2015 HALF YEAR RESULTS - Irasia

2015 HALF YEAR RESULTS

Mandarin Oriental Hotel Group

MANDARIN ORIENTAL

2015 Half Year Highlights

• Challenging conditions in a number of key markets

• Also impacted by renovations in Munich, New York and Kuala

Lumpur

• Acquisition of 50% interest in the iconic Hotel Ritz, Madrid

• New management contract for second hotel in Beijing

• New hotel opening in Milan

MANDARIN ORIENTAL

2015 Half Year Highlights

Rights Issue – April 2015

• US$316 million raised in a 1 for 4 rights issue

• Proceeds used to pay down debt and fund the Group’s 50% share

of the Madrid acquisition

MANDARIN ORIENTAL

2015 Half Year Results Highlights

US $ mJune

2015

June

2014

Combined Total Revenue 641 671

Underlying EBITDA 82 102

* 2014 included US$9 million of branding fees in relation to sales of The Residences at Mandarin Oriental, Bodrum

** US$5 million negative impact due to renovations, particularly in Munich

***

MANDARIN ORIENTAL


* 2015 results include US$1 million of transaction costs related to the Group’s acquisition in Madrid

US $ mJune

2015

June

2014

Underlying profit attributable to shareholders 33 46

Profit attributable to shareholders

including non-trading items*32 46

MANDARIN ORIENTAL


June

2015

June

2014

Underlying Earnings per Share (US ¢) 2.92 4.37

• Adjusted net asset value per share at 30th June 2015 was US$2.74. This compares to

US$3.02 at 31st December 2014*

• Interim dividend of US¢2.00 per share, unchanged from 2014

* 2014 underlying earnings per share, and adjusted net asset value per share, have been adjusted to

reflect the effect of the rights issue completed in April 2015

*

MANDARIN ORIENTAL

Key Strategic Objectives

• Strengthening our competitive position in all markets

• To be widely recognised as the world’s best luxury hotel group

• Operating at least 10,000 rooms worldwide

• Achieving a strong financial performance

MANDARIN ORIENTAL

Strengthening our Competitive Position

• Performance continues to reflect:

• strength of Mandarin Oriental brand internationally

• expertise of management teams

• experienced corporate organisation

MANDARIN ORIENTAL

0

100

200

300

400

500

600

Asia Europe Americas Total

20142015

208 182

-13%

554

473

308 309271 245

-15%

Strengthening our Competitive Position2015 Half-Year RevPAR Performance

US$

Includes only hotels that were operational in both years

0%-10%*

* Total RevPAR down by 5% in local currency terms

MANDARIN ORIENTAL

Strengthening our Competitive PositionASIA

2015 Half-Year RevPAR Performance

US$


0

50

100

150

200

250

2014 2015

208 182

-13%*

* Asia RevPAR down by 9% in local currency terms

• Softening demand in some key markets• Renovation in Kuala Lumpur

MANDARIN ORIENTAL

Hong Kong Market Overview

• Decline in visitor arrivals from the mainland

• Strong regional competition

• Oversupply in the 3 to 4 star segment led to aggressive discounting

MANDARIN ORIENTAL

Mandarin Oriental, Hong Kong

(100% ownership)

• Citywide decline in demand

• Occupancy at 67% (70% in 2014)

• RevPAR down 10%

• Food & Beverage revenues remained

resilient


MANDARIN ORIENTAL,

HONG KONG

Forbes ‘Five Star’ Awards

Hotel 5 stars

Spa 5 stars

Pierre 5 stars

Mandarin Grill 5 stars

The Krug Room 5 stars

Total 25 stars

Only city hotel in the world

MANDARIN ORIENTAL,

HONG KONG

Michelin Stars

Pierre 2 stars

Man Wah 1 star

Mandarin Grill 1 star

MANDARIN ORIENTAL

The Landmark Mandarin Oriental, Hong Kong

(Management contract)

• Maintained competitive position

• Decline in visitor arrivals

• RevPAR down 12%

• Amber – 2 Michelin Stars

• Featured in San Pellegrino ‘World’s 50 Best

Restaurants’

• Only Hong Kong restaurant to be listed


MANDARIN ORIENTAL

The Excelsior, Hong Kong

(100% ownership)

• Impacted by reduced travel from China

• Oversupply in competitive set

• RevPAR down 23%

• Voted ‘Best Company to Work For’ in

Hong Kong HR Asia Awards 2015


MANDARIN ORIENTAL

Mandarin Oriental, Tokyo

(Long-term lease)

• Continued recovery in visitor arrivals

• RevPAR up 25% in local currency terms

• Improved competitive position

• Only hotel in Japan to receive Forbes ‘Five

Star’ listing for hotel and spa


MANDARIN ORIENTAL

Mandarin Oriental, Bangkok

(44.9% ownership)

• Benefited from increased visitor arrivals


• Remains market leader

• Only hotel in Bangkok to receive Forbes

‘Five Star’ listing for hotel and spa

• Listed in Robb Report as one of ‘World’s

Top 100 Hotels’


MANDARIN ORIENTAL


(44.9% ownership)

• Comprehensive renovation of Authors’ and

Garden wings underway

• Significant enhancements to guest facilities

• Designed to restore hotel to its historic

splendour

• Completion by November 2015


MANDARIN ORIENTAL

Mandarin Oriental, Singapore

(50% ownership)

• Affected by softer citywide demand

• RevPAR down 12% in local currency terms

• Maintained its competitive position

• Retained Forbes ‘Five Star’ status for both

hotel and spa for fourth consecutive year


MANDARIN ORIENTAL

Mandarin Oriental, Jakarta

(96.9% ownership)

• Improved its competitive position



MANDARIN ORIENTAL

Other Hotels

• Recently opened hotels in Guangzhou,

Shanghai and Taipei performed well against

competition

• Improved RevPAR performances


MANDARIN ORIENTAL

Strengthening our Competitive PositionEUROPE


US$


0

100

200

300

400

500

600

2014 2015

-15%*554

473

* RevPAR declined by 1% in local currency terms; up 2% without Munich renovation

MANDARIN ORIENTAL


Mandarin Oriental Hyde Park, London

(100% ownership)

• Strong leisure demand



MANDARIN ORIENTAL



(100% ownership)

• Award-winning restaurants attract strong

following

• Daniel Boulud at Bar Boulud

• Heston Blumenthal at Dinner

• Dinner is No. 7 in ‘World’s 50 Best

Restaurants 2015’

MANDARIN ORIENTAL



(100% ownership)

• Full scale renovation announced in March

2015

• Investment of £85 million

• To position the hotel as one of the world’s

best

• Renovation to begin in 2016 for 18 months

• Hotel will remain open

MANDARIN ORIENTAL


Mandarin Oriental, Munich

(100% ownership)

• Maintained position as market leader

• Renovation impacted leisure demand


MANDARIN ORIENTAL

Mandarin Oriental, Munich

(100% ownership)

• Renovation will complete later this year

• New lobby lounge, bar and banquet rooms

• New signature restaurant featuring award-

winning cuisine of celebrity chef Nobu

Matsuhisa


MANDARIN ORIENTAL

Mandarin Oriental, Geneva

(92.6% ownership)


• Challenging local conditions




‘Best Hotel in Geneva’

Institutional Investor

‘Most Welcoming Luxury City Hotel’

Swiss Tourism Board

MANDARIN ORIENTAL

Mandarin Oriental, Paris

(100% ownership)

• Average rate of over €1,000

• Terrorist attacks impacted citywide

demand




MANDARIN ORIENTAL, PARIS

‘Palace’ Hotel Status

Condé Nast Traveler, US‘Gold List’

TripAdvisor ‘Traveler’s Choice’

MANDARIN ORIENTAL, PARIS

Sur Mesure

2 Michelin Stars

MANDARIN ORIENTAL


Other Hotels

• Impacted by strength of US dollar

• Maintained competitive positions

• Barcelona and Bodrum hotels are

undisputed market leaders

Mandarin Oriental, Barcelona

Travel + Leisure, US ‘ World’s Best Hotels’ 2015

Mandarin Oriental, Bodrum

Tatler ‘Spa Awards’ 2015

MANDARIN ORIENTAL

Strengthening our Competitive PositionTHE AMERICAS


US$


0

100

200

300

2014 2015

308 309

0%*

• Positive trading conditions

* Up 6% without New York renovation

MANDARIN ORIENTAL


Mandarin Oriental, Washington D.C.

(80% ownership)

• Increased corporate and group demand

• RevPAR up 11%

MANDARIN ORIENTAL

Mandarin Oriental, New York

(25% ownership)

• Performed well in highly competitive market

• Occupancy impacted by suite renovation

• RevPAR down 13%


MANDARIN ORIENTAL, NEW YORK

Forbes‘Five Star Hotel’

‘Five Star Spa’

American Automobile

Association (AAA)‘Five Diamond Hotel’



MANDARIN ORIENTAL

Mandarin Oriental, Miami

(25% ownership)


• RevPAR up 9%


MANDARIN ORIENTAL, MIAMI

Forbes Triple ‘Five Star’

• Hotel

• Spa

• Azul Restaurant

American Automobile

Association (AAA)‘Five Diamond Hotel’

MANDARIN ORIENTAL

Other Hotels

• Improved RevPAR performances


MANDARIN ORIENTAL






MANDARIN ORIENTAL

To be widely recognised as the world’s best

luxury hotel group

• Award winning hotels at top of their markets

• Attracting individuals who pay a premium for luxury experiences

• Over 45% of Group’s business is leisure – higher spending

demographic

MANDARIN ORIENTAL

Core Brand Attributes

• Creative hotel design, architecture and technology

• Innovative dining

• Holistic spas

• Underpinned by legendary service

To be widely recognised as the world’s best luxury

hotel group

MANDARIN ORIENTAL

CREATIVE DESIGN, ARCHITECTURE & TECHNOLOGY

• Partnerships with internationally acclaimed architects and designers

• Collection of unique hotels – embracing local culture

‘Urbanist Standout’

Condé Nast Traveler, US Hot List 2015

Mandarin Oriental, Taipei

‘Beachside Escape’

Condé Nast Traveler, US Hot List 2015

Mandarin Oriental, Bodrum

MANDARIN ORIENTAL

INNOVATIVE DINING

• Sophisticated restaurants and bars with award-winning cuisine

MANDARIN ORIENTAL

Michelin Star Status11 restaurants with 16 stars

More than any other hotel group


Pierre (Two stars);

Man Wah; Mandarin Grill+Bar

The Landmark Mandarin Oriental,

Hong Kong

Amber (Two stars)


Signature; Sense;

Tapas Molecular Bar


Moments (Two stars)


Dinner (Two stars)


Rasoi by Vineet

Mandarin Oriental, Paris

Sur Mesure (Two stars)

MANDARIN ORIENTAL

2015 San Pellegrino Award

• Dinner by Heston Blumenthal


• Amber


MANDARIN ORIENTAL

Innovative Dining

CELEBRITY CHEFS

• Continued partnerships with renowned

international chefs

• Development of home-grown talent

MANDARIN ORIENTAL

HOLISTIC SPAS

• Combining Asian philosophies with western techniques

Forbes ‘Five Star Spas’




Mandarin Oriental, Macau


Mandarin Oriental Pudong, Shanghai



Mandarin Oriental, Boston

Mandarin Oriental, Las Vegas



12 Five Star Spas

More than any other hotel group

LEGENDARY SERVICE

MANDARIN ORIENTAL

Corporate Responsibility

• Annual Sustainability Report

• Local community engagement

• Reducing our environmental impact

through energy efficiency

MANDARIN ORIENTAL

To be widely recognised as the world’s best luxury

hotel groupInternational Advertising Campaign

• 28 celebrity fans endorse our brand

• Latest fans:

• Award-winning French actress, Isabelle Huppert

• Chinese actor and singer, Chen Kun

• Fans add support to openings, events and digital

marketing

MANDARIN ORIENTAL

Investments in Digital Marketing

• Global conversation with consumers

• Strong presence in social media including

• Facebook

• Twitter

• Instagram

• Sina Weibo

• Followers increased by 30% over the same

period in 2014

MANDARIN ORIENTAL

Investments in Digital Marketing

Website Marketing

• Bespoke social platform ‘Fans of MO’

launched in March

• Website traffic increased by 4% over the

same period in 2014

• Bookings via mandarinoriental.com are

13% of total transient revenue

Travel + Leisure, US

The World’s Best Hotels 2015

9 Mandarin Oriental hotels ranked














Mandarin Oriental, Kuala Lumpur



Mandarin Oriental, Prague


Robb Report

The World’s Top 100 Hotels 2015

9 Mandarin Oriental hotels ranked

Forbes Five Star Awards

11 Mandarin Oriental hotels achieved ‘Five Star’ ranking




Mandarin Oriental, Macau

Mandarin Oriental Pudong, Shanghai







MANDARIN ORIENTAL






MANDARIN ORIENTAL

• 8,000 rooms in 28 hotels

• 17 hotels under development

• Total portfolio, including hotels under development:

• 11,000 rooms

• 45 hotels

• 24 countries

Towards 10,000 rooms

MANDARIN ORIENTAL

GEOGRAPHIC DIVERSIFICATION

New York

Madrid

Las Vegas

Miami

Atlanta

Boston

Washington DC

London

Paris

Barcelona

Munich

Prague

Geneva

Tokyo

Shanghai

GuangzhouHong Kong

MacauManila

Sanya

Bangkok

Kuala LumpurSingapore

Jakarta

28 HOTELS OPEN

17 HOTELS UNDER DEVELOPMENT

Grand CaymanDellis Cay

Costa Rica

Taipei

MilanMarbella

Marrakech

Istanbul

Doha

Bodrum

Maldives

Chengdu

Beijing

Abu Dhabi

Bali

ShenzhenChongqing

Dubai

MANDARIN ORIENTAL

Mandarin Oriental, Milan

(Management contract) Opened 30 July 2015

• Ideally located on prestigious Via Monte di

Pieta

• Housed in redevelopment of four elegant

18th Century buildings

• Classic and contemporary interiors

• 104 guestrooms and suites

• A variety of restaurants and bars, a spa and

two stylish open courtyards






MANDARIN ORIENTAL

Hotel Ritz, Madrid

(50% ownership)

• Hotel Ritz, Madrid jointly acquired in

May for €130 million

• 50:50 joint venture with Saudi Arabian

based Olayan Group

• 167 guestrooms

• A comprehensive renovation planned in

2017. Estimated to cost €90 million

• The Group’s total investment including

acquisition, renovation and transaction

expenses estimated at €111 million


MANDARIN ORIENTAL

Mandarin Oriental Wangfujing, Beijing

(Management contract) Opening 2017

• Second luxury hotel in Beijing

• 74 guestrooms

• Located on top two floors of premier mixed

use centre WF CENTRAL

• Developed by an affiliated company of

Hongkong Land

• Outstanding views of Forbidden City

• Extensive mix of restaurants, bars and spa

and wellness


MANDARIN ORIENTAL

Mandarin Oriental, Beijing

(Management contract) Opening 2017

• Group’s first announced project in the

capital

• 241-rooms within the iconic CCTV

project

• Both hotels expected to open within

months of each other

• Enhance the brand’s growing reputation on

the mainland


MANDARIN ORIENTAL

• Two hotels to open in the next 18 months:

• Marrakech, Morocco

• Doha, Qatar


MANDARIN ORIENTAL

Mandarin Oriental, Marrakech

(Management contract) Opening 3rd quarter 2015

• Exclusive hideaway resort

• 63 private villas and suites

• Set within 50 acres of landscaped grounds


MANDARIN ORIENTAL

Mandarin Oriental, Doha

(Management contract) Opening 2nd half 2016

• First Mandarin Oriental in Middle East

• A new city centre development

• 158 guestrooms and 91 serviced

apartments


MANDARIN ORIENTAL

• 15 Residences around the world

• Provide one-off branding fees and

ongoing management fees

Residences at Mandarin Oriental

MANDARIN ORIENTAL

• Strong balance sheet for selective investment opportunities

• Brand strength increases opportunities for long-term management

contracts

• Strategy of ownership and management at the core of our business

• Continual review of development opportunities in key destinations

Development Strategy

FINANCIAL REVIEW

MANDARIN ORIENTAL

US $ mJune

2015

June

2014

Operating Activities

Underlying EBITDA from subsidiaries 69 87

Financial Review

• 2014 – Underlying EBITDA, excluding US$9 million of branding fees from sales of

Bodrum Residences, was US$78 million

Summary Cash Flow Statement

MANDARIN ORIENTAL

Financial ReviewSummary Cash Flow Statement

• Weighted average interest rate at 2.0% on Group borrowings (2.0% in 2014)

• Underlying EBITDA net interest cover was 9.5 times (10.9 times in 2014)

US $ mJune

2015

June

2014


EBITDA from subsidiaries 69 87

Dividends from associates 4 5

Net interest paid (6) (11)

Tax paid (5) (9)

Other (principally working capital) (16) (15)

Total 46 57

MANDARIN ORIENTAL


US $ mJune

2015

June

2014

Investing Activities

Madrid acquisition (73) -

Munich expansion - (17)

Capital expenditure at existing hotels (14) (15)

Others (1) (1)

Total (88) (33)

MANDARIN ORIENTAL

US $ mJune

2015

June

2014


Investing Activities

Financing Activities

Issue of shares

Net (repayment)/drawdown of borrowings

Dividends paid

Other

Net decrease in cash

Opening cash balance 1st Jan

Effect of exchange rate changes

Closing cash balance 30th Jun

46

(88)

316

(261)

(50)

(1)

(38)

324

(5)

281

57

(33)

-

6

(50)

-

(20)

316

1

297


MANDARIN ORIENTAL

June

2015

Dec

2014

Net debt (US$ million) 164 403

Adjusted shareholders’ funds (US$ million) 3,436 3,152

Gearing 5% 13%

Financial Review

MANDARIN ORIENTAL

Financial ReviewFuture Significant Capital Commitments, as previously announced

Local

CurrencyUS$ Timing

London renovation £85m 134m 2016-17

Madrid renovation (Group’s 50% share) €45m 50m 2017-18

Munich extension* €112m 125m 2017-20

Total 309m

• Projects will be funded through the use of an appropriate mix of external debt and Group cash reserves

* Excludes US$17 million already spent up to 30th June 2015

MANDARIN ORIENTAL

• Approximately 57% of Group’s debt hedged

• Average tenor of Group’s borrowings is 4.1 years

• US$281 million of cash and US$142 million of undrawn

committed facilities

Financial Review

MANDARIN ORIENTAL

• Dependent on global economy with challenging conditions in

some key markets

• Group remains in a strong competitive position

• Over the longer term:

• Limited new supply in key markets

• Continued global expansion of the brand

• New business from traditional and emerging markets

Outlook

THANK YOU

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2015 HALF YEAR RESULTS - Irasia

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