Total Group revenue increased by 5.7% to €1.26 billion, shaped by a strong performance across the main European markets, particularly in Spain
Revenue per available room (RevPAR) registered growth of 4.5%, driven entirely by growth in the average daily rate (ADR), to €102.3, without affecting occupancy, which was flat year on year
EBITDA1 was €23.3 million higher at €208.7 million (€401 million – reported number - including the application of the IFRS 16 standard) thanks to business momentum and cost control
The Group's recurring net profit increased by €25.5 million in 9M19 to €70 million, due to lower finance costs, in addition to the positive evolution of the hotel business
Factoring in non-recurring items, the Group reported a net profit of €66 million; the year-on-year comparison is affected mainly by the absence of the significant gains reported in the first nine months of 2018 (-€45 million)
The Company ended September with a low level of net debt (€190 million) and solid cash position of €268 million, despite capex of €130 million and the payment of €59 million of dividends during the reporting period
The Company's positive earnings performance so far this year puts it in a position to reiterate its guidance(2) for record EBITDA(1) of €285 million and recurring net profit of close to €100M in full year 2019
(1) Recurring EBITDA before the reversal of provisions for onerous contracts and gains from asset sales (2) Excludes the impact of IFRS 16, IAS 29 and the integration of Minor Hotels' establishments in Portugal
- Strategic initiatives with Minor International -
Having formally integrated the operation of the hotels of Minor Hotels and NH Hotel Group in Portugal, the combined Portuguese portfolio currently stands at 17 establishments, positioning it as a leading player and consolidating its strong positioning at the upper end of the market
Framed by the joint strategy being pursued with Minor Hotels, at the end of October NH Hotel Group announced an agreement for the operation, under a lease regime, of its first hotel in Ireland, The Marker Hotel, which will be rebranded under the Anantara Hotels, Resorts & Spas luxury brand in the coming months
Today, NH Hotel Group presented its results for the first nine months of 2019, a set of earnings which continues to evidence the strength of the Group's business and financial model and enables it to reiterate its guidance for record results in 2019.
Ramón Aragonés, CEO of NH Hotel Group, said that “the strong momentum in the urban hotel segment in the main European capitals so far this year enables us to confirm the earnings guidance provided at the start of the year. Meanwhile, we look to the immediate future from a position of financial strength, thanks to our low level of debt.” He went on to add that, “our joint plans with Minor Hotels are progressing as anticipated, as is evident in the recent start-up of operation of Minor Hotels' Portuguese hotels by NH Hotel Group and the introduction of the Anantara Hotels, Resorts & Spas brand in Spain earlier this year and in Ireland in the near future”.
- 9M19 results -
Group revenue increased by 5.7% to €1.26 billion in the first nine months of 2019. Spain was once again the fastest-growing market in Europe, registering like-for-like revenue growth of 9.5%, underpinned by strong performances in Madrid, Barcelona and secondary cities. The revenue trend was also positive in Italy (+3.8%) and Benelux (+1.4%), with the Central European countries flatter, as a result of a more favourable trade fair line-up in Germany in 9M18.
Topline growth was underpinned by growth of 4.5% in RevPAR, key business metric in the hotel business. The growth in that metric is entirely attributable to growth in the ADR, to €102.3, the occupancy rate having held stable at 71.8%.
The combination of revenue growth and cost control provided a fresh catalyst for recurring EBITDA(1), which registered year-on-year growth of 13% to €209 million (a reported €401 million including the application of the IFRS 16 standard). That growth implies an increase of €23 million from 9M18 and margin expansion of one percentage point.
The reduction in finance costs, coupled with the strong underlying business dynamics, drove recurring net profit €25.5 million higher to €70 million (€62 million including the impact of IFRS 16). Factoring in non-recurring results leaves reported net profit of €66 million, down €27.6 million year-on-year, due mainly to higher gains on asset sales in the first nine months of 2018 (-€45 million).
The Group ended September with net debt of €190 million, thanks to strong cash flow generation. At the September close, the Group had €268 million of cash, despite incurring €130 million of capex and paying out €59 million in dividends (€0.15 per share against 2018 profits, paid on 14 June 2019) during the period.
These strong results, across the board, enable the Group to reiterate all of the guidance provided to the market at the start of the year, namely for recurring EBITDA(1) of €285 million and recurring net profit of around €100 million (both objectives excluding the impact of IFRS 16, IAS 29 and the positive contribution of Minor Hotels' establishments in Portugal) in full year 2019.
(1)Recurring EBITDA before the reversal of provisions for onerous contracts and gains from asset
- Portfolio developments -
At the September close, NH Hotel Group was operating 371 hotels and 57,602 rooms. In addition to the hotels added in Portugal under the scope of the integration agreement with Minor Hotels, the Company opened 11 new hotels (in Andorra, Germany, Belgium, Spain, Italy, Chile and Mexico) in 9M19. The weight of the NH Collection brand within the overall portfolio continues to increase and currently stands at 22%. The Company continues to upgrade the quality of its asset portfolio: during the reporting period it carried out refurbishment work at 27 hotels (six in Spain; six in Italy; six in Central Europe; three in Benelux; one in France; four in Latin America; and one in the USA). NH Hotel Group measures the perceived quality of its hotel guests constantly, using a number of independent sources of feedback, which have been evidencing a continuous improvement in guest ratings year after year.
- Strategic initiatives with Minor International -
Framed by the joint strategy being pursued with Minor Hotels, at the end of October, NH Hotel Group announced an agreement for the operation, under a lease regime, of its first hotel in Ireland, The Marker, which will be rebranded under Minor Hotel's luxury Anantara Hotels, Resorts & Spas brand in the coming months. That transaction is further evidence of the progress being made to integrate the two entities. The hotel in Dublin will be the third Anantara in Europe to be operated by NH Hotel Group following integration of the Anantara Vilamoura Algarve Resort in Portugal and the recent inauguration of Anantara Villa Padierna Palace in Marbella, Spain.
Meanwhile, the integration of the operation of the two groups' hotels in Portugal was made official in June, configuring a combined portfolio of 17 establishments and delivering a leadership role in this market, underpinned by strong positioning in the premium segment.
In parallel, Minor Hotels and NH Hotel Group continue to work to extract economies of scale, cross-sell to their respective customer bases and develop their flagship brands in their respective geographies.
Hotel business performance by market in 9M19
Ratios: like-for-like hotel data + hotels under refurbishment
Spain. Revenue in the Company's home market increased by 9.5% year-on-year to €324.8 million, driven by excellent performances in Madrid and Barcelona. The Madrid hotels registered RevPAR growth of 13.1%, thanks to a stronger event and meeting line-up, while the Barcelona establishments sustained RevPAR growth of 16.8%, showcasing a solid recovery.
Italy. Revenue in this country increased by 3.8% to €225.3 million, underpinned by RevPAR growth of 3.1%, in turn shaped by stronger prices and occupancy. The main cities performed well, with RevPAR climbing 1.6% in Rome and 1.2% in Milan, where momentum is improving as the year unfolds.
Benelux. Revenue in this region was 1.4% higher at €267.1 million, thanks to a strong performance in Brussels (RevPAR: 10.9%) and a significant improvement at the congress-oriented hotels in The Netherlands. The Amsterdam market was also strong, with RevPAR growth of 2.0%.
Central Europe. Revenue in this region (€276.4 million) were flat due to a weak trade fair line-up in the third quarter, the refurbishment of a hotel in Munich and growth in supply in Frankfurt. Nevertheless, RevPAR increased by 0.9%. Hamburg and the German cities posted a strong performance in terms of RevPAR (+3.6% and +1.8%, respectively), while Austria posted significant growth of 9.4%.
America. Revenue in this region increased by 5% in current values to €88 million, partially due to the accounting impact of standard IAS 29 for hyperinflation in Argentina since the third quarter of 2018. By countries: Mexico posted topline growth of 5% (current values); Argentina reported growth despite including the effect of hyperinflation and the significant currency devaluation; and in Colombia and Chile, revenue decreased by 7.8% (current values), affected by currency weakness.
About NH Hotel Group
NH Hotel Group is a consolidated multinational player and a benchmark urban hotel operator in Europe and the Americas, where it runs more than 370 hotels. In 2019, the Company is working with Minor Hotels on integrating all of its hotel trademarks under a single corporate umbrella brand with a presence in over 50 countries worldwide. A portfolio of over 500 hotels has been articulated around eight brands - NH Hotels, NH Collection, nhow, Tivoli, Anantara, Avani, Elewana and Oaks - to forge a broad and diverse range of hotel propositions in touch with the needs and desires of today's world travellers.