LVMH reaches an agreement with Belmond - to increase its presence in the ultimate hospitality world
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LVMH reaches an agreement with Belmond
to increase its presence
in the ultimate hospitality world
DECEMBER 14, 2018
DISCLAIMER 2
This document may contain certain forward looking statements which are based on estimations and forecasts. By their nature, these forward
looking statements are subject to important risks and uncertainties and factors beyond our control or ability to predict, in particular those
described in LVMH’s Reference Document which is available on the website (www.lvmh.com). These forward looking statements should not be
considered as a guarantee of future performance, the actual results could differ materially from those expressed or implied by them. The
forward looking statements only reflect LVMH’s views as of the date of this document, and LVMH does not undertake to revise or update these
forward looking statements. The forward looking statements should be used with caution and circumspection and in no event can LVMH and
its Management be held responsible for any investment or other decision based upon such statements. The information in this document does
not constitute an offer to sell or an invitation to buy shares in LVMH or an invitation or inducement to engage in any other investment activities.
LVMH AGREEMENT WITH BELMOND 3
BELMOND: THE ULTIMATE TRAVEL CONNOISSEUR
CREATING EXCEPTIONAL EXPERIENCES WORLDWIDE
| Founded in 1976 and formerly named Orient Express Hotels, the Belmond Group is a luxury hotel
and travel operator listed on the New York Stock Exchange
| Operating in 24 countries, Belmond has interests in 46 hospitality offerings
which all have a unique and distinctive brand identity
HOTELS TRAINS, CRUISES & OTHERS
(most of them entirely owned, real estate + management)
33 Hotels
3 Safari camps 7 Trains
1 Restaurant 2 Cruises
Properties include
Hotel Cipriani; Hotel Caruso; Grand Hotel Europe; Operations include
Grand Hotel Timeo; Copacabana Palace; Hotel Trains: Venice Simplon‐Orient‐Express; Belmond British
Splendido, Le Manoir aux Quat'Saisons; Maroma Pullman; Belmond Royal Scotsman; Belmond Grand
Resort & Spa in Mexico; Hotel das Cataratas, etc. Hibernian; Eastern & Oriental Express; Peru Belmond
Andean Explorer, etc.
Opening in first half 2019
Cruises: Belmond Afloat in France; Belmond Road to
Belmond Cadogan Hotel, London Mandalay
87% of 2017 revenue & 78% of 2017 EBITDA
13% of 2017 revenue & 22% of 2017 EBITDA
LVMH AGREEMENT WITH BELMOND 4
BELMOND: A GLOBAL FOOTPRINT WITH A STRONG FOCUS IN EUROPE
REVENUE BREAKDOWN BY REGION
In % of total revenue – 9 months 2018
46%
EUROPE
(excl. France)
20%
NORTH AMERICA
15%
TRAINS &
CRUISES
19%
REST OF THE
WORLD
LVMH AGREEMENT WITH BELMOND 5
ICONIC, IRREPLACEABLE PORTFOLIO OF TROPHY ASSETS
HOTELS TRAINS & CRUISES
33 hotels in EMEA, North America, Asia and 4 owned trains across Europe, 2 Belmond
South America branded luxury trains in Peru through a JV, 1 JV
luxury train in Southeast Asia and 2 owned river
City landmarks such as Hotel Cipriani, Hotel
cruises
Splendido, Grand Hotel Europe and
Copacabana Place Trains provide an outstanding platform to
Rejuvenating sanctuaries & natural wonders establish the Belmond brand in new markets
such as Hotel das Cataratas and Sanctuary No other luxury hospitality company with such an
Lodge extensive portfolio of owned one-of-a-kind assets
Heritage palaces such as Hotel Monasterio
Best-in-class capabilities to manage trains & river
and Villa San Michele
cruises
Owned Iconic ‘21’ Club restaurant in New York Unrivalled development opportunities leveraging
Belmond’s portfolio and management
3 luxury safari lodges in Bostwana
capabilities
LVMH AGREEMENT WITH BELMOND 6
BELMOND KEY FIGURES Adjusted EBITDA
by region
% of total – 9 months to Sept. 2018
JV Income
Management Fees 9%
| 3,100 hotel rooms ; 62 % occupancy rate YTD Sept. 2018 Owned Trains
8%
Europe
7%
& Cruises
9% 51%
Rest of World
| YTD Sept. 2018: ADR = US$ 563 ; RevPAR = US$ 347 16%
North America
| 12 months Revenue to end Sept. 2018 = US$ 572 million
Global customer base
% of total – 2017 Guest origin (1)
(1) Calculated using room nights
sold for the year
| 12 months Adjusted EBITDA to end Sept. 2018 = US$ 140 million
ended December 31, 2017
at owned, part-owned,
and managed hotels
Africa / Middle East
Asia
3%
South America 8%
| Ratio Adjusted EBITDA to revenue = 24 % 9%
North America
48%
UK & Ireland 13%
20%
Europe
(ex. UK & Ireland)
LVMH AGREEMENT WITH BELMOND 7 KEY STRENGTHS AND GROWTH OPPORTUNITIES STRENGTHS | Iconic and legendary assets all around the world | Ownership of the real estate | Reach critical mass in the ultimate luxury hotel world with one single acquisition | Globally-diverse, highly refined customer base | Recognized brand and ideal complement to the Cheval Blanc maisons | Seasoned management team with deep industry knowledge OPPORTUNITIES | Asian and Middle East clientele underpenetrated | Strong Hotel Management Agreements opportunities | Complements other LVMH Group’s activities | Implementation of yield management enabling better RevPar levels; strong bookings already in place LVMH AGREEMENT WITH BELMOND 8 BELMOND, AN IDEAL COMPLEMENT TO CHEVAL BLANC MAISONS Maintain two distinctive brands with different resonance: | The Belmond brand synonymous with history, heritage and timeless experiences such as: • Adventures and natural wonders (e.g. Cataratas, Machu Picchu) • Cultural hubs (e.g. Portofino, Cipriani, Copacabana) • Rejuvenating sanctuaries (e.g. Cap Juluca, La Residence d’Angkor) • Unforgettable journeys (e.g. Venice Simplon-Orient-Express) | Cheval Blanc synonymous with ultimate luxury, service, architecture and unique gastronomy
LVMH AGREEMENT WITH BELMOND 9
TRANSACTION DESCRIPTION
AT A GLANCE
| Definitive agreement for the acquisition of Belmond Ltd (NYSE: BEL)
| LVMH proposes $25 per share to acquire Class A shares of Belmond Ltd
• Equity value of $2.6 billion
• 100% Enterprise value of $3.2 billion
| Next steps
• Transaction subject to the approval of Belmond Ltd.’s shareholders
and the clearance by the relevant competition authorities
Belmond shareholder approval expected in Q1 2019
Clearance of anti-trust expected mid-2019
• Closing of the transaction expected after anti-trust clearances
LVMH AGREEMENT WITH BELMOND 10
TRANSACTION FINANCING AND IMPACT ON LVMH
| Total equity value of the transaction: $ 2.6 billion
| Limited impact on LVMH’s debt profile
| 2018 EPS accretion before synergies: estimated 0.1%LVMH AGREEMENT WITH BELMOND 11 CONCLUSION | Unique collection of exceptional hotel and luxury travel adventures in some of the world’s most inspiring destinations | Complementary to our own Cheval Blanc maisons and Bvlgari hotel activity | Opportunity to significantly increase LVMH’s presence in the ultimate hospitality world
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