ASSET-LIGHT GROWTH IN EMERGING MARKETS

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1 ASSET-LIGHT GROWTH IN EMERGING MARKETS KURT RITTER PRESIDENT & CEO Capital Market Day 3 June 2010, London

2 REZIDOR UPDATE RADISSON ROYAL HOTEL, MOSCOW

3 A HISTORY OF UNPARALLELED ORGANIC GROWTH 400+ Hotels and 84,000 rooms in operation and under development 406 AFRICA IPO 28 YTD JUNE 2010

4 THE WORLD OF REZIDOR 400+ hotels in operation in pipeline 84,000+ rooms - 64,000 in operation - 20,000+ in pipeline 62 countries CARLSON + REZIDOR 78 COUNTRIES 1,100 HOTELS 161,000 ROOMS 29 YTD JUNE 2010

5 PORTFOLIO SNAPSHOT 300 HOTELS 64,000 ROOMS IN OPERATION 100+ HOTELS 20,000+ ROOMS IN PIPELINE 30 YTD JUNE 2010

6 KEY STRATEGIES DEVELOPMENT KEEP THE PACE Continue Asset-light Growth With Focus On Emerging Markets and Conversions One Of The Fastest Growing, Most Dynamic Hotel Companies In EMEA BRANDS QUALITY, PROFITABLE GROWTH GLOBAL ALIGNMENT Grow Pure, New Breed, Profitable Hotels REVENUE LEAVE NO STONES UNTURNED Grasp Every New Business Opportunity Z-FACTOR FULL THROTTLE Innovation Work Smarter! 31

7 BRAND POSITIONING CORE COMPETENCE Brand Management Luxury First class Mid-market Holiday Inn Novotel Scandic Morgan W Ritz Carlton Bvlgari InterContinental Hilton Marriott Sheraton Sofitel Four Seasons Our luxury brand Our lifestyle brand Our up-market core brand Our mid-market growth brand Culture of Service Economy Formule 1 Ibis Our up the sleeve brand Budget Increased level of service 32 SOURCE: HVS INTERNATIONAL

8 STRATEGIC MOVES Sale of Regent Park Inn becomes Park Inn by Radisson Park Inn clustering Adding hotel portfolio in the Baltics Cooperation with Carlson on 2015 Ambition Global alignment South Africa Joint Venture with Mvelphanda and Afrinord Asset-Light Pipeline no leases in pipeline after 2011 Concentrate on emerging markets RADISSON BLU RESORT & SPA, DUBROVNIK SUNGARDENS 33

9 OTHER ACHIEVEMENTS 2009 Record breaking year of new openings 4,000+ rooms opened YTD 2010 First Hotel Missoni opening in Edinburgh 4 more in pipeline Leading hotel operator in Russia and CIS Largest Airport hotel operator in Europe Leading hotel chain in the Nordics for Business Traveller (BDRC) Winners of Movers & Shakers award in Africa Strong resort portfolio 90+ Rezidor branded bars and restaurants Highest Employee Satisfaction scores in history of the company World s Most Ethical Hotel Company award by Ethisphere Best Corporate Governance on HVS Board Masters Ranking for Europe 34

10 REZIDOR VS. THE CRISIS A well Prepared and Dynamic Response to the Downturn Rezidor LFL RevPAR Development Rezidor s Response Q1/Q % Q3.08 0% H4T MEUR 20 Q4.08-5% H4T MEUR 30 Q % H4T MEUR 5 (Central Costs) 35

11 RADISSON Largest Upscale Brand In Europe NUMBER OF HOTELS NUMBER OF ROOMS 36 SOURCE: MKG/HTR EUROPEAN RANKING MARCH 2010

12 LARGEST UPSCALE & MID-SCALE PIPELINE IN Europe 5,399 3,601 6,047 4,075 2,906 3,839 1,942 3,014 1,248 2,863 1,103 2, , SOURCE: STR GLOBAL COMPREHENSIVE PIPELINE OUTLOOK (EUROPE) MARCH 2010

13 Fastest Growing Mid-scale Hotel Brand in Europe Highest Ranked on J.D. Powers in European Guest Satisfaction Index 38

14 WHY EMERGING MARKETS? Under supply of hotels Russia/CIS: Lack of unbranded hotels in large cities Africa: Outdated hotel inventory and up & coming new destinations Stronger GDP growth vs mature markets Increase in travel and tourism More air traffic Mature Europe most important feeder market Right contract type High maintenance RADISSON BLU HOTEL, PORT ELIZABETH, S. AFRICA 39

15 OUR BACKGROUND IN EMERGING MARKETS 1980 SAS Hotel Kuwait, first hotel outside Scandinavia 1994 Master agreement with Carlson, takeover of hotels in Riga, Budapest, Russia and Poland 1999 Radisson Waterfront Cape Town, first hotel in Africa 2001 Radisson Resort Sharm el Sheikh, Egypt, first North Africa resort 2002 Radisson Slavjanskaya, Moscow 2004 Development office in Russia 2005 Afrinord established 2006 IPO on Stockholm Stock Exchange Development office in Cape Town Park Inn Pribaltiyskaya & Pulkovskaya in St. Petersburg (2000+ rooms) 2009 Strategic development agreement with RHC in Russia to develop Park Inn Joint Venture in South Africa 2010 Opening of Radisson Royal Moscow, landmark project 40

16 TOP PRIORITIES FOR 2010 Profitable fee based growth Emerging markets and strategic locations Un-committed contracts Conversions & takeovers Portfolio management Cash protection Maintain fixed cost level Capturing revenue Top-line concentration Z-factor PARK INN KRAKOW 41

17 REZIDOR AN EXCITING INVESTMENT CASE Attractive Industry Leaders in key and emerging markets Global brands Asset light and flexible business model Substantial contracted development pipeline Attractive partner to hotel owners & developers Significant benefits from partnership with Carlson Strong Portfolio Growth Pipeline 20,000+ rooms + Significant margin expansion = Continued fast profitable growth 42

18 Q&A