Interim report January-March 2001

Interim report January-March 2001 www.scandic-hotels.com Quarterly summary · Income after net financial items rose by 29 per cent to SEK 84 million (65m). · Sales totalled SEK 1,622 million (1,270m), corresponding to an increase of 28 per cent compared with the same period last year. For comparable hotels and adjusted to take into account the effect of exchange rate movements, sales rose by 6 per cent. · Operating income rose by 37 amounted to SEK 81 million (59m), corresponding to an operating margin of 5.0 per cent (4.6%). · Earnings per share for the period amounted to SEK 0.92 (0.62). · Agreements have been signed for 4 new hotels with a total of 747 rooms. · After the end of the quarter, Hilton Group plc made a public offer for Scandic, the value of which corresponds to SEK 144 per Scandic share. Scandic's board of directors unanimously recommends its shareholders to accept the offer. All key ratios for 2000 have been restated to follow new accounting recommendations. Favourable market trends Market trends in most of the countries in which Scandic operates have remained positive. The only exceptions are Norway, where demand has continued to decline, even though the situation has varied considerably from region to region and city to city, the UK and Austria. Market conditions in the latter two countries have had a limited impact on Scandic, since the company only operates a few hotels there. In all other markets, demand has continued to improve, whilst capacity growth has remained low. Continued strong growth in sales and earnings The Group's sales for the first quarter totalled SEK 1,622 million (1,270m), corresponding to an increase of 28 per cent compared with the same period last year. This increase is an effect of continued positive market trends, and Scandic's capacity expansion, e.g. through its acquisition of the Swedish hotel chain Provobis. The Group's sales abroad also renders a higher value in Swedish currency, due to the weakening of the Swedish krona in 2001. For comparable hotels and adjusted to take into account the effect of exchange rate movements, sales rose by 6 per cent. Operating income rose by 37 per cent to SEK 81 million (59m). This corresponds to an operating margin of 5.0 per cent (4.6%). Operating income amounted to SEK 72 million (54m) for the Group's Nordic operations and SEK 9 million (5m) for its non-Nordic operations. Income after net financial items amounted to SEK 84 million (65m) for the first quarter. For comparable hotels, income after net financial items rose by 2 per cent compared with the previous year. These figures include Scandic's share in the associated company Pandox, SEK 12 million (8m). Scandic's operations - a good start to 2001. Scandic has enjoyed a good start to 2001 and preserved or increased market share in all markets where it has business operations. The sale of three of the Provobis hotels acquired has now been completed and the process of incorporating the remaining hotels into the chain and re- profiling them as Scandic hotels has proceeded according to plan. Occupancy levels for the Group rose by 1.4 percentage points to 59.2 per cent (57.8%). Average room rates rose to SEK 802 (736), resulting in an average revenue per available room (RevPAR) of SEK 475 (425), an increase of 12 per cent. Adjusted for exchange rate movements, RevPAR rose by 9 per cent. The Nordic region accounted for the strongest growth trend, despite the poor market climate in Norway. For Scandic's Nordic operations, occupancy levels rose by two percentage points to 59.8 per cent (57.8%), whilst the average room rate rose by 9 per cent to SEK 815 (749), corresponding to a 13 per cent increase in RevPAR to SEK 487 (433). Adjusted to take into account the effects of exchange rate movements, RevPAR for the Nordic region rose by 10 per cent. For non-Nordic operations, occupancy levels fell by 2.7 percentage points to 55.1 per cent (57.8%). The average room rate rose to SEK 710 (652), which resulted in a 4 per cent increase in RevPAR to SEK 391 (377). Adjusted to take into account the effect of exchange rate movements, the average room rate rose by 3 per cent, whilst RevPAR fell by 2 per cent. The slightly weaker performance reported by Scandic's non- Nordic operations is primarily attributable to market trends in the UK and Austria. Scandic signed agreements regarding a further three hotels during the first quarter of 2001 and an additional agreement following the end of the period. Two of these hotels are situated in Copenhagen and have a total of 487 rooms. The other hotels are in Vilnius in Lithuania (60 rooms) and Dresden in Germany (200 rooms). The hotel in Vilnius will open for business in May 2001, whilst the other properties, which are all still under construction, are expected to open for business at the end of 2002 or in early 2003. ------------------------------------------------------------ This information was brought to you by BIT http://www.bit.se The following files are available for download: http://www.bit.se/bitonline/2001/05/04/20010504BIT00470/bit0002.doc The full report http://www.bit.se/bitonline/2001/05/04/20010504BIT00470/bit0002.pdf The full report