Quarterly report for Q2 2021 ı Motel One Group

QUARTERLY REPORT FOR Q2 2021

KEY FACTS

Q2 2021:

• Motel One Cologne-Messe and Hamburg-Fleetinsel open | 02

• Social media campaign – travel like a local | 04

• Digital check-in pilot project | 04

• Second quarter determined by pandemic: | 05

- Occupancy reaches only 16% instead of 81% pre-Corona

- At EUR 29 million, sales remain 80% below pre-Corona levels

YTD 2021:

• The lockdown hast lasted more than 8 months, continues to cause

high losses despite corona aid: | 06

- Occupancy reaches only 12% instead of 75% pre-Corona

- At EUR 43 million, sales remain 84% below the pre-Corona level

- EBITDA slips into a minus of EUR 61 million

• Liquidity secured by KfW loans as a back-up | 07

• Outlook | 09

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MOTEL ONE COLOGNE-MESSE OPENS

Motel One opens its fourth hotel in this city on the banks of the Rhine. This new-build is at the

heart of the newly developed MesseCity district in Cologne’s Deutz borough, on the doorstep

of the trade fair grounds and a short walk from Cologne Cathedral. The seven-storey hotel

boasts 308 rooms, a lush green courtyard with an outdoor lounge, plus meeting rooms and co-

working spaces with interior design that reflects its media hub surroundings. Developer is a Joint

Venture from ECE and STRABAG. The pairing of classic and modern touches is a recurring

theme throughout the entire hotel – the furniture design, the colour palette, the patterns on the

wall and floor. One-off vintage finds, like historic TVs, rugs and sideboards from Germany’s mid-

century boom years, stand in contrast to modern media and cutting-edge designer pieces in a

range of ingenious applications. And the hotel’s special highlight? An unobstructed view of

Cologne Cathedral, which can be enjoyed from the One Lounge and individual rooms alike.

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MOTEL ONE HAMBURG-FLEETINSEL OPENS ITS DOORS

Motel One Hamburg-Fleetinsel is flanked by the Herrengrabenfleet and the Alsterfleet, enjoying

a waterside position that’s nevertheless at the heart of the city centre. The hotel is nestled

between the Elbphilharmonie and the Alster river, in a perfect spot for exploring the city. It has

441 rooms and 12 apartments. Investor is the Motel One Real Estate. The hotel’s interior design

brings together modern touches, a sense of wanderlust and a dash of nautical romance. The

entire hotel reflects Hamburg’s proud mercantile heritage. The co lour palette, the furniture

design, the decorative elements – there’s a nod to the ‘Speicherstadt’ warehouse district to be

found in every corner. There are two very special outdoor areas, too, with one side of the One

Lounge opening on to a covered terrace overlooking a ‘Fleet’, one of Hamburg’s distinctive

waterways. The outdoor lounge near the entrance is an oasis of lush greenery and comfy lounge

furniture – the perfect place to enjoy a relaxed drink.

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SOCIAL MEDIA CAMPAIGN – TRAVEL LIKE A LOCAL

After Motel One started a successful campaign last year,

which used road trip recommendations to encourage

people to holiday within their own country, it’s now time

for round two. The ‘Travel Like A Local’ campaign sees

bloggers show off their own cities and share ideas for a

city break in much-loved Motel One cities. But these ideas

aren’t a list of well-known sights, they’re genuine insider

tips. The unique mix offers culture aficionados a journey

of discovery into city life beyond the beaten path. Romina

kicked things off in June. From the Agnes district to the

Ehrenfelder Bahnhof and the Poller Wiesen, Cologne is

about much more than just its cathedral and carnival

season. Romina unveiled the lesser-known side of this major city, and revealed peaceful spots

where visitors can relax. Thanks to Motel One central location, it takes no time at all to get to all

the places she recommended.

Over the summer, an array of local insiders will be shedding new light on their cities – Vienna,

Cologne, Hamburg and Brussels. Plenty of ideas to make this year’s holiday just that bit

different. Follow the individual travel tips on Instagram (@motel_one) or on www.motel-one.com.

DIGITAL CHECK-IN PILOT PROJECT

Motel One has partnered with Germany’s Federal Government to launch the first pilot project

for a new digital identity ecosystem. The first phase allows business travellers from a select

group of companies to check into any Motel One in Germany using a smartphone app and QR

code. The aim is to digitise the check-in process and replace the paper registration form.

Significant components have already been

co-developed and the technical feasibility

proven. Business travellers can complete

the registration form automatically in the

app by scanning the QR code, using digital

proof of their billing address and a BASIS

ID, which enables seamless, secure and

verifiable exchange of information. The

process enables people to take control of

managing the verifications relating to them

and make their own decisions about

sharing them, with the ID wallet playing a

central role here.

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INCOME STATEMENT

2. Q ua rter 2021 :

The coronavirus pandemic continued to leave its mark on the second quarter of 2021.

Occupancy of just 16% (previous year: 12%) and revenue of EUR 29 million (previous year: EUR

21 million) led to Motel One recording negative EBIT for the fifth quarter in a row, at EUR 41

million (previous year: EUR -50 million). In 2019, EBIT was in the black, at EUR 37 million.

After the sector spent almost nine months in its second lockdown, there was a tangible uptick

in demand from mid-June onwards. However, city-based hotels had lost their core drivers of

trade fairs, congresses and other events, with the leisure sector also lacking the demand

provided by international travellers. The strong rebound of destinations with appeal to domestic

tourists, like Salzburg, Lübeck, Rostock and Freiburg, represent a glimmer of light.

With Covid support now paid out in the amount of EUR 55 million, with EUR 43 million of this

from November/December last year, the second quarter closed at EUR 12 million, after a loss

of EUR 52 million in the same quarter in the previous year.

+/- ly +/- ly +/- ly

Statistics:

No. Hotels 77 3 74 3 71 6

No. Rooms 21.847 996 20.851 694 20.157 2093

Occupancy (%) 16,2 4 11,8 -69 81,1 1

RevPOR (EUR) 91,6 -3 94,5 -5 99,0 4

Income Statement: kEUR % ly kEUR % ly kEUR % ly

Revenue 28.856 37 21.125 -86 147.221 18

EBITDAR 3.468 >100 739 -99 82.821 20

Lease payments -26.358 0 -26.449 -4 -25.511 -21

Heade Office & Pre-Opening -4.155 -40 -2.971 50 -5.923 11

EBITDA -27.045 -6 -28.681 <100 51.387 25

Amortisation/Depreciation -13.779 35 -21.118 -42 -14.829 8

EBIT -40.824 -18 -49.799 <100 36.558 47

COVID Subsidies 55.323 >100 0 0 0 0

Financial Results -2.641 2 -2.694 -35 -1.990 12

EBT 11.858 <100 -52.493 <100 34.568 53

Income tax 30 91 350 >100 -10.370 -53

NET RESULT 11.888 <100 -52.143 <100 24.198 53

2021 2020

2nd QuarterIncome Statement

2019

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YTD 2021 :

Looking at the cumulative data from the first six months of 2021 and comparing it to 2020 and

pre-pandemic 2019, the extent of the damage is clearly visible. While occupancy in the first six

months of 2019 was at 75%, travel restrictions which began in March 2020 resulted in a drop to

31% for 2020. Wide-reaching coronavirus restrictions from January to June 2021 resulted in an

occupancy of just 12%.

With revenue of just EUR 43 million (previous year: EUR 120 million) for the first six months of

the year, EBIT slumped by EUR 84 million (previous year: EUR 46 million). State Covid support

of EUR 57 million reduced the loss in the first half of the year to EUR 32 million (previous year:

EUR 51 million). After Covid aid, around EUR 82 million in losses were incurred in the two half-

year pandemic.

If the pre-Covid result for the first six months of 2019, with profit of EUR 37 million, is taken as

the baseline, the Covid-19 pandemic cost the company EUR 157 million in lost revenue for the

first six months of both years alone – even after taking Covid support into account.

2021 +/- ly 2020 +/- ly 2019 +/- ly

Statistics:

No. Hotels 77 3 74 3 71 6

No. Rooms 21.847 996 20.851 694 20.157 2.093

Occupancy (%) 12 -19 31 -44 75 1

RevPOR (EUR) 89 -12 102 4 98 4

Income Statement: kEUR % ly kEUR % ly kEUR % ly

Revenue 42.528 -64 119.710 -55 267.153 20

EBITDAR -1.228 <100 44.019 -69 144.195 22

Lease payments -52.136 1 -52.654 -6 -49.907 -20

Heade Office & Pre-Opening -7.544 -38 -5.464 52 -11.279 5

EBITDA -60.908 >100 -14.099 <100 83.009 28

Amortisation/Depreciation -23.387 27 -32.086 -22 -26.386 -4

EBIT -84.295 83 -46.185 <100 56.623 43

COVID Subsidies 57.073 >100 0 0 0 0

Financial Results -4.689 9 -5.141 -19 -4.326 -12

EBT -31.911 -38 -51.326 <100 52.297 47

Income tax -19 <100 0 >100 -15.689 -47

NET RESULT -31.930 -38 -51.326 <100 36.608 47

Year-to-Date January - JuneIncome Statement

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CASH FLOW STATEMENT

With negative EBITDA of EUR 61 million (previous year: EUR -14 million) in the first six months

of 2021, active working capital management and the hefty reduction in redesign CapEx limited

operating cash outflows to EUR 53 million.

Loans amounting to EUR 170 million, including the full amount of the KfW loan of EUR 162 million

that had been contractually fixed in the previous year, were taken out to provide protection

against the other risks posed by the crisis, going beyond the Covid support of EUR 57 mil lion.

After investment in new hotel projects, amounting to EUR 13 million in real estate and EUR 11

million in FF&E, cash holdings in the first six months of 2021 grew by EUR 149 million (previous

year: EUR 21 million). With cash holdings of EUR 312 million (previous year: EUR 204 million),

Motel One is not just on a sure footing, it is also in a position to make the most of any

opportunities for growth. However, the KfW loans must be repaid in full in just four years and

cause high interest expenses.

2021 2020

kEUR % ly kEUR % ly kEUR % ly

EBITDA reported -60.908 >100 -14.099 <100 83.009 28

- Net Working Capital 9.198 -92 121.120 64 73.742 >100

- ReDesign Capex -1.027 -95 -20.413 -7 -22.019 -21

- Taxes -19 <100 0 <100 -15.689 47

Operating Cash Flow -52.756 <100 86.608 -27 119.043 >100

- Covid Subsidies 57.073 >100 0 0,0 0 0

- Investing / Divesting Cash Flow 31 <100 -10.998 >100 0 0

- Equity Cash Flow -203 -97 -6.254 89,9 -3.293 <100

- Debt Cash Flow 169.647 <100 -27.222 <100 16.581 >100

Cash Flow before Expansion Capex 173.792 >100 42.134 -68 132.331 >100

- CAPEX new Hotels PROPCO -13.349 -20 -16.720 -59 -41.202 >100

- CAPEX new Hotels FF&E -11.412 >100 -3.977 -45 -7.217 -52

- Dividends 0 0 0 <100 -70.000 >100

Net Cash Flow 149.031 >100 21.437 54 13.912 >100

Cash carried forward 163.351 -11 182.894 56 117.509 0

Cash at end of period 312.382 53 204.331 55 131.421 15

Year-to-Date January - June

2019Cash Flow Statement

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NET BALANCE SHEET

Coronavirus-related losses reduced equity to EUR 431 million (previous year: EUR 487 million).

The equity ratio was 61% (previous year: 71%), remaining at a stable level, similar to the figure for

2019. Net debt rose to EUR 227 million (previous year: EUR 124 million).

PIPELINE REPORT

There are currently 77 (previous year: 74) hotels in operation with 21,847 rooms (previous year:

20,851). There are 26 (previous year: 27) hotels in development with 7,245 rooms (previous

year: 8,068). Overall, an increase to 103 hotels (previous year: 101) with 29,092 rooms (previous

year: 28,919) is secured.

Of these, 67 hotels (previous year: 68) are in Germany and 36 (previous year: 33) are in

European cities. 19 hotels are owned (previous year: 18), and 11 hotels (the same as the previous

year) are financed via a leasing structure. 73 hotels (previous year: 72) are being secured based

on long-term rental agreements with outside investors.

kEUR % kEUR % kEUR %

Net Balance Sheet:

Equity 431.333 61 487.149 71 453.143 60

Net working capital 44.553 6 79.409 11 76.627 10

Net debt 227.273 32 124.062 18 222.119 30

Leverage Framework:

EBITDA Rolling 12 months -89.350 78.852 168.445

Net Debt/EBITDA n.a. 1,6 1,3

20192021 2020

June 30,

Hotels Rooms % Hotels Rooms % Hotels Rooms %

in operation 77 21.847 75 74 20.851 72 71 20.157 71

under development 26 7.245 25 27 8.068 28 27 8.107 29

TOTAL 103 29.092 100 101 28.919 100 98 28.264 100

- Germany 67 19.462 67 68 19.575 68 67 19.226 68

- International 36 9.630 33 33 9.344 32 31 9.038 32

- Owned 19 5.597 19 18 5.442 19 22 6.177 22

- Leased 11 2.461 8 11 2.461 9 7 1.626 6

- Rented 73 21.034 72 72 21.016 73 69 20.461 72

2019

June 30,

2021 2020

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OUTLOOK

The restart in June showed a ray of hope with an occupancy rate of around 25%, which will now

continue in July with an expected 35%. Further positive signals are the first trade fairs with the

IAA and EXPO REAL in Munich. Although the incidences are rising again across Europe, there is

hope that the expected fourth corona wave will be milder due to the high vaccination rates and

the lower hospitalization rate. It should not then lead to a repeated lockdown for the industry.

Although we are prepared for all scenarios, we remain positive that society is succeeding in

solidarity in learning to live with the Covid-19 virus and its mutants.

Since June 2021, it has now been possible to submit extended applications for so-called bridging

aid III for companies particularly hard hit by the pandemic. Unfortunately, federal funding is

limited to a maximum of EUR 40 or 52 million and therefore does not do justice to the larger

companies in our industry. Incidentally, the corresponding EU regulation did not provide for this

limitation. DEHOGA is in talks with the ministries.

It remains a great challenge and a balancing act to manage the effects of the pandemic while

looking to the future.

In the third quarter, the Motel One Nuremberg-Hauptbahnhof, Stuttgart-Hauptbahnhof and

Aachen will go into operation, hopefully without further corona restrictions. These locations,

which were completed more than four years ago, will further enrich our network, especially at

the train stations, and thus also contribute to sustainable mobility.

A few days ago, we were able to sign a rental agreement for a Motel One in New York, Downtown

Manhattan, with Union Investment Real Estate and thus secured our market entry in the USA in

our dream destination New York. After an extensive redesign, the former Courtyard Hotel will

open in February 2022 at the latest with 326 rooms.

Munich, July 2021