Annual General Meeting May 3 rd 2018 2017 FULL YEAR RESULTS DELIVERING OUR PROMISE
Key Value Drivers By focusing on our customers, our people, our brands and our growth strategy: We continue to outperform the market. RevPAR growth very strong in Dublin, Regional Ireland and UK during 2017 We are delivering strong conversion with Segments EBITDAR margin increasing from 41.4% to 42.9% We are going to open a very strong pipeline of 980 additional rooms in Ireland and the UK during 2018 We have secured a further pipeline of 1,100 rooms in the UK, opening from 2019 to 2021 We continue to maintain a very healthy balance sheet to fund this growth Low level of gearing with Net Debt to Adjusted EBITDA of 2.4x Well located hotel assets with market value of close to 1 billion Slide 2
Driving Sustained Strong Performance RevPAR Revenue m Adjusted EBITDA 1 m Adjusted Diluted EPS 2 Cents ( ) 100 +10% 400 350 +20% 110 +23% 40.00 37.50 +43% 90 80 300 250 90 70 35.00 32.50 30.00 200 50 27.50 70 150 30 25.00 22.50 60 100 10 20.00 2016 2017 1. Excludes revaluation movements, goodwill impairment and items considered by management to be non-recurring or unusual in nature. Acquisition costs have been excluded given the scale of acquisitions in 2016 2. Excludes the tax adjusted effects of revaluation movements, goodwill impairment and items considered by management to be non-recurring or unusual in nature Slide 3
Three Core Business Segments Dublin 15 Hotels 3,992 Rooms FY 2017 RevPAR: 99.00 1 (+11.0%) RevPAR including Clayton Hotel Group Revenue Segment EBITDA EBITDAR Margin Burlington Road: 101.21(+9.2%) 58% 61% 49% Regional Ireland 12 Hotels 1,643 Rooms FY 2017 RevPAR: 69.45 (+9.1%) 22% 17% 28% UK 2 8 Hotels 1,731 Rooms FY 2017 RevPAR: 66.64 (+9.6%) 20% 20% 39% 1. Clayton Hotel Burlington Road is excluded because its performance in the transitional period since its November 2016 acquisition has a disproportionate impact as a result of its size 2. EBITDAR margin excludes Croydon Park Hotel Slide 4
Very strong RevPAR performance in all markets but especially in Dublin and the UK 18.4% Dalata Market 16.8% 13.6% 13.2% 11.0% * 11.9% 12.0% 11.4% 7.7% 8.7% 7.6% 6.6% 6.7% 8.1% 8.0% 4.4% 4.6% 2.3% 0.9% Dublin Cork Galway Limerick London Belfast Leeds Manchester Birmingham Cardiff -0.7% Source: Market data STR; Trending.ie * Clayton Hotel Burlington Road is excluded from the like for like analysis because its performance in the transitional period since its November 2016 acquisition has a disproportionate impact as a result of its size. If Clayton Hotel Burlington Road was included, RevPAR increase for Dublin would be 9.2% Slide 5
Current Pipeline Over 2,200 new rooms Dublin 3 New Hotels 3 Extensions 656 rooms Regional Ireland 1 New Hotel 1 Extension 227 Rooms Property New Extension Rooms Planning Construction Completion Granted Started Clayton Hotel Charlemont x 188 x x Nov 2018 Maldron Hotel Kevin Street x 138 x x June 2018 Clayton Hotel Ballsbridge x 31 x x Aug 2018 Clayton Hotel Dublin Airport x 106 x x May 2018 Maldron Hotel Parnell Square x 53 x x Dec 2018 Maldron Hotel Merrion Road (to replace Tara Towers Hotel) x 140 x Q3 2020 Property New Extension Rooms Planning Construction Completion Granted Started Maldron Hotel South Mall, Cork x 164 x x Dec 2018 Maldron Hotel Sandy Road, Galway x 63 x x June 2018 UK 1 New Owned Hotel 4 New Leased Hotels 1,351 Rooms Property New Extension Rooms Planning Construction Completion Granted Maldron Hotel Belfast City x 237 x x Started Open 13th March 2018 Maldron Hotel, Newcastle* x 264 x x Feb 2019 Maldron Hotel, Glasgow* x 250 Q2 2020 Clayton Hotel, Glasgow* x 300 Q4 2020 Clayton Hotel, Manchester* x 300 Q1 2021 *35 year operating lease Slide 6
UK Fragmented Market offering Structural Opportunity We have identified 20 target cities in the UK which are suitable for Maldron and Clayton Large structural opportunity exists in the 3 & 4 star segments of these markets for a number of reasons: International brands are increasingly evolving to a franchise model leaving a shortage of operators with any scale Fragmented market in terms of: Brands Ownership Operators The stock of 3 and 4 star hotels is considerably older than the age profile of the Budget sector with over 40% of the rooms over 40 years old Slide 7
UK Key Objectives in Target UK 20 cities Our objective is to become the leading 3/4 star operator in our target city markets Target range of 10% to 15% market share of 3/4 star market in each city Translates to circa 7,000 rooms on top of current pipeline (assuming a 12.5% market share achieved) in 5 7 years Further opportunities are likely to exist in the Greater London area and adjacent to UK airports but we will look to address those opportunities in a more bespoke manner as and when they arise Slide 8
Strategic Priorities Difference with Dalata OUR CUSTOMERS Listening to their feedback Our People (decentralise responsibility) DRIVING SHAREHOLDER RETURNS OUR PEOPLE Decentralise responsibility Our customers (listening to their feedback) OUR BRANDS Independent & fresh OUR GROWTH Owned & Leased model Slide 9
Our Customers We want to know what our customers think Received and processed over 120,000 customer reviews Commissioned market research, getting views of 1,000 consumers on our brands, websites and products We react to feedback Over 14.6 million invested in product refurbishment during 2017 Over 2,200 rooms refurbished since 2015 Brand websites redesigned to make booking journey easier Launch of Click on Clayton and Make it Maldron Training courses developed to address service weaknesses Technology introduced to aid us better serve our customer Slide 10
Our Growth Further progress achieved in 2017 Owned and leased portfolio Purchased effective freehold interest of Maldron 9,000 38 Hotel Portlaoise and 232 rooms at Clayton Hotel Cardiff Lane (both previously leased) 8,000 34 35 Purchased 257 rooms in three separate transactions at Clayton Hotel Liffey Valley 7,000 6,000 27 Secured lease to operate now rebranded Clayton Hotel Birmingham (174 rooms) 5,000 4,000 15 Entered into agreements for lease for 3 new hotels (850 rooms) in Glasgow and Manchester Identified 20 target cities in the UK for Clayton and Maldron Targeting to announce 1,200 new rooms per annum 3,000 2,000 1,000 0 12 2013 2014 2015 2016 2017 2018 Estimate Room numbers Number of hotels Slide 11
Our People LYNN, current GM at Maldron Dublin Airport appointed GM DARA, current Deputy GM at Clayton Dublin Airport replaces Lynn Clayton Hotel Charlemont, Dublin Maldron Hotel Kevin Street, Dublin ANN MARIE, previous GM at Maldron Smithfield appointed GM PATRICK, previous Deputy GM at Maldron Parnell Square replaced Ann Marie Maldron Hotel South Mall, Cork Difference with Dalata Maldron Hotel Belfast City ROBERT, current GM at Maldron Shandon Cork City appointed GM TRACY, current Deputy GM at Clayton Silver Springs replaces Robert MIKE, previous GM at Maldron Derry appointed GM LINDA, previous Deputy GM at Clayton Leopardstown replaced Mike Slide 12
Our Brands We own all our brands and are the sole operators to ensure consistency and control of standards Clayton and Maldron are Ireland s two largest hotel brands with a growing presence in the larger cities in the UK Club Vitae is the largest leisure centre brand in Ireland Red Bean Roastery Coffee brand has been rolled out to 16 hotels across the portfolio with another 18 hotels planned for 2018 The first standalone Red Bean Roastery coffee shop was opened adjacent to Clayton Hotel Leopardstown in 2017 with another three planned at Clayton Hotel Cardiff Lane, Clayton Hotel Charlemont and Maldron Hotel South Mall Grain & Grill restaurant brand has now been rolled out at all our Maldron hotels Slide 13
Investing in Technology to deliver on our strategy Background Dalata comprises primarily a portfolio of hotels acquired in multiple separate transactions since mid 2014 There were multiple different systems platforms at the various hotels Alkimii human resources management system rolled out across the group in 2016 Objectives of project are to (i) streamline and consolidate processes, (ii) increase controls, (iii) deliver efficiencies and (iv) improve further management reporting Project Evolve 2017/2018 There are three key components: A single accounting platform Sage 200 was introduced across all units in July 2017 Procure Wizard, a new procurement system currently being implemented Shared Service Centre has been established in Cork to manage routine administration work in a highly efficient manner supported by the new technology Property Management Systems & Revenue Management Roll out of Opera Cloud PMS to non Opera PMS Hotels by end of Q1 2018, Opera Cloud to replace Opera at other hotels within the next 3 years Web based group database housed in Oracle s data centre Real time rates and inventory integration to all main distribution channels Implementation of IDEAS Revenue Management System to aid the Revenue manager in decision making by providing powerful analytics in selected hotels Slide 14
Thank You!