Half Year 2019 Results Delivering Performance and Growth

 
Half Year 2019 Results Delivering Performance and Growth
Half Year 2019 Results
Delivering Performance and Growth
Half Year 2019 Results Delivering Performance and Growth
Contents

      Group Update                                                                                                     slide 3

      H1 2019 Financial Performance                                                                                    slide 7

      Driving Portfolio Growth                                                                                       slide 16

      Strategic Priorities                                                                                           slide 22

      Outlook for Remainder of 2019                                                                                  slide 24

      Appendices                                                                                                     slide 25

      Impact of IFRS 16                                                                                              slide 30

DISCLAIMER
The presentation contains forward-looking statements. These statements have been made by the Directors in good faith based on the
information available to them up to the time of their approval of this presentation.
Due to inherent uncertainties, including both economic and business risk factors underlying such forward-looking information, actual
results may differ materially from those expressed or implied by these forward-looking statements. The Directors undertake no
obligation to update any forward-looking statements contained in this presentation, whether as a result of new information, future
events or otherwise.

Half Year Results
30 June 2019
Slide |    2
Half Year 2019 Results Delivering Performance and Growth
Clayton Hotel Charlemont, Dublin

Group Update
Slide | 3
Half Year 2019 Results Delivering Performance and Growth
Track Record
Exceptional Growth, Asset Backed & Appropriate Gearing

                            Exceptional growth*                                          Asset backed                  Net Debt to Adjusted EBITDA*

                                                                                                               1,335
Adjusted EBITDA* €million

                                                      60

                                                            Hotel assets €million
                                                 51                                                        1,117                                2.8x
                                            45                                                                            2.6x          2.5x
                                      35                                                             828
                                                                                               732                               1.9x
                                 24                                                      583

                            2                                                       24

                                                                                                                                        * Pre IFRS 16

                                                                                    Growth Strategy
                                                   Exploit identified growth opportunity in the UK
                                           Continue to seek suitable opportunities for new hotels in Dublin

                                                                                           Funding
                                Primarily leased model but also opportunistic acquisitions within gearing guidance

    Half Year Results
    30 June 2019
    Slide |                      4
Half Year 2019 Results Delivering Performance and Growth
Strong Financial Metrics – H1 2019
                            Post IFRS 16                    Pre IFRS 16
                         H1 2019    Growth           H1 2019             Growth
 Revenue                 €201.9m    +12.2%          €201.9m               +12.2%
 EBITDAR margin           40.4%     +40 bps            40.4%             +40 bps
 Adjusted EBITDA1        €73.4m     +43.9%           €60.3m               +18.1%
 Profit before tax       €37.8m      +6.7%           €42.2m               +19.3%
                          17.2                         19.3
 Adjusted basic EPS1                 -3.4%                                 +8.4%
                          cents                        cents

       €45.1m in cash
                         Normalised Return
        generated for                               Dividend per share
                            on Invested
      investment, debt                                  of 3.5 cent
                              Capital1
       repayments and                                    (+16.7%)
                             of 12.6%
          dividends1
                                              1   Refer to glossary at end of presentation

Half Year Results
30 June 2019
Slide |   5
Half Year 2019 Results Delivering Performance and Growth
Growing revenues and margins

    Owned and leased hotels                  Share of revenue                     Share of EBITDA

                                                 23%                                  21%
           11
                     16
                                                                                  12%
                                              19%              58%
               13                                                                                  67%

                                    9,0461 rooms at 30 June 2019
  H1 2019                              Dublin                  Regional Ireland             United Kingdom
  RevPAR growth                         -0.5%                         +0.3%                      +3.2%
  Revenue growth                        +9.8%                         +7.5%                     +22.8%
  EBITDAR margin                        47.2%                         24.5%                      36.2%
  Dalata rooms                          4,478                         1,867                      2,445
                      1   Includes 256 rooms under management contracts which are not included in the region splits

                                    Dublin             Regional Ireland             UK

 Half Year Results
 30 June 2019
 Slide |   6
Half Year 2019 Results Delivering Performance and Growth
Maldron Hotel South Mall, Cork

H1 2019 FINANCIAL PERFORMANCE
Slide | 7
Half Year 2019 Results Delivering Performance and Growth
Group Profit or Loss
                                  H1 2019       H1 2019       H1      Strong revenue growth of 12.2% with ‘like for like’ Group
Key Financials €million                                               RevPAR up 0.7%
                                Post IFRS 16   Pre IFRS 16   20181
Revenue                            201.9         201.9       180.0    Segments EBITDAR margin increased from 40.0% to 40.4%
Segments EBITDAR                   81.5           81.5       72.1
                                                                      Decrease in central costs due to a write back of a prior
Hotel rent                         (3.6)         (16.6)      (16.2)   period insurance provision following a detailed review of
Central costs                      (3.7)          (3.8)      (4.4)    claims history and timing of spend

Share-based payments                                                  Adjusting items to EBITDA includes a net gain on
                                   (1.4)          (1.4)      (1.2)
expense                                                               revaluation of certain property assets €1.0m (H1 2018: net
Other income                        0.6            0.6        0.7     loss of €1.6m) reduced by pre-opening costs

Adjusted EBITDA                    73.4           60.3       51.0     Depreciation of PPE increased by €3.6m due to the
                                                                      opening of five new “owned” hotels, the completion of
Adjusting items to EBITDA           0.8            0.8       (2.3)
                                                                      four extensions and the ongoing refurbishment programme
Group EBITDA                       74.2           61.1       48.7
                                                                      Finance costs increased by €2.0m due to the additional
Depreciation of PPE                (12.9)        (12.9)      (9.3)    interest on the new debt drawn to fund the acquisition of
Depreciation of RoU assets         (8.2)            -          -      Clayton Hotel City of London and a reduction in
                                                                      capitalised interest following the completion of the new
Finance costs                      (6.0)          (6.0)      (4.0)    hotels
Interest on lease liabilities      (9.3)            -          -      ‘Like for like’ Group KPIs              H1 2019         H1 2018
Profit before tax                  37.8           42.2       35.4     Occupancy                                 81.3%           81.0%
Profit after tax                   32.7           36.5       30.5     Average room rate (€)                    107.82          107.39
Basic EPS (cent)                   17.7           19.8       16.6     RevPAR (€)                                87.62           87.00
Adjusted basic EPS (cent)          17.2           19.3       17.8
                                                                                 1   Prior period comparatives have been amended - refer
                                                                                                        to glossary at end of presentation

       Half Year Results
       30 June 2019
       Slide |      8
Half Year 2019 Results Delivering Performance and Growth
Market Review | Dublin
                    Savills Ireland forecast additional
                                                                                          STR Global forecast for Dublin
                     6,300 rooms from 2019 to 2021
                                                                                          2018        2019         2020            2021
     2,000                                                                    Dublin
                                        1,700                                             Actual     Forecast     Forecast        Forecast
     1,750
     1,500                                                                    Occupancy    83.7%       82.4%       80.2%            79.4%
     1,250        1,100                                               1,000
                                                             900              ARR          145.1       143.9       145.2            146.7
     1,000                                                         800
       750                                                                    RevPAR       121.5       118.6       116.4            116.5
       500                                            400
                      200
       250                    100               100                           RevPAR %
                                                                                           7.1%        (2.4%)      (1.8%)           0.1%
                                                                              Variance
        -
 Circa 900            2019                     2020                2021                                         Source: STR Global August 2019
 opened to
date in 2019                        3/4 Star     Budget     Apartments

               Total market size of circa 21,300 rooms
               RevPAR for Dublin market declined by 1.4% in H1 2019 driven by a combination of the 4.5% VAT increase, new
               supply per above and a reduction in the number of events in the city
               July & August negatively impacted by (i) reduced number of events and (ii) the VAT increase
               Outlook remains positive for market
                     Irish economy forecasted to continue strong growth per Central Bank: 2019 ~ 4.9%; 2020 ~ 4.1%
                     6% increase in passenger numbers at Dublin Airport in H1 2019
                     Strong visitor numbers – increase of 5.7% for Q1 2019 per CSO

          Half Year Results
          30 June 2019
          Slide |         9
Half Year 2019 Results Delivering Performance and Growth
Dublin | Strong Growth in Revenues and Margins
                                                    30 June                           H1 2019             H1 2018
                 RevPAR Change                      Number of hotels2                     16                  15
                                                    Number of rooms                     4,478               4,146
            Dalata          Market
            -0.5%                                   All figures €million              H1 2019            H1 20183
                                                    Total revenue                       117.7               107.2
                             -1.4%
                                                    EBITDAR                             55.6                 49.8
            Source: Dalata and STR                  EBITDAR margin                      47.2%               46.5%

                                                    Like for Like KPIs1              H1 2019              H1 2018
   Large increase in revenue of 9.8%                Occupancy                          85.5%                85.4%
   New hotels and extensions performing very        Average room rate (€)              124.71              125.49
   well                                             RevPAR (€)                         106.57              107.13
   ‘Like for like’ RevPAR change outperformed
                                                1  KPIs exclude the new hotels which opened during 2018 (Maldron Hotel
                                                Kevin Street and Clayton Hotel Charlemont) and the Tara Towers Hotel
   the market                                   which closed in September 2018. To achieve an accurate like for like
                                                comparison we have also excluded (i) Clayton Hotel Dublin Airport and
   Significant uplift in EBITDAR margin to      Maldron Hotel Parnell Square due to the significant extensions completed
                                                during 2018 (ii) Clayton Hotel Burlington Road due to the significant
   47.2%                                        refurbishment works ongoing at the hotel and (iii) Clayton Hotel Liffey
                                                Valley due to the significant acquisition of rooms during the period July
                                                2018 - June 2019
                                                2 10 owned hotels and 6 leased hotels at 30 June 2019
                                                3 Prior period comparatives and the KPIs calculated thereon have been

                                                restated to exclude pre-opening costs as they are now presented as an
                                                adjusting item to EBITDA. See glossary for more information.

  Half Year Results
  30 June 2019
  Slide |   10
Regional Ireland | Revenue and Margins Growing

                      RevPAR Change                         30 June                             H1 2019            H1 2018
                           2.6%
                                                     0.3%   Number of hotels2                       13                 12

      -1.4%                                                 Number of rooms                       1,867              1,706
                                             -1.9%
              -4.4%
                                                            All figures €million               H1 2019            H1 20183
                                -11.6%
            Cork             Galway           Limerick      Total revenue                         38.5               35.8
                         Dalata     Market                  EBITDAR                                9.4                8.6
                   Source: Dalata and Trending.ie
                                                            EBITDAR margin                       24.5%              24.1%

     Revenue up 7.5%                                        Like for Like KPIs1                 H1 2019            H1 2018
     Maldron Hotel South Mall, Cork performing              Occupancy                             71.8%              71.7%
     very well since opening in December 2018               Average room rate (€)                 92.41              92.31
     4.5% VAT increase has had a negative impact
                                                            RevPAR (€)                            66.32              66.15
     on Regional Ireland market
                                                            1  KPIs exclude the new Maldron Hotel South Mall which opened in
     Dalata performing strongly versus market on            December 2018 and Maldron Hotel Sandy Road which had a large
                                                            extension added during 2018
     a ‘like for like’ basis                                2 12 owned hotels and 1 leased hotel at 30 June 2019
                                                            3 Prior period comparatives and the KPIs calculated thereon have been

     EBITDAR margin increased to 24.5%                      restated to exclude pre-opening costs as they are now presented as an
                                                            adjusting item to EBITDA. See glossary for more information.

  Half Year Results
  30 June 2019
  Slide |     11
Dalata’s Clear Competitive Advantage in UK

            Large structural opportunity exists in the 3 & 4 star segments
Shortage of large                 Fragmented                    Older room                Lack of investment in
 hotel operators                    market                         stock                       employees
  International brands       Market is very fragmented in     Over 40% of the rooms       Difficult for smaller operators or
    have evolved to a       terms of brand, operators and     are over 40 years old     larger Third Party Operators (TPOs)
franchise model leaving                 owners                                          to provide same level of training or
a shortage of operators                                                                  opportunity due to lack of tenure
     with any scale                                                                         (TPOs) or scale (independent
                                                                                                      operators)

                                   The Difference with Dalata
                             Allows us to outperform in Regional UK
                                                                 Financial
                               Quality of our                  resources &                    Depth of hotel
 Location of our                  assets –                   ability to secure             operational expertise
     assets                   modern and fresh                      sites                      & resources
   Focused on large UK       New and recently refurbished      Strong balance sheet       Operate a decentralised model.
cities with strong mix of       hotels can significantly     with attractive covenant        Strong focus on training &
  corporate and leisure     outperform the older and tired    for developers & fixed      development at all levels. Highly
  guests. Less downside      competition. Average age of         income investors          motivated management teams
risk compared to smaller       our UK hotels is 10 years                                  that are part of a large, growing
   cities in regional UK                                                                            hotel group

  Half Year Results
  30 June 2019
  Slide |    12
UK | Proving our UK Model

                                 RevPAR Change                                         30 June                           H1 2019          H1 2018
                                                                                       Number of hotels2                     11                9
 London       Manchester Birmingham             Cardiff     Leeds          Belfast
               7.6%       8.2%                                                         Number of rooms                     2,445             1,968
       5.0%          4.5%                                  4.5%
2.5%
                                     1.1%                         1.1%
                                                                                       All figures £million              H1 2019          H1 20183
                                                   -0.8%                               Total revenue                        39.9             32.5
                                              -2.0%
                                                                          -6.5%        EBITDAR                              14.4             12.0
                                                                                       EBITDAR margin                      36.2%             36.8%
                                     Dalata     Market                        -15.4%
       Source: Dalata and STR
                                                                                       Like for Like KPIs1               H1 2019           H1 2018
                                                                                       Occupancy                           83.6%             83.1%
        Total revenue up 22.8%
                                                                                       Average room rate (£)               82.45             80.38
        New      hotels         in   Belfast,     London     and         Newcastle
        performing to expectations                                                     RevPAR (£)                          68.92             66.76

        Significant RevPAR outperformance in most UK cities                            1 KPIs exclude the new Maldron Hotel Belfast City and Maldron Hotel
                                                                                       Newcastle which opened in 2018 and Clayton Hotel City of London
        EBITDAR margin decreased due to impact of new                                  which opened in January 2019
                                                                                       2 8 owned hotels and 3 leased hotels at 30 June 2019

        openings. ‘Like for like’ EBITDAR margin increased from                        3 Prior period comparatives and the KPIs calculated thereon have

                                                                                       been restated to exclude pre-opening costs as they are now
        37.6% to 38.4%                                                                 presented as an adjusting item to EBITDA. See glossary for more
                                                                                       information.

       Half Year Results
       30 June 2019
       Slide |    13
Balance Sheet | Lowly Geared and Asset
Backed
                                           30 June 2019          30 June 2019               31 Dec
 All figures €million                                                                                     Strong balance sheet with an attractive
                                            Post IFRS 16           Pre IFRS 16               2018
 Non-current assets                                                                                       covenant to secure future leases.
    Property, plant and
                                                    1,334.5              1,334.5           1,176.3
    equipment
                                                                                                                Over €1.3 billion of prime hotel assets
    Right-of-use assets                               338.8                      -                  -
                                                                                                                Further upward property revaluation
    Other non-current assets1                          52.6                  78.2              82.4
                                                                                                                of €46.3 million
 Current assets
                                                                                                                Pre IFRS 16 Net Debt to Adjusted
    Trade and other
                                                       33.7                  38.4              24.5             EBITDA of 2.8x (post IFRS 16: 4.3x)
    receivables and inventory
    Cash                                               45.9                  45.9              35.9             Debt and Lease Service Cover3 of 3.1x
 Total assets                                      1,805.5              1,497.0           1,319.1               Extended the maturity date of our
 Equity                                               957.7                961.5              902.6             debt facility by 12 months – now
 Bank loans                                           397.2                397.2              301.9             expiring October 2024
 Lease liabilities                                    314.1                      -                  -
 Trade and other payables                              75.6                  77.2              65.2
 Other liabilities2                                    60.9                  61.1              49.4
 Total equity and liabilities                      1,805.5              1,497.0           1,319.1

1. Other assets includes intangible assets, goodwill, deferred tax assets, investment property, contract fulfilment costs and other receivables
2. Other liabilities includes deferred tax liabilities, derivatives, provision for liabilities and current tax liabilities
3. Refer to glossary at end of presentation

          Half Year Results
          30 June 2019
          Slide |    14
Strong Cash Flow to Fund Pipeline and
Further Growth
    All figures €million                                                                           H1 2019               H1 2018
    Net cash from operating activities (excluding tax)                                                 76.1                  46.7
    Tax paid                                                                                           (4.9)                 (3.4)
    Fixed rent paid1                                                                                  (12.8)                    -
    Interest and finance costs paid                                                                    (5.2)                 (4.7)
    Refurbishment capital expenditure                                                                  (8.1)                 (7.2)
    Cash generated for investment, debt repayments and dividends                                       45.1                  31.4
1Under IFRS 16, fixed rent is no longer included in operating activities, therefore we have included the amount paid as a separate item.
For the comparative period the fixed rent expense is included in net cash from operating activities.

       In H1 2019 the Group generated €45.1 million which together with an increase in debt allowed us to
       fund acquisitions and development while staying within our gearing limits
       Proposed 2019 interim dividend of 3.5 cent per share
       Refurbishment capital expenditure is calculated as 4% of revenue for the period

Half Year Results
30 June 2019
Slide |    15
DRIVING PORTFOLIO GROWTH
Slide | 16
Our Compelling Growth Story
   5.8 times increase in                                 20 fold increase in                                 Number of owned and
    revenue in 5 years                                   Basic EPS in 5 years                                   leased rooms
                                                        Cent                                        12,000                                 11,189
  million                                                                       19.8
                                                        20.0                                                                  8,790
                           201.9
   €210                                                                                               8,000
                                                        15.0

   €140
                                                        10.0
                                                                                                      4,000
                                                                                                                    2,236
    €70                                                  5.0
               35.0
                                                                     1.0
                                                                                                             0
      €0                                                 0.0
                                                                                                                  H1 2014 H1 2019 FY 2022
            H1 2014 H1 2019                                      H1 2014 H1 2019                                                           Estimated
                                                                              Pre IFRS 16

  At Jan 2014                                                                                                               At June 2019
  €5.0m                                         €1.3bn growth in hotel assets                                                    €1.3bn*

                                                                                            Development          Net revaluation uplift,
                                 Acquisition of hotels and
                                                                                             expenditure,               €319.0m
                                     sites, €943.8m
                                                                                            €182.2 million              28% uplift

 *Includes net additional decrease of €115.5m due to depreciation, disposals and foreign currency movements, partially offset by maintenance capex

 Half Year Results
 30 June 2019
 Slide |     17
Growth Momentum

                                                                                           Impact of new rooms on geographical mix
                        Opening 2,400 new rooms between now and 2022
                                                                                               June 2019               Early 2022
                       4,000
Number of new rooms

                       3,500
                       3,000                                                                  28%
                                                                                                                       39%      44%
                       2,500                                                                          51%
                                                                                               21%
                       2,000                                                                                              17%
                       1,500
                       1,000                                                                     Dublin      Regional Ireland    UK

                         500
                                                                                            Impact of new rooms on ownership mix
                            0
                                  2018      2019       2020       2021      2022               June 2019                Early 2022

                           2018
                           2019: 1 hotel in London                                             27%
                           2020: 1 Dublin hotel                                                                         39%
                           2021: 6 UK hotels in Glasgow (x2), Manchester (x2), Bristol &                                        61%
                           Birmingham. Extension to Clayton Hotel Birmingham. 1                      73%
                           Dublin hotel
                           2022: 1 hotel in London. Extension to Clayton Hotel Cardiff
                           Lane, Dublin
                                                                                                           Owned      Leased

                      Half Year Results
                      30 June 2019
                      Slide |   18
First Maldron Hotel in London
   Acquired a site with planning approval for a new hotel for £32.05 million

   Maldron Hotel Shoreditch London will have 130 to 140 rooms with a restaurant and bar

   Total cost of developing the hotel will be circa £60 million including site cost

   Site purchase funded by debt; development cost funded from operating cash flows

   Expected to open early 2022

 Excellent central location
     on Paul Street in
        Shoreditch.

 Area benefits from strong
 demand from corporate
 and leisure guests and is
     well-serviced by
      transport links.

 Half Year Results
 30 June 2019
 Slide |   19
Creating Shareholder Value
                                  Clayton Hotel Chiswick, London
          February 2015                               2015 - 2017                            July 2018 –
                                                                                             June 2019
 Acquired hotel as part of the     Added extension with 92 bedrooms and conference and     Occupancy of 86.4%
 wider acquisition of the Moran     banqueting facilities to accommodate 400 delegates.    Revenue of £11.0m
     Bewley's Hotel Group.         Refurbished the ground floor with new restaurant, bar    EBITDA of £5.2m
  Original cost of £47 million      and reception area. Total investment of £14 million.

                    £9.3 MILLION UPLIFT IN VALUATON SINCE ACQUISITION

Half Year Results
30 June 2019
Slide |   20
Creating Shareholder Value

                      Maldron Hotel Kevin Street, Dublin
          June 2016          July 2016 – July 2018      July 2018 – June 2019
 Site purchased for €8.1m    New 137 room hotel built      Revenue of €7.2m
  located in the centre of          for €15m                EBITDA of €3.5m
          the city              (€170k per room)

                    75% UPLIFT IN VALUE TO €40.7m
Half Year Results
30 June 2019
Slide |   21
Maldron Hotel Newcastle

STRATEGIC PRIORITIES
Slide | 22
Strategic Priorities | Difference with Dalata

                         Driving shareholder returns
                 Our Customers                    Our Brands
                 Listening to their
                                                       Independent
                 feedback. Continuously
                                                         and fresh.
                 enhancing our product
                 and service.

                 Our Growth                        Our People

                 Continued growth         Grow and trust your own.
                 of room
                 numbers in                All new hotels opened by
                 Dublin and UK.                 internally developed
                                                management teams.
                 Primarily leased                Continuous focus on
                 model but also           training and development
                 opportunistic                          at all levels.
                 acquisitions.

  Half Year Results
  30 June 2019
  Slide |   23
Outlook for Remainder of 2019
     Very strong trade at our UK hotels in July and August. Positive outlook for the balance of the year despite
     the ongoing uncertainty surrounding the timing and nature of Brexit

     RevPAR in our Dublin hotels in July and August was behind last year primarily due to (i) weaker calendar
     of events compared to 2018 and (ii) ongoing impact of the VAT increase

     RevPAR in our Regional Ireland hotels was also behind last year in July and August primarily due to the
     more significant impact of the VAT increase on domestic leisure demand than anticipated

     Outlook for the balance of the year looks positive in both Dublin and Regional Ireland with a stronger
     calendar of events and the return of corporate guests after the summer period. Some of our Dublin
     hotels are forecasting September to deliver highest ever monthly room revenue for their properties

     Very happy with the performance of the hotels opened and extensions completed in 2018 and early 2019.
     They will continue to make a very significant contribution to earnings growth in the second half of the
     year

     Continue to work closely with developers and fixed income investors on opportunities to further increase
     our very attractive pipeline in Dublin and the UK. Expect to make further announcements in 2019

Half Year Results
30 June 2019
Slide |   24
Maldron Hotel South Mall, Cork

APPENDICES
Slide | 25
Current Pipeline – Circa 2,400 new rooms
             Republic of Ireland                                UK
                   1 new owned hotel                                 6 new leased hotels
                   1 new leased hotel                                1 new owned hotel
                   1 extension to existing hotel                     1 extension to existing hotel
                   437 rooms                                         1,962 rooms
                                                           Owned              Planning     Construction Estimated
           Property                       New Extension             Rooms
                                                          or leased           Granted        started    Completion
       The Samuel*                          x              Leased    204           x               x           Q4 2020
       Maldron Hotel Merrion Road           x              Owned     140           x               x           Q1 2021
Dublin Clayton Hotel Cardiff Lane:
                                                                                   x                           Q3 2021
       - New conference center                     x       Owned      93
                                                                                   x                           Q2 2022
       - Additional rooms**

           Clayton Hotel Birmingham                x       Leased     44           x               x           Q1 2021
           Maldron Hotel Glasgow*           x              Leased    301           x               x           Q1 2021
           Clayton Hotel Bristol*           x              Leased    252           x               x           Q2 2021
           Clayton Hotel Manchester*        x              Leased    329           x               x           Q2 2021
 UK        Clayton Hotel Glasgow*           x              Leased    300           x               x           Q2 2021
           Maldron Hotel Manchester*        x              Leased    278           x                           Q3 2021
           Maldron Hotel Birmingham*        x              Leased    325           x                           Q4 2021
           Maldron Hotel Shoreditch
                                            x              Owned     133           x                           Q1 2022
           London
                                                                                                   *35 year operating lease
                                                                               ** Contingent on obtaining vacant possession

 Half Year Results
 30 June 2019
 Slide |     26
Adjusted EBITDA bridge
                                                                  Dublin                                                  Regional Ireland                                             UK

                                                  Rooms added

                                                                                             performance

                                                                                                                                               performance

                                                                                                                                                                                                     performance
                                                                 Tara Towers

                                                                                                                                                                                                                                                 IFRS 16 Adj9
                                                                                             Like for like

                                                                                                                                               Like for like

                                                                                                                                                                                                     Like for like
                                New hotels2

                                                                                                                                                                   New hotels7
                                                                               renovation4

                                                                                                             New Hotel5

                                                                                                                              Extension6
                                                                                Hotel with
                                                   at existing

                                                                                                                                                                                     FX impact
                                                                                                                                                                                                                                      H1 2019

                                                                   closure
                                                     hotels3

                                                                                                                                                                                                                         Other8
                     H1                                                                                                                                                                                                                                              H1
€million                                                                                                                                                                                                                              pre IFRS
                    20181                                                                                                                                                                                                                                           2019
                                                                                                                                                                                                                                         16

Revenue               180.0           8.2               6.0       (1.8)         (1.6)         (0.3)             2.6              0.4                   (0.3)          7.3              0.3                  1.1                   -      201.9                  -    201.9
Segments
                       72.1           3.6               3.6       (0.6)         (1.1)             0.3           0.7              0.3                   (0.2)          2.1              0.1                  0.6                   -       81.5                  -     81.5
EBITDAR
Rent                 (16.2)                   -            -              -             -         0.6                     -                -                   -   (1.0)                         -                   -            -     (16.6)   13.0                 (3.6)
Segments
                      55.9            3.6               3.6       (0.6)         (1.1)             0.9           0.7              0.3                   (0.2)          1.1              0.1                  0.6                   -       64.9   13.0                 77.9
EBITDA
Other income            0.7                   -            -              -             -               -                 -                -                   -                 -               -                   -   (0.1)             0.6          -               0.6
Central costs         (4.4)                   -            -              -             -               -                 -                -                   -                 -               -                   -     0.6           (3.8)        0.1             (3.7)
Share-based
payments              (1.2)                   -            -              -             -               -                 -                -                   -                 -               -                   -   (0.2)           (1.4)                  -     (1.4)
expense
Adjusted
                      51.0            3.6               3.6       (0.6)         (1.1)             0.9           0.7              0.3                   (0.2)          1.1              0.1                  0.6            0.3            60.3   13.1                 73.4
EBITDA
Segments
EBITDAR               40.0%                                                                                                                                                                                                             40.4%                        40.4%
margin
1.Prior period comparatives have been restated to reflect (i) the reclassification of pre-opening costs from Segments EBITDAR to ‘Adjusting items to EBITDA’ following the decision
made in December 2018 to show pre-opening costs as an adjusting item as they distort comparability ‘period on period’ and with similar businesses and (ii) the reclass of income
from managed hotels from revenue to other income in the period ended 30 June 2019
2. Includes Maldron Hotel Kevin Street which opened in July 2018 and Clayton Hotel Charlemont which opened in November 2018
3. Includes Clayton Hotel Dublin Airport, Clayton Hotel Ballsbridge and Maldron Hotel Parnell Square where we completed extensions during 2018 and Clayton Hotel Liffey Valley
where we acquired 70 rooms since June 2018
4. Clayton Hotel Burlington Road is currently undergoing extensive renovation works
5. Maldron Hotel South Mall, Cork opened in December 2018
6. Maldron Hotel Sandy Road, Galway completed its extension in June 2018
7. Includes Maldron Hotel Belfast City which opened in March 2018, Maldron Hotel Newcastle which opened in December 2018 and Clayton Hotel City of London which opened in
January 2019
8. Group income and expenses includes income from management contracts, rental income, central costs and the share-based payments expense
9. Includes the impact of IFRS 16 where fixed rental expenses are now excluded from profit or loss and replaced with finance costs on the lease liabilities and depreciation of the
right-of-use assets

            Half Year Results
            30 June 2019
            Slide |      27
Market Review | Regional Ireland and
United Kingdom
                      Regional Ireland                                     United Kingdom
RevPAR Growth           2017        2018    H1 2019   RevPAR Growth          2017          2018      H1 2019

Cork                    13.6%       10.0%    (4.4%)   London                 4.4%          3.1%        5.0%
Galway                  7.6%         7.0%   (11.6%)   Manchester             0.9%      (0.3%)          4.5%
Limerick                13.2%        3.8%     0.3%    Birmingham             2.3%          5.0%        1.1%
Source: Trending.ie                                   Cardiff                8.0%          0.9%       (0.8%)
                                                      Leeds                 (0.7%)         0.6%        1.1%
                                                      Belfast               16.8%      (6.3%)         (15.4%)
        Strong RevPAR growth in all three cities
                                                      Source: STR
        in 2017 and 2018
        Negative variances in H1 2019 driven by             London performing strongly
        a variety of factors                                Cardiff is impacted by less events in the city
        No increases in supply and very little              in 2019 versus 2018
        supply in the immediate pipeline in                 Belfast   is   impacted   by     the   significant
        Galway and Limerick. Maldron Hotel                  increase in supply
        South Mall opened in Cork in December               Other regional cities performing relatively
        2018                                                well

Half Year Results
30 June 2019
Slide |     28
Hotel Portfolio at September 2019
            30 owned                                     10 leased                               9 new hotels                            3 management
           hotels with                                  hotels with                               in pipeline                             agreements
          6,406 rooms                                  2,384 rooms                               2,399 rooms                             with 256 rooms
            Clayton Hotel Portfolio in Ireland                          Maldron Hotel Portfolio in Ireland                             UK Hotel Portfolio
           Owned Hotels / Freehold Equivalent                          Owned Hotels / Freehold Equivalent                       Owned Hotels / Freehold Equivalent
Hotel                                                 Rooms    Hotel                                         Rooms    Hotel                                             Rooms
Clayton Hotel Dublin Airport                             608   Maldron Hotel Newlands Cross, Dublin             297   Clayton Hotel Manchester Airport (4)                 365
Clayton Hotel Leopardstown, Dublin                       357   Maldron Hotel Parnell Square, Dublin             182   Clayton Hotel Leeds                                  334
Clayton Hotel Ballsbridge, Dublin                        335   Maldron Hotel Sandy Road, Galway                 165   Maldron Hotel Belfast City                           237
Clayton Hotel Liffey Valley, Dublin (1)                  336   Maldron Hotel South Mall, Cork City              163   Clayton Hotel Chiswick, London                       227
Clayton Hotel Cardiff Lane, Dublin (2)                   304                                                          Clayton Hotel City of London                         212
                                                               Maldron Hotel Limerick                           142
Clayton Hotel Cork City (3)                              201                                                          Clayton Hotel Belfast                                170
                                                               Maldron Hotel Kevin Street, Dublin               137
Clayton Hotel Galway                                     195                                                          Clayton Crown Hotel, London                          152
                                                               Maldron Hotel Pearse Street, Dublin              119
Clayton Hotel Charlemont, Dublin                         187                                                          Maldron Hotel Derry                                   93
                                                               Maldron Hotel Wexford                            108                          Leased hotels
Clayton Hotel Sligo                                      162
Clayton Whites Hotel, Wexford                            160   Maldron Hotel Shandon, Cork City                 101   Maldron Hotel Newcastle                             265
Clayton Hotel Limerick                                   158   Maldron Hotel Portlaoise                          90   Clayton Hotel Cardiff, Wales                        216
Clayton Hotel Silver Springs, Cork                       109                       Leased hotels                      Clayton Hotel Birmingham                            174
                    Leased hotels                              Maldron Hotel Dublin Airport                    251    Total UK rooms                                    2,445
Clayton Hotel Burlington Road, Dublin                   502    Maldron Hotel Tallaght, Dublin                  119                             Pipeline
Ballsbridge Hotel, Dublin                               400    Maldron Hotel Oranmore Galway                   113                              Owned
The Gibson Hotel, Dublin                                252    Maldron Hotel Smithfield, Dublin                 92    Maldron Hotel Merrion Road, Dublin                  140
Total Clayton rooms in Ireland                        4,266    Total Maldron rooms in Ireland                2,079    Extension at Clayton Hotel Cardiff Lane, Dublin      93
(1)   Remaining 25 rooms owned by third parties                                                                       Maldron Hotel Shoreditch London                     133
(2)   Dalata own 264 rooms and lease 40 rooms                                                                                                  Leased
(3)   Dalata own 194 rooms and lease 7 apartments                                                                     Extension at Clayton Hotel Birmingham                44
(4)   Effective ownership of hotel on 99 year lease                                                                   Maldron Hotel, Birmingham                           325
                                                                                                                      Clayton Hotel, Manchester                           329
                                                                                                                      Maldron Hotel, Glasgow                              301
                                                                                                                      Clayton Hotel, Glasgow                              300
                                                                                                                      Maldron Hotel, Manchester                           278
                                                                                                                      Clayton Hotel, Bristol                              252
                                                                                                                      The Samuel, Dublin                                  204
                                                                                                                      Total pipeline rooms                              2,399

         Half Year Results
         30 June 2019
         Slide |      29
Clayton Hotel Burlington Road, Dublin

IMPACT OF IFRS 16
Slide | 30
Adoption of IFRS 16

     Adoption of IFRS 16 resulting in:
               Balance Sheet now includes right-of-use (RoU) assets and liabilities to pay rental expenses
               Fixed rental expenses replaced with finance costs on the lease liabilities and depreciation of the
               RoU assets

     Dalata has adopted the modified retrospective approach and therefore have not restated prior period
     comparatives

     The Group’s weighted average discount rate is 6.03% - marginally higher than the discount rate of 5%
     previously estimated

  IFRS 16 is having no impact on our strategy, no impact on commercial negotiations for
  leases and no impact on bank covenants as they are calculated based on frozen GAAP.
   There will be a minor impact on cash flows due to the positive cash benefit from the
                               treatment of IFRS 16 by UK tax authorities.

Half Year Results
30 June 2019
Slide |   31
Impact of IFRS 16 on Financials

                                      Profit
                                                   Basic
                                    after tax
                                                    EPS
    P&L                             decreases
                                                decreases
                        Adjusted        by
  Impact                                            by
                          EBITDA       €3.8
   for H1               increases    million
                                                 2.1 cent
    2019                 by €13.1
                          million

 Balance                                        Net Debt
                           Debt
                                    RoU asset        to
  Sheet                 increases
                                       of        Adjusted
Impact at                   by
                                     €338.8     EBITDA up
                          €314.1
 30 June                 million
                                     million    from 2.8x
  2019                                            to 4.3x

    Half Year Results
    30 June 2019
    Slide |   32
Lease profile
    As the Group has entered into most of its leases relatively recently, there are significant unexpired terms.
    This means the impact of front loading finance costs under IFRS 16 is more pronounced compared to
    companies with a more mature lease portfolio.

    Lease liabilities are 11.7x operating rent but this multiple is influenced by the Ballsbridge Hotel lease due
    to its significant rental charge and short lease term. Excluding the Ballsbridge Hotel the multiple is 12.8x

                                            Maturity profile of lease liabilities of €314.1m
                              €160m
                              €140m
          Lease liabilities

                              €120m
                              €100m
                               €80m
                               €60m
                               €40m
                               €20m
                                €0m
                                      0-5        6-10     11-15    16-20    21-25     26-30    30-35   > 35
                                                                  Years to maturity

Half Year Results
30 June 2019
Slide |               33
Unwind of existing lease liabilities and
existing RoU assets

    The existing lease liabilities and existing RoU assets as at 30 June 2019 will unwind to profit or loss over
    the next 5 years as follows:

    €’million                                            2019     2020      2021      2022      2023

    Interest on lease liabilities*                       18.5      18.1      17.8      17.4      16.9

    Depreciation of RoU assets*                          16.5      15.1      14.6      14.6      14.5

    * Note the actual depreciation and interest charge through profit or loss will depend on the
    composition of the Group’s lease portfolio in future years and is subject to change driven by:
    (i) commencement of new leases; (ii) modifications of existing leases; (iii) reassessments of
    lease liabilities following periodic rent reviews; and (iv) impairments of right-of-use assets. See
    note 13 to the condensed interim financial statements for the six month period ending 30 June
    2019 for further information, including the split between Euro and GBP.

Half Year Results
30 June 2019
Slide |   34
Impact of IFRS 16 on H1 2019

                                                                       IFRS 16 Impact
                                               H1                          Include
                                                        Exclude                                            H1 2019         Net
Key Financials                       H1       2019                   depreciation of RoU      Taxation
                                                         fixed                                             reported     IFRS 16
€million                            2018       pre                   assets and interest       impact
                                                          rent                                              results      impact
                                             IFRS 16                  on lease liabilities
Revenue                             180.0     201.9         -                  -                  -          201.9         -
Segments EBITDAR                    72.1      81.5          -                  -                  -              81.5      -
Rent                               (16.2)    (16.6)       13.0                 -                  -          (3.6)       13.0
Other central income/costs1         (4.9)     (4.6)        0.1                 -                  -          (4.5)        0.1
Adjusted EBITDA                     51.0      60.3        13.1                 -                  -              73.4    13.1
Adjusting items to EBITDA           (2.3)      0.8          -                  -                  -              0.8       -
Group EBITDA                        48.7      61.1        13.1                 -                  -              74.2    13.1
Depreciation                        (9.3)    (12.9)         -                (8.2)                -          (21.1)      (8.2)
Net finance costs                   (4.0)     (6.0)         -                (9.3)                -          (15.3)      (9.3)
Profit before tax                   35.4      42.2        13.1              (17.5)                -              37.8    (4.4)
Profit after tax                    30.5      36.5        13.1              (17.5)               0.6             32.7    (3.8)
1   Other income/costs includes central costs, share-based payments expense, rental income and management fees

      Half Year Results
      30 June 2019
      Slide |   35
Impact of IFRS 16 on gearing
at 30 June 2019
                                                       IFRS 16 Impact

                                                  Addition of     Remove
30 June 2019                      Pre IFRS 16                                Post IFRS 16
                                                  lease debt       rent
Net debt                            355.1m          314.1m            -        669.2m

Denominator: Earnings for the
                                    128.8m             -           26.0m       154.8m
period July 2018 – June 2019
Net Debt to Adjusted EBITDA           2.8x             -              -         4.3x

Debt and Lease Service Cover          3.1x             -              -         3.1x

     IFRS 16 has no impact on our ability to pay rent and service our debt

Half Year Results
30 June 2019
Slide |   36
Accounting for new leases – Sample lease
Sample UK Rental Opportunity with 300 rooms                  Over the lease term, the asset and liability will differ
CPI-linked rental uplifts                                    in value
Lease term                              35 years             RoU asset depreciates evenly over the lease term
                                                             Lease liability decreases by the cash rental payments
Rental charge per annum                  £2.3m               net of the interest charge (which reduces over time –
(payable quarterly in advance)
                                                             similar to a mortgage)
Hotel opening date                      Jan 2021             Sample lease assumes collar of 1% compounded
                                                             annual increase payable every 60 months
RoU asset on 1 Jan 2021                  £35.8m              Assumes no initial direct costs capitalised
Lease liability on 1 Jan 2021            £35.8m              Depreciation of RoU asset in year one amounts to
                                                             £1.0 million and interest on the lease liability in year
UK discount rate                          6.49%              one amounts to £2.3 million
                                 35 year lease with index linked rental reviews
 £36m
 £32m                                                                               RoU Asset     Lease Liability
 £28m
 £24m
 £20m
 £16m
 £12m
  £8m
  £4m
  £0m

  Half Year Results
  30 June 2019
  Slide |     37
P&L Impact of IFRS 16 – Sample lease
                                     35 year lease with index linked rental reviews
 £3.2m
 £3.0m
 £2.8m
 £2.6m
 £2.4m
 £2.2m
 £2.0m
 £1.8m
 £1.6m
 £1.4m
 £1.2m                                                                                                                 EPS
 £1.0m                                                                                                              enhancing
 £0.8m                                                                                                              at end of
                                                                                                                      lease
 £0.6m
 £0.4m
 £0.2m
 £0.0m
-£0.2m
-£0.4m    EPS dilutive at beginning of lease                           Cross over point is 2041
-£0.6m                                                                  20 years into the lease
-£0.8m
-£1.0m

                Depreciation              Interest    Rent       PBT Effect (rent versus interest & depreciation)

    Half Year Results
    30 June 2019
    Slide |   38
Multiples will change over the sample
lease term
                              Lease liability: fixed rent charge
€36.0m                                                                             17.0x

€32.0m                                                                             15.0x

€28.0m                                                                             13.0x

€24.0m                                                                             11.0x

€20.0m                                                                             9.0x

€16.0m                                                                             7.0x

€12.0m                                                                             5.0x

 €8.0m                                                                             3.0x

 €4.0m                                                                             1.0x

 €0.0m                                                                             -1.0x

                       Lease Liability (LHS)   Rent (LHS)   Lease multiple (RHS)

   Half Year Results
   30 June 2019
   Slide |   39
Glossary
                                   The pre IFRS 16 numbers and KPIs calculated thereon are prepared using the previous accounting treatment for
Pre IFRS 16 numbers                leases (IAS 17) and are disclosed to provide more clarity to the reader on how the Group has performed in
                                   comparison to the prior period.
                                   EBITDA adjusted to show the underlying operating performance of the Group and excludes items which are not
Adjusted EBITDA                    reflective of normal trading activities or distort comparability either ‘period on period’ or with other similar
                                   businesses. In H1 2019 the adjusting items include revaluation movements and hotel pre-opening expenses.
Adjusted basic earnings per
                                   EPS excluding the tax adjusted effects of the adjusting items to EBITDA referred to above.
share (EPS)
Cash generated for                 Net cash from operating activities (after tax), less amounts paid for interest, finance costs and refurbishment capital
investment, debt                   expenditure. In H1 2019, fixed rent paid is also deducted as the amount is no longer reflected in net cash from
repayments and dividends           operating activities.
Refurbishment capital              The Group typically allocates 4% of annual revenue to refurbishment capital expenditure to ensure the portfolio
expenditure                        remains fresh for its customers and adheres to brand standards.
Net Debt to Adjusted EBITDA        Loans and borrowings (gross of unamortised debt costs) less cash divided by Adjusted EBITDA.
Debt and Lease Service             Cash generated for investment, debt repayments and dividends before rent, interest and finance costs divided by the
Cover                              total amount paid in rent, interest and finance costs on loans and borrowings.
Return on Invested Capital         Adjusted EBIT including fixed rent divided by the average net assets, after deducting the accumulated revaluation
                                   gains included in property, plant and equipment and adding back net debt, derivative financial instruments and
                                   taxation related balances. The accounting estimate for right-of-use assets and lease liabilities are also excluded
                                   from net assets.
Normalised Return on               Adjusted EBIT excluding the results from recently completed hotels divided by the average invested capital excluding
Invested Capital                   the cost of assets under construction at period end and the cost of new hotels which only recently commenced
                                   trading and have not yet reached full operating performance.
Prior period comparatives          Prior period comparatives have been restated to reflect (i) the reclassification of hotel pre-opening costs from
                                   Segments EBITDAR to ‘Adjusting items to EBITDA’ following the decision made in December 2018 to show pre-
                                   opening costs as an adjusting item as they distort comparability ‘period on period’ and with similar businesses and
                                   (ii) the reclassification of income from managed hotels from revenue to other income in the period ended 30 June
                                   2019. Prior period KPIs for the period ended 30 June 2018 have been restated for these reclassifications.

For further information refer to the Supplementary Financial Information contained within the announcement of results for the six months ended 30 June 2019 which
provides definitions and reconciliations of our Alternative Performance Measures (“APM”) and other definitions.

Half Year Results
30 June 2019
Slide |    40
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