest in the World 5 th Largest in Europe 2013 2013 RANK 2013 2013 RANK COMPANY COMPANY HOTELS ROOMS 2012 HOTELS ROOMS 1 INTERCONTINENTAL 4,602 676,000 1 ACCOR 2,396 258,000 2 HILTON 3,992 652,000 2 BEST WESTERN 1,312 90,600 3 MARRIOTT 3,672 639,000 3 INTERCONTINENTAL 574 89,200 4 WYNDHAM 7,342 627,000 4 GROUPE DU LOUVRE (*) 974 70,400 5 CHOICE 6,198 497,000 5 CARLSON REZIDOR (**) 255 51,800 6 ACCOR 3,515 450,000 6 NH HOTELES 347 50,800 7 STARWOOD 1,121 328,000 7 WHITBREAD 641 50,700 8 BEST WESTERN 4,024 312,000 8 HILTON 205 46,600 9 HOME INNS 1,772 214,000 9 MELIA 195 44,700 10 CARLSON REZIDOR 1,077 166,000 10 MARRIOTT 245 44,600 SOURCE I MKG Hospitality 2013 (*) Louvre Hotels Group + Concorde Hotels (**) Rezidor + Park Plaza + Radisson Edwardian 13 / Q2-2013 Results

Financial Update Knut Kleiven, Deputy President & CFO Radisson Blu Hotel, Istanbul Pera /

Strong revenue increase and solid conversion led to the best H1 performance since 2008 Q2 Q2 H1 H1 MEUR Q2 Highlights: 2013 2012 2013 2012 +10 MEUR in revenue : Revenue 248.9 238.9 456.0 445.8 • 16 MEUR in L/L revenue growth compensated for EBITDAR 97.0 82.3 155.6 140.7 negative FX impact (-1.6) and 9 lease terminations (-7.3) EBITDAR Margin % 39.0% 34.4% 34.1% 31.6% • 17% increase in fee revenue +15 MEUR in EBITDAR: EBITDA 34.9 22.7 32.1 17.7 • 10 MEUR higher revenue • -4 MEUR operating expenses EBITDA Margin % 14.0% 9.5% 7.0% 4.0% +12 MEUR in EBITDA: • Reduced rent payments from 9 EBIT 26.2 11.7 16.2 -0.8 lease terminations +15 MEUR EBIT EBIT Margin % 10.5% 4.9% 3.6% -0.2% • 3 MEUR reduction in write- Financial Net -0.9 0.2 -1.1 0.0 downs Tax -7.9 -5.7 -8.9 -7.1 • High tax rate due to losses which are difficult to utilize NET RESULTS 17.4 6.2 6.2 -7.9 15 / Q2-2013 Results