Covivio Hotels : Universal Registration Document_Covivio Hotels_2023

UNIVERSAL REGISTRATION DOCUMENT

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E D I T I O N

Contents

1	KEY FIGURES 2023	2
MANAGEMENT REPORT	7
	1.1	Strategy and outlook	8
	1.2	Activity of the company and its subsidiaries	8
	1.3	Portfolio	22
	1.4	Valuation of assets and NAV	25
	1.5	Net financial income	34
	1.6	Shareholder structure at 31 December 2023	43
	1.7	Stock market and dividend	48
	1.8	Information about the company and its investments	50
	1.9	Supplementary report by the General Manager to the Combined General Meeting of 15 April 2024	52
2 RISK FACTORS, INTERNAL CONTROL AND RISK MANAGEMENT	61
	2.1	Risk factors	62
	2.2	Internal control, risk management and compliance policy	78
3	2.3	Trends and outlook for 2024	84
SUSTAINABLE DEVELOPMENT	87
	3.1	A comprehensive and integrated sustainable development strategy	88
	3.2	Information on European taxonomy	91
4	3.3	Information on the Green Financing Framework	92
CONSOLIDATED FINANCIAL STATEMENTS AS AT 31 DECEMBER 2023	95

5

6

7

4.1	Consolidated financial statements as at 31 December 2023	96
4.2	Notes to the consolidated financial statements	101
4.3	Statutory Auditors' report on the consolidated financial statements	143
4.4	Company financial statements as at 31 December 2023	148
4.5	Notes to the company financial statements	151
4.6	Statutory Auditors' report on the annual financial statements	182
4.7	Statutory Auditors' special report on regulated agreements	186
4.8	Presentation of the agenda and draft resolutions for the Combined General Meeting
	of 15 April 2024	188
4.9	Statutory Auditors' report on the capital reduction	200
4.10	Statutory Auditors' report on the issue of shares and other securities with or without waiver
	of shareholders' preferential subscription right	200
4.11	Statutory Auditors' report on the issue of ordinary shares or other transferable securities reserved
	for the benefit of subscribers to a corporate savings plan	202

CONTROL OF THE COMPANY	205
5.1	Report by the Supervisory Board to the Combined General Meeting of 15 April 2024	206
5.2	Report by the Supervisory Board on corporate governance	209
INFORMATION AND MANAGEMENT	263
6.1	General information concerning the issuer and its share capital	264
6.2	Company overview	268
6.3	Administration, Management and Supervisory Board	271
6.4	Person responsible for the document	274
6.5	Annual information document (article 221-1-1 of the AMF General regulation)	275
6.6	Summary appraisers' report	276
CROSS-REFERENCE TABLES	283
	Cross-reference table	284
	Table of concordance with the annual financial report	286
	Table of concordance with the report of the Annual General Meeting	286

2023

Universal

Registration

Document

including the Annual Financial Report

This Universal Registration Document was filed on 19 March 2024 with the AMF, in its role as the competent authority under Regulation (EU) 2017/1129, without prior authorisation in accordance with Article 9 of said Regulation. The Universal Registration Document may be used for the purposes of a public o"ering of financial securities or for the listing of financial securities for trading on a regulated market if it is supplemented by a note regarding financial securities and, where applicable, a summary and all amendments made to the Universal Registration Document. The entire document is approved by the AMF in accordance with Regulation (EU) 2017/1129.

The Universal Registration Document is a reproduction of the o†cial version of the Universal Registration Document, which was prepared in xHTML and is available on our website www.Covivio-hotels.fr.

Covivio Hotels

Partnership limited by shares with share capital of €592,565,808

Registered o†ce: 10 rue de Madrid, 75008 Paris

Paris Trade and Companies Register 955 515 895

COVIVIO HOTELS UNIVERSAL REGISTRATION DOCUMENT 2023 1

Key figures 2023

Covivio Hotels is a public real estate investment company (Société d'investissement immobiliers cotée - SIIC) and a market leader in hotels.

Covivio Hotels is now the leading investor in hotel real estate in Europe. Covivio Hotels has a unique hotel portfolio comprising 313 hotels located at the centre of major European cities. It currently partners with around 16 hotel chains representing some 30 brands in Europe. Midscale and upscale hotels make up 74% of its portfolio.

Covivio Hotels supports brands in their leasing, operating properties and developments, positioning itself alongside them in Europe's most dynamic cities.

Covivio Hotels is supported by institutional shareholders

including Covivio, the life insurance subsidiaries of Crédit Agricole, Crédit Mutuel-CIC, BNP Paribas, Generali, Société Générale, and Caisse des Dépôts et Consignations.

The company's investment policy is focused on building partnerships with leading operators in each business sector, as well as innovative players who stand out for their pioneering, profitable concepts, with a view to oƒering shareholders a recurring return on their investment.

The sector classification of the portfolios reflects the reporting segments used by the Covivio Hotels management. There are three segments:

• hotel leased properties (Accor, B&B, NH Hotel group, IHG, Motel One, Meliá, Hotusa, Barceló group, Pierre et Vacances, Club Med, MEININGER);
• hotels under management (Rezidor, Marriott, Accor, IHG);
• retail premises.

Overall distribution of the portfolio (Group Share) by value at 31/12/2023

76% 23% 1%

	Hotel leased	Hotels under	Retail
	properties	management
				2023	2022
(In € thousand)		fiscal year	fiscal year
Revenues, Group Share		323,607	286,236
Of		Hotel leased properties
which:	(rental income)		244,724	221,897
		Hotels under management
		(EBITDA)		72,516	60,101
		Retail premises (rental income)	6,367	4,238
				2023	2022
(In € million)		fiscal year	fiscal year
Portfolio value, Group Share	5,822	6,022
Of
which:	Hotels leased properties	4,434	4,595
		Hotels under management	1,337	1,375
		Retail premises		51	53

2 COVIVIO HOTELS UNIVERSAL REGISTRATION DOCUMENT 2023

Key figures 2023

Simplified consolidated income statement

(In € thousand)	2023 fiscal year	2022 fiscal year
Net Rental Income	257,393	243,998
Managed hotel income	74,634	61,927
Other Activity income	16	38
Net operating costs	-19,266	-17,888
Depreciation of operating asset	-48,243	-38,184
Net change in provisions and other	23,852	10,724
Operating income	288,386	260,616
Income from asset disposals	341	3,042
Result of value adjustments	-197,534	92,160
Income from disposals of securities	-2	-2
Result of changes in scope	-3,791	-14
Operating income (loss)	87,393	355,802
Net financial income	-145,269	132,396
Share of income from companies accounted for under the equity method	-2,020	19,428
Net income before tax	-59,896	507,626
Taxes	34,586	-5,577
Net income	-25,311	502,048
Profit from discontinued operations	0	0
Minority interests	13,737	-23,258
Net income Group Share	-11,574	478,790

Figures, Group Share

	2023 fiscal year	2022 fiscal year
Net income, Group Share (in € per share)	-0.08	3.23
EPRA Earnings (in €M)	238.8	220.9
EPRA Earnings (in € per share)	1.61	1.49
EPRA NTA (in €M)	3,550	3,722
EPRA NTA (in € per share)	24.0	25.1
EPRA NDV (in €M)	3,512	3,763
EPRA NDV (in € per share)	23.7	25.4
Dividend* (in € per share)	1.30	1.25

• 2023 dividend proposed to the General Meeting of 15 April 2024.

Number of shares during the period	2023 fiscal year	2022 fiscal year
Number of shares at opening	148,141,452	148,141,452
Number of shares created by capital increase	0	0
Number of shares at period-end*	148,141,452	148,141,452
Average number of shares	148,141,452	148,141,452

• Including treasury shares: 7,687 at 31 December 2023 (versus 10,868 at 31 December 2022).

Simplified consolidated balance sheet

(In € thousand)	Net 31/12/2023	Net 31/12/2022		Net 31/12/2023	Net 31/12/2022
ASSETS			Liabilities
Non-current assets	6,290,861	6,714,219	Shareholders' equity	3,550,709	3,762,511
Current assets	324,064	192,368	Non-current liabilities	2,743,274	2,811,566
Cash	108,780	127,408	Current liabilities	429,722	459,919
ASSETS	6,723,705	7,033,995	LIABILITIES	6,723,705	7,033,995

COVIVIO HOTELS UNIVERSAL REGISTRATION DOCUMENT 2023 3

Key figures 2023

Features of debt as at 31 December 2023

At 31 December 2023, the Group Share of net financial debt stood at €2,260 million, with an average rate for the period of 2.43% and an average maturity of 3.6 years. In 2023, the average active hedging rate was 88.9%.

4 COVIVIO HOTELS UNIVERSAL REGISTRATION DOCUMENT 2023

Key figures 2023

COVIVIO HOTELS UNIVERSAL REGISTRATION DOCUMENT 2023 5

Zoku Paris

© Covivio / DR

313	hotels in the heart
	of major European cities,
	with a value of €6.4 billion

6 COVIVIO HOTELS UNIVERSAL REGISTRATION DOCUMENT 2023

1

Management

report

1. Strategy and outlook
2. Activity of the company and its subsidiaries

1. 2023 events
2. Hotels portfolio
3. Operating retail portfolio

1.3 Portfolio

1. Geographic area
2. Breakdown of revenues
3. Lease schedule
4. Hotel occupancy rate

1.4 Valuation of assets and NAV

1. Appraisal valuations
2. Net asset value (NAV) - EPRA format

8	1.7	Stock market and dividend	48
	1.7.1	Share price at 31 December 2023	48
8	1.7.2	Dividend distribution	49
1.7.3	Shares held by corporate officers	49
8

10 1.8 Information about the company

18		and its investments	50
	1.8.1	Group organisation	50
22	1.8.2	Equity investments	51
22	1.8.3	Results of subsidiaries and equity
23		investments	51
24	1.8.4	Research and development activities
24		of the company and its subsidiaries	51
1.8.5	Significant events since the end
25		of the fiscal year	51
1.8.6	Trend information	51
26
1.8.7	Related-party transactions	51
31
1.8.8	Competitive position	51

1.5 Net financial income

34

1.5.1 Consolidated financial statements

as at 31 December 2023	34
1.5.2 Company financial statements
as at 31 December 2023	38

1.9 Supplementary report by the General

Manager to the Combined General
Meeting of 15 April 2024	52

1.6 Shareholder structure

	at 31 December 2023	43
1.6.1	Information on share capital	43
1.6.2	Distribution of share capital
	and voting rights	44
1.6.3	Threshold crossing disclosures
	and declarations of intent	44
1.6.4	Changes in equity over the last
	five fiscal years	45
1.6.5	Information on treasury shares and share
	buyback programme	46
1.6.6	Options for the subscription or purchase
	of treasury shares	47

1.6.7 Transactions carried out by corporate officers and related persons

on the company's securities

47

COVIVIO HOTELS UNIVERSAL REGISTRATION DOCUMENT 2023 7

1 Management report

Strategy and outlook

1.1 Strategy and outlook

Covivio Hotels - a real estate company listed on Compartment A of the Euronext regulated market in Paris, having opted for SIIC status - had, at 31 December 2023, a portfolio of 352 assets, including 313 hotels, with a total appraisal value of €6.4 billion (€5.8 billion Group Share), located throughout France and Europe.

The strategy of Covivio Hotels, Europe's leading hotel real estate company, is based on partnerships with the most innovative hotel operators in France and in the rest of Europe. It is in this spirit of partnership that Covivio Hotels continued its development in 2023, signing new 15-year leases with Meliá for three hotels in Barcelona, Valencia and Malaga and with the launch of a programme to reposition the Novotel hotel in Bruges.

Covivio Hotels and its partners hold regular partnership Committee meetings to define portfolio development initiatives, analyse the business and operations, and monitor the progress of works programmes.

2024 outlook

The return of tourist numbers to 2019 levels and the major events expected in Europe in 2024 point to a promising year ahead. Covivio Hotels accordingly intends to continue supporting its partners, the major European and international operators, and to take full advantage of the asset management work carried out on its portfolio.

1.2 Activity of the company and its subsidiaries

1.2.1 2023 events

Strong growth in earnings

Hotel performances were exceptional in 2023. 2023 average RevPAR was up 16% in Europe, mainly due to higher average room rates (up 23% vs 2019). Covivio Hotels' main European markets significantly exceeded their 2019 levels, with RevPAR growth ranging from 6% in Germany to 32% in Italy. The French market, the world's leading tourist destination, records a RevPAR increase of +22%.

Tourist attendance in the European Union has returned to a level close to pre-pandemic times. The outlook for 2024 is very promising in Europe, especially in France, with numerous events such as the Olympic Games or the European Football Championship in Germany.

Numerous asset management transactions

In Madrid, a 9-year extension lease was signed for the 146-room, 4-star NH Colón Madrid hotel in the city centre. This agreement will result in a rent increase of approximately 15%.

In Amsterdam, a hotel also leased to NH Hotel Group underwent a €10 million works programme in 2023, involving the renovation of rooms and bathrooms, and the refurbishment of technical facilities. Funded by NH Hotel Group, these works are set to boost hotel performance and variable rents under the lease.

In Spain, Covivio Hotels signed new 15-year leases with Meliá for three hotels in Barcelona, Valencia and Malaga. Covivio Hotels will fund a €14.8 million works programme to reposition these hotels and improve their energy performance. This asset management transaction will generate an increase of around 30% in fixed rents and a marginal return on investment of around 9%.

Covivio Hotels also provides asset management expertise for its portfolio of operating properties. Covivio Hotels has launched a repositioning programme for the Novotel Bruges hotel. This €12 million works programme (including technical alterations) will help upscale the hotel and considerably increase the average room rate. The target yield on cost is close to 15%. The programme includes the complete renovation of the 126 bedroom suites and the communal areas, along with the creation of 12 new rooms and a fitness area. The building's carbon footprint will also be significantly improved, mainly through the selection of sustainable technical equipment. Once this renovation is completed, the hotel will become a flagship of the Novotel brand in Europe.

Similarly, the former Crowne Plaza hotel at the Lille Europe railway station is undergoing the complete renovation of its 124 rooms and technical elements for a total investment of €7 million. A new franchise agreement has been signed with Hilton, with performance expected to be 60% higher than in 2019.

Covivio Hotels and AccorInvest have entered into exclusive negotiations with a view to consolidating their hotel properties and business assets

Covivio owns 54 hotel properties that are let to AccorInvest under long-term variable-rent leases based on revenues. AccorInvest owns the business assets for these hotels and has signed long-term management contracts with the Accor group.

The consolidation operation would take the form of an exchange of business assets, currently held by AccorInvest, for hotel properties owned by Covivio Hotels. Following this transaction, Covivio Hotels would own 24 hotel operating properties and AccorInvest would own 10. The agreed value of the properties transferred to AccorInvest is approximately €210 million (1) (5% yield) and the agreed value of the business assets acquired by Covivio Hotels is approximately €260 million (2) (12% yield). Based on 2023 earnings, the assets transferred to AccorInvest represent annual rental income of €10.6 million, while the business assets acquired by Covivio Hotels generate EBITDA of €31.0 million.

1. Excluding transfer taxes.
2. Including transfer taxes.

8 COVIVIO HOTELS UNIVERSAL REGISTRATION DOCUMENT 2023