Pphe hotel group limited

PPHE Hotel Group Company Profile and 2014 Results March 2015

IMPORTANT NOTICE By attending the meeting where this presentation is made, or by reading this document, you agree to be bound by the limitations set out below. This presentation does not constitute an offer or invitation for the sale or purchase of any securities of PPHE Hotel Group Limited (PPHE) or any of the businesses or assets described in it. The information in this presentation, which does not purport to be comprehensive, has been provided by PPHE and has not been independently verified. While this information has been prepared in good faith, no representation or warranty, express or implied, is or will be made and, save in the case of fraud, no responsibility or liability is or will be accepted by PPHE and any of its subsidiaries (the Group) or by any of their respective directors, officers, employees, agents or advisers in relation to the accuracy or completeness of this presentation or any other written or oral information made available to any interested party or its advisers and any such liability is expressly disclaimed. No information set out or referred to in this presentation shall form the basis of any contract. This presentation has been delivered to interested parties for information only. The recipient agrees to keep confidential any written or oral information contained herein or otherwise made available in connection with the Group. This presentation must not be copied, reproduced, distributed or passed to others at any time. 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In particular, this presentation should not be distributed, directly or indirectly, by any means (including electronic transfer) in or into Canada, Australia, Japan, the United States or the Republic of South Africa or to any citizens, nationals or residents thereof, or to any corporation, partnership or other entity created or organized under the laws of those jurisdictions or to any “US Person” as defined in Regulation S under the US Securities Act of 1933 (as amended). Any such distribution could result in a violation of relevant securities laws of such jurisdictions. This presentation should not be considered as the giving of investment advice or any recommendation by PPHE or any other member of the Group or by any of their respective officers, directors, employees, agents or advisers. Each person to whom this presentation is made available must make his or its own independent assessment of PPHE and the Group after making such investigation and taking such advice as he or it may consider necessary or appropriate. In particular, this presentation does not replace a review of any financial or other information published by PPHE via a Regulatory Information Service and ongoing reports. Any opinions, forecasts or estimates in this presentation constitute a judgment as at the date of this presentation. There can be no assurance that future results or events will be consistent with any such opinions, forecasts or estimates. Matters discussed in this document may constitute forward-looking statements. Forward-looking statements are generally identifiable by the use of the words "may", "will", "should", "plan", "expect", "anticipate", "estimate", "believe", "intend", "project", "goal" or "target" or the negative of these words or other variations on these words or comparable terminology. Forward-looking statements reflect the current views of PPHE with respect to future events and financial performance and may include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. Forward-looking statements involve a number of known and unknown risks, uncertainties and other factors that could cause PPHE's or its industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. All enquiries relating to this presentation should be directed to Chen Moravsky, Deputy Chief Executive Officer & Chief Financial Officer, PPHE Hotel Group Limited at [email protected].

2 PPHE Hotel Group | Company Profile

Key Strengths


• Integrated and entrepreneurial approach – hotel development, design, construction, ownership and operation

1

• Profitable niche – expanding "affordable luxury" with upscale hotels in major gateway cities and regional centres

2

• Global partnership – powerful distribution network through the Carlson partnership

3

• Pipeline – significant portfolio and brand growth potential through organic and external expansion

4

5 • Financial track record – driving top line growth and delivering industry leading profit margins

• Management team – highly experienced, streamlined and closely involved senior management team

6

• Flexible partnership solutions – aligned with stakeholders to tailor the right agreement for each hotel or hotel project

7

Park Plaza Westminster Bridge London

art’otel amsterdam

Park Plaza Wallstreet Berlin Mitte

Summary

Financial Highlights


• 2014 Revenue up 10.5% to €270.4 million, LFL revenue increased by 6.1% to €253.2 million • 2014 RevPAR up 12.0% to €113.6 • 2014 EBITDA up 14.6% to €94.8 million, LFL EBITDA increased by 14.5% to €933.6 million • 2014 Normalised profit before tax of €32.9 million while 2014 reported profit before tax of

€41.6 million • 2014 Normalised earnings per share €0.79 while 2014 reported basic/ diluted earnings per share of €1.00 • Proposed final dividend of 10.0 pence per share

PPHE Hotel Group

1989 Acquisition of first

hotel

6

Countries

38 Hotels

8,338 Rooms in operation

1,375 Rooms under development

2,500+

Employees

Park Plaza Westminster Bridge London

art’otel amsterdam

Park Plaza Histria Pula

PPHE Hotel Group | Company Profile 5

Our Business Types

6

Ownership

•We aim to own hotels in key gateways cities in Europe where capital value is likely to appreciate over time.

Projects

•We have a proven track record that on completion of our projects we create an upside in property value and benefit from operating revenues.

Operating Leases

•We manage all aspects of the operation of the hotel, from sales and marketing to reservations and food and beverage to human resources. The benefit of such agreements is that this model is capital light.

Joint Ventures & Associates

•This business type enables us to establish a presence in key markets and emerging markets. By securing long-term management contracts the Group benefits from fee-based income.

Management & Franchise

•We have management contracts in place for all of owned, co-owned and leased hotels. In addition, we have entered into several management and / or franchise contracts with third parties.

PPHE Hotel Group | Company Profile

Delivering stabilised annual

return on shareholder capital

Maintaining high EBITDA margin

Improving guest experience

through consistent service

delivery and product

enhancements

Driving growth by expanding hotel

portfolio through a variety of business

models

Improving overall performance

through innovative revenue

generation and marketing initiatives

Leveraging partnership with Carlson to further

grow revenues

Strategy

Realise growth

potential


Current Portfolio


Hotel locations Contract mix

6 Countries

8,338 rooms in operation

1,375 rooms in pipeline

United Kingdom 2,790 rooms 1,198 rooms London (6 hotels & in operation in pipeline 4 projects) Cardiff Leeds Nottingham

The Netherlands 1,117 rooms Amsterdam (4 hotels) in operation Utrecht Eindhoven

Germany 1,423 rooms 177 rooms Berlin (5 hotels) in operation in pipeline Cologne Dresden Nuremberg (project)

Other 3,008 rooms

Croatia (5 hotels) in operation Budapest Tel Aviv

16

12

6

4

4

Part owned

Wholly owned

Operating leases

Management and franchise agreements

New hotel projects (all ownership of 50% or more)

Development pipeline

Project Location Operating structure

No of rooms

Status

Park Plaza Arena Pula1 Pula, Croatia

Owned and management contract

175 Expected to open 2015

Park Plaza Nuremberg Nuremberg, Germany



Park Plaza Riverbank London extension and reconfiguration

London, United Kingdom


184 Expected to be completed 2015

Park Royal London project




Project near London Waterloo Station




art’otel london hoxton London, United Kingdom

Joint venture and management contract



1 Following extensive renovations, Hotel Park (which is part of the Arenaturist group) will be rebranded to Park Plaza Arena Pula, and this is therefore not a new hotel for the Group.

PORTFOLIO OF BRANDS

• Park Plaza® Hotels & Resorts

• art’otel®

• Arenaturist


PPHE Hotel Group – brands

Park Plaza® Hotels & Resorts

• PPHE Hotel Group has an exclusive perpetual territorial licence from Carlson for EMEA

• 22 hotels, 5,843 rooms (in EMEA), 1,198 rooms (4 hotels) in the pipeline

Park Plaza Vondelpark, Amsterdam

Park Plaza County Hall, London

art’otel®

• 7 hotels, 1,058 rooms, 352 rooms (1 hotel) in the pipeline

• Contemporary collection of lifestyle hotels

• With each hotel dedicated to a signature artist

Arenaturist

• 7 hotels, 6 holiday apartment complexes, 8 campsites including 4 Park Plaza branded and fully renovated hotels

• Operated with a significant minority interest by PPHE Hotel Group

Leveraging Carlson Relationship

Carlson Worldwide Headquartered in Minneapolis, MN 1,350 hotels

(in operation and under development) In 105 countries and territories1 #1 Ranked Travel management company1

150 countries and territories Carlson Wagonlit Travel (CWT)2

1 As of Q2 2014 2 As of Q4 2013


Central reservation and

distribution system

Club Carlson rewards

programmes for guests, planners and businesses

Global sales network

Global footprints cross selling and

marketing

Look to book travel agent programme

Powerful online and mobile platforms

Operating Performance

Operating Key Performance Indicators 2010-2014


77.4 77.7

77.4

80.7

83.7

2010 2011 2012 2013 2014

Occupancy (in %)

110.7 119.2

130.9 125.5

135.6

2010 2011 2012 2013 2014

Average Room Rate (in €)

85.7

92.6

101.3 101.4

113.6

2010 2011 2012 2013 2014

RevPAR (in €)

Operational Highlights 2014

Successful divestment Entered into 50:50 joint venture for two hotels

in Berlin, Germany, while continuing to manage these hotels under

long-term management contracts

art’otel refinancing Completed €24.0 million refinancing for art’otel

amsterdam which opened in 2013

London Waterloo £80.0m development loan Secured £80.0 million loan to develop new

hotel near London Waterloo Station

Appointed Deputy CEO Promoted Chen Moravsky to Deputy CEO to

assist with the Company’s next stage of growth

Opened 4th Park Plaza in Croatia Opened the fully refurbished Park Plaza

Belvedere Medulin in Croatia with 427 rooms, our fourth Park Plaza hotel in this market


25-year milestone Celebrated our 25-year journey since Eli

Papouchado, the Company’s Chairman, acquired the first hotel that is Park Plaza Eindhoven today

Building 1,023 rooms Construction commenced at three hotels in London

and one in Nuremberg

Record guest satisfaction Achieved a record guest satisfaction level of

8.36 on a scale of 1-10

Record service levels Delivered record service levels as rated by

our guests, of 8.62 on a scale of 1-10

Record employee satisfaction Recorded an all-time high employee satisfaction

score of 83.5% on a scale of 1-100

Financial Performance and Position

Financial Key Performance Indicators 2010-2014


139.8

202.4

242.1 244.8

270.4

2010 2011 2012 2013 2014

Total Revenue (in € million)

46.5

75.0

96.8 93.4

105.2

2010 2011 2012 2013 2014

EBITDAR (in € million)

37.6

65.0

85.6 82.7

94.8

2010 2011 2012 2013 2014

EBITDA (in € million)

Financial Key Performance Indicators 2010-2014


6.1

13.6

24.1

21.9

32.9

2010 2011 2012 2013 2014

Normalised Profit before Tax

(in € million)

0.16

0.33

0.59 0.54

0.79

2010 2011 2012 2013 2014

Normalised Earnings per Share

(in €)

0.06

0.12

0.14

0.19

2011 2012 2013 2014

Dividend per Share (in £)


Total Revenue Growth €’000

244.8

14.6

9.7 (6.2) 7.5 270.4

200,000

210,000

220,000

230,000

240,000

250,000

260,000

270,000

280,000

Reported 2013 Growth FX impact Divestments New openings Reported 2014

10.5% Revenue Growth


RevPAR Growth €

101.4

4.4

4.2

2.6 1.0 113.6

€ 80.0

€ 85.0

€ 90.0

€ 95.0

€ 100.0

€ 105.0

€ 110.0

€ 115.0

€ 120.0


12.0% RevPAR Growth


EBITDA Growth €’000

82.7

8.4

3.5 (1.0)

1.2 €94.8

50,000

55,000

60,000

65,000

70,000

75,000

80,000

85,000

90,000

95,000

100,000


14.6% EBITDA Growth

Return on Capital Employed €m


Owned Properties Joint ventures and

associates

In operation

Under develop-

ment Operating

leases In operation

Under develop-

ment Management and

central costs Reported

Capital employed 191.2 14.6 2.5 28.9 17.3 69.4 323.9

Adjusted EBITDA 94.7 - 2.1 3.4 - (5.4) 94.8

Normalised profit before tax

31 December2014 34.4 (1.2) 1.7 3.8 0.1 (5.9) 32.9

Normalised profit before tax

31 December 2013 27.4 (1.3) 0.4 2.6 0.2 (7.4) 21.9

Financial Leverage


1 Property includes the balance of Property, Plant and Equipment (EUR 823 million), bank funding equals the total long and short term borrowings (EUR 555 million). 2 The fair value represents the last independent valuation carried out on properties either for the 2011 prospectus, or subsequently for bank lending purposes. Development properties are valued at cost.

Equity

funded

33%

(€268m)

Bank

funded

67%

(€555m)

Loan to Value Properties at Book Value

at 31 December 20141

Equity

funded

44%

(€436m) Bank

funded

56%

(€555m)

Loan to Value Properties at Fair Value1,2

Outlook


• 2015 and 2016 will see a renovation program covering 10 hotels which will impact trading performance • Development programme will provide the foundations for growth in 2016 and going forward • The Company continues discussions regarding release of value from its hotel assets whilst retaining operational control • PPHE Hotel Group well positioned to deliver its target of 10,000 hotel rooms by 2019 • 2015 has begun well

Appendix

2014 Income Statement¹


FY 2014 €’000

FY 2013 €’000

Change %

Total Revenues 270,442 244,761 +10.5

Operating expenses (165,259) (151,576) +9.0

EBITDAR 105,183 93,185 +12.9

Rental expenses (10,385) (10,483) -0.9

EBITDA 94,798 82,702 +14.6

Depreciation and amortisation (24,405) (23,862) +1.8

EBIT 70,393 58,840 +19.6

Profit before tax 41,649 27,310 +52.5

Profit for the period 41,413 27,659 +49.7

Reported earnings per share 1.00 0.67 +49.3

1 Certain amounts here do not correspond to the annual Consolidated statements as at 31 December 2013 due to the retrospective application of an accounting policy change.


€182,072 67.3%

€72,656 26.9%

€5,320 2.0%

€9,479 3.5%

€915 0.3%

Room revenue

F&B revenue

Minor operating

Fee income (outside group)

Other

Group Revenue in December 2014 €’000 €270,442

Full Year Revenue Contribution Segments €m1



2009 2010 2011 2012 2013 2014

Management & Holdings 8.0 7.7 7.8 10.6 7.9 10.2

Germany 23.5 27.7 30.2 32.6 32.8 28.5

Netherlands 19.8 22.8 24.8 37.8 42.4 53.7

United Kingdom 29.0 81.6 140.0 161.1 161.7 178.0

0

50

100

150

200

250

300

Management & Holdings

Germany

Netherlands

United Kingdom

80.3

139.8

202.8

242.1 244.8

270.4

Full Year EBITDA Contribution Segments €m1



2009 2010 2011 2012 2013 2014

Management & Holdings 2.1 5.8 10.8 14.2 14.6 14.5

Germany -3.7 -0.3 -1.0 -0.5 - 0.4

Netherlands 6.5 7.6 7.8 12.3 11.4 15.6

United Kingdom 11.4 24.5 47.5 59.5 56.7 64.3

-20

0

20

40

60

80

100

Management & Holdings

Germany

Netherlands

United Kingdom

16.3

37.6

65.1

85.5 82.7

94.8

Operating Key Performance Indicators 2010-2014


81.0

83.3

82.1

82.9

83.5

2010 2011 2012 2013 2014

Employee Satisfaction

(scale 1-100%

8.27

8.23

8.30 8.30

8.36

2010 2011 2012 2013 2014

Guest Satisfaction

8.39 8.38

8.48 8.50

8.62

2010 2011 2012 2013 2014

Service Performance

(scale 1-10)

Hospitality Food & Beverages – example concepts


Chino Latino is a modern Pan-Asian cuisine

restaurant with a Latin cocktail bar, located in the UK (3) and Germany (1)

Located at Park Plaza Victoria London, TOZI is an

Italian restaurant with a shared dining concept

Located at our flagship art’otel amsterdam, 5&33 incorporates a destination bar, restaurant and gallery

Board of Directors

Eli Papouchado (77) Non-Executive Chairman

Boris Ivesha (69) President & Chief Executive Officer

Chen Moravsky (44) Deputy Chief Executive Officer & Chief Financial Officer

PPHE Hotel Group | Company Profile

Kevin McAuliffe (57) Non-Executive Director & Senior Independent Director

Elisha Flax (53) Non-Executive Director

Nigel Jones (55) Non-Executive Director

32

Largest Shareholders

Number of issued shares

41,630,792

Held in treasury by PPHE Hotel Group

1,862,000

Number of issued shares (excluding treasury)

39,768,792

Largest shareholders Number of shares Percentage of issued share capital (excluding treasury)

Red Sea Group¹ 18,552,714 44.56%

Molteno Limited¹ 7,990,027 19.19%

Total Red Sea Group and Molteno Limited

26,542,741 63.75%

¹ Mr Papouchado, the Chairman, is deemed interested in the shares held by the Red Sea Group and Mr Ivesha, the CEO, is deemed interested in shares held by Molteno Limited


List of Hotels

Current portfolio

Hotels included in the Group

Location Ownership interest No. of rooms Since

Park Plaza Riverbank London London 100% 395 2005

Plaza on the RiverTM

- Club & Residence London 100% 66 2005

Park Plaza Sherlock Holmes London London 100% 119 2001

Park Plaza Victoria London London 100% 299 2001

Park Plaza Westminster Bridge London London 100%¹ 1,019 2010

Park Plaza Leeds Leeds 100% 187 2003

Park Plaza Nottingham Nottingham 100% 178 2002


¹ Such percentage reflects 100% of the voting rights in the Company

List of Hotels

Current portfolio

Hotels included in the Group


Park Plaza Amsterdam Airport Amsterdam 100% 342 2010

Park Plaza Victoria Amsterdam Amsterdam 100% 306 1993

art’otel amsterdam Amsterdam 100% 107 2013

Park Plaza Vondelpark, Amsterdam Amsterdam 100% 138 2006

Park Plaza Eindhoven Eindhoven 100% 104 1989

Park Plaza Utrecht Utrecht 100% 120 1995

art’otel berlin kudamm Berlin 50% 133 2006

art’otel berlin mitte Berlin 50% 109 2000

Sub Total 3,622


List of Hotels (cont.)

Current portfolio

Hotels under operating leases


art’otel berlin city center west Berlin - 152 2001

Park Plaza Prenzlauer Berg Berlin Berlin - 155 2000

Park Plaza Wallstreet Berlin Mitte Berlin - 167 2006

art’otel budapest Budapest - 165 2000

art’otel cologne Cologne - 218 2010

art’otel dresden Dresden - 174 2000

Sub Total 1,031



Current portfolio

Hotels operated by the Group in which the Group has a non-controlling interest or no interest


Arenaturist Istria, Croatia 15-20% 2,814 2008

Park Plaza County Hall London London - 398 2008

Sub Total 3,212



Current portfolio

Hotels under franchise agreements


Park Plaza Cardiff Cardiff - 129 2005

Park Plaza Orchid Tel Aviv Tel Aviv - 194 2007

Park Plaza Trier Trier - 150 2003

Sub total 473

Total (all hotels)

8,338


Case Study: Park Plaza Westminster Bridge, London

• One of the largest hotels in London with 1,019 bedrooms

• PPHE Hotel Group acquired control of Park Plaza Westminster Bridge in 2008

• Financed acquisition through the sale of 535 units to third party investors

• Fully opened in September 2010, first full operational year in 2011

• Currently 90% occupied, contributing approximately 35% of total consolidated revenue in 2013

• Full service hospitality offering:

– Award winning meeting and event venue (Westminster Ballroom)

– State of the art conferencing facilities

– Destination bars and restaurants

– Europe’s only Mandara Spa


Chen Moravsky Deputy Chief Executive Officer & Chief Financial Officer 12 David Mews London, W1U 6EG UNITED KINGDOM T: +44 20 7034 4808 T: +31 20 717 8603 M: +44 77 7038 1064 M: +31 6 5113 6255 E: [email protected] pphe.com

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