NH Hotel Group - The recovery in business travel coupled with sustained demand in the leisure segment drove revenue above EUR200 million in September, a new monthly record for the Group.

Higher prices and strict cost control resulted in third quarter Revenue, EBITDA and Recurring Net Profit above the 3Q19 levels.

Strong cash generation allows to continue with the deleveraging initiated in 2021. As a result, in August 2022, the Group repaid EUR100m of its ICO syndicated loan and an additional EUR100m repayment to be completed in December has been approved. Proceeds from the sale of non-core assets and limited capex investments enabled a EUR253m reduction in net financial debt during the first nine months, ending September at EUR315m.

The Group remains 'moderately optimistic' thanks to a strong performance in October, as well as the return of MICE-related travel and long-haul international traveller.

Madrid - The gradual recovery in business travel and sustained momentum in the leisure segment drove NH Hotel Group's revenue to EUR516m in 3Q22, which is 18.3% above the 3Q19 equivalent. In the first nine months of 2022, the hotel group's revenue amounted to EUR1.26bn, slightly above 9M19 levels. The ADR maximisation strategy coupled with stringent cost control unlocked another consecutive quarter of record earnings, partially mitigating the impact of inflation, and reaching a Recurring Net Profit of EUR31m in 9M19. Total Net Profit, including net capital gains on asset rotation, was EUR56m.

In the third quarter, NH Hotel Group posted a Recurring Net Profit of EUR47m, compared to a loss of EUR27.4m in the same quarter of last year. In September the company reported over EUR200m of revenue, topping the previous monthly record attained in June of this year, when revenue came to over EUR190m.

According to Ramon Aragones, CEO of NH Hotel Group, the gradual recovery in business travel all across Europe since June has further reinforced the Group's revenue structure. Despite the slowdown in the first quarter due to omicron variant, healthy momentum in the average daily rate (ADR) and occupancy metrics since March meant that in the next six months revenue topped total revenue between January and September 2019, before the onset of the pandemic. In parallel, we have managed to cut Net Financial Debt substantially, from EUR568m at year-end 2021 to just EUR315m as of September close. Medium term, the swift recovery in the meetings, incentives, conferences & exhibitions (MICE) segment and excellent outlook for long-haul international air travel leave us moderately optimistic, foreseeably offsetting the potential ups and downs in the economy and leisure tourism over the coming months.

Business dynamics have kept free cash flow in positive territory since March. As of 30th September, NH Hotel Group had EUR668m of liquidity: EUR401m of cash and another EUR267m of undrawn credit lines. The Group reduced its Net Financial Debt from EUR568m at year-end 2021 to EUR315m as of the September close. In August, NH voluntarily prepaid EUR100m of its EUR250m state-guaranteed ICO syndicated loan due in 2026 and an additional EUR100m repayment to be completed in December has been approved. This voluntary prepayment extends the deleveraging process started in 2021 when the Group fully repaid its Revolving Credit Facility (RCF).

Strong revenue growth has partially offset the increase in payroll and operating costs. Recurring EBITDA amounted to EUR353.9m in 9M22, which is five times the EUR66.2m reported in 9M21. Recurring Net Profit during the same period came to EUR31m, while reported Total Net Profit was higher at EUR56.3m, thanks to net capital gains on the disposal of non-core assets.

In 3Q22, the average daily rate (ADR) at NH's hotels was EUR130, up 16.9% on a like-for-like basis from 3Q19 and 42.2% higher year-on-year. At 69.5%, third-quarter occupancy was 5pp below that of 3Q19. In September alone, the significant rebound in the business travel segment, which began in June, drove the monthly ADR to EUR145 and occupancy to 75%. Between January and September 2022, the ADR across the Group's 350 hotels amounted to EUR120, rising from EUR90 in the first quarter to EUR128 in the second and EUR130 in the third.

NH's revenue in the first nine months of 2022 totalled EUR1.26bn, which is EUR769m more than in 9M21. By country that revenue growth breaks down as follows: EUR185m originated in Spain; EUR149m in Benelux; EUR125m in Italy; EUR112m in Central Europe; EUR57m in Latin America; with the remaining 145 stemming from net changes in the perimeter, mainly the Boscolo portfolio of nine hotels, the NH Collection Copenhagen and the NH Hannover.

As for occupancy and average daily rates, the relative buoyancy in southern Europe in 9M22 is attributable to the swift easing of restrictions in the wake of the slowdown induced by the omicron variant. In Spain those metrics amounted to 69% and EUR121, thanks to improved momentum in Madrid and strong dynamics in Barcelona and secondary cities. In Italy occupancy was 62% and the ADR, EUR155. In Benelux occupancy averaged 56% and daily rates, EUR136. In Central Europe occupancy was 53% and the ADR, EUR104. Lastly, in Latin America, occupancy and daily rates averaged 56% and EUR71, respectively.

About NH Hotel Group, part of Minor Hotels

NH Hotel Group (www.nhhotelgroup.com) is a consolidated multinational player and a benchmark urban hotel operator in Europe and the Americas, where it operates more than 350 establishments. Since 2019, it has been 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. Together they have articulated a portfolio of more than 500 hotels operating under 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.

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