Dalata Hotel Group PLC: 2022 Preliminary Financial Results

Growing Sustainably

Revenue from hotel operations[i] exceeds €0.5 billion

ISE: DHG   LSE: DAL

Dublin and London | 28 February 2023: Dalata Hotel Group plc (‘Dalata’ or the ‘Group’), the largest hotel operator in Ireland, with a growing presence in the United Kingdom and continental Europe, announces its results for the year ended 31 December 2022.

A RECORD OPERATING PERFORMANCE

• Revenue from hotel operations[i] of €515.7 million (+20% on 2019) and Adjusted EBITDA[i] of €183.4 million (+13% on 2019)

• Group RevPAR[i] of €106.39 up 14% on 2019 ‘LFL’, Q4 2022 RevPAR[i] of €104.51 up 21% on Q4 2019 ‘LFL’

• Profit after tax of €96.7 million (+24% on 2019)

• Free Cashflow[i] of €126.5 million (+26% on 2019) and Free Cashflow per Share[i] of 56.8 cent (+4% on 2019)

• Planned reintroduction of dividend in H2 2023

1,900+ ROOMS ADDED IN 2022 WITH PIPELINE OF 1,333 ROOMS

• Opened 50th hotel with Clayton Hotel Glasgow City in October 2022

• Six leased hotels and one owned hotel added to portfolio in 2022, room count now 10,953 (+19% since December 2019)

• Entered lease for first hotel in continental Europe in February 2022 and rebranded to Clayton Hotel Düsseldorf in December 2022

• Diversifying further into the UK

• 1,165 rooms added to UK portfolio in 2022 (+34% room growth since December 2021), +50% UK Revenue growth since 2019

• 29% of rooms located in the UK at end of 2019, UK rooms now represent 37% of portfolio at end of 2022

• Since year end, completed £44.3 million purchase of new 192-bedroom Maldron Hotel Finsbury Park, London, expected to open in summer 2023

• Four hotels (834 rooms) currently under construction in key UK cities - London (opening Q1 2024), Brighton, Liverpool, and Manchester (all opening summer 2024)

BALANCE SHEET STRENGTH ENABLING SUSTAINABLE GROWTH

• Net Debt to Value (property assets) [i] of 8% (December 2021: 24%) and Net Debt to EBITDA after rent[i] of 0.8x (December 2019: 2.8x)

• Cash and undrawn committed debt facilities of €455.7 million (December 2021: €298.5 million)

• Hotel assets[i] worth €1.4 billion

GROWTH STRATEGY CONTINUES TO DRIVE VALUE

• Owned asset portfolio provides optionality in a range of macro-economic environments while generating strong Free Cashflow[i] and supporting leasehold expansion strategy

• Net property valuation uplift of €209.4 million in 2022 (2021: uplift of €21.2 million)

• Leased asset portfolio generating strong cash flow for reinvestment

• Seven newly leased hotels added in 2021 and 2022 and current leased pipeline of four hotels, all in prime locations, expected to contribute annual EBITDA (after rent) [i] of approximately €24 million when fully operational

• Strong track record of identifying and securing opportunities as we continue to expand Dalata’s footprint

• Opened owned Maldron Hotel Merrion Road, Dublin in August, delivered by in house development team

• Balance Sheet NAV per share[i] of €5.63 at 31 December 2022 (+29% on 2021: €4.35 at 31 December 2021)

EMPLOYMENT AT DALATA – A DIFFERENT WAY, A BETTER WAY

• Supporting over 5,000 jobs and taking care of our people to alleviate cost-of-living challenges through meaningful pay increases and other benefits important to our teams

• Launched our ‘Dalata Employer Brand’ campaign to position Dalata as a clear employer of choice in each of its markets

• Award winning Dalata Academy and graduate programmes provide excellent opportunities to develop skills and progress into senior positions within the business – 695 internal promotions in 2022

• Published 2022 Gender Pay Gap Report, reporting pay gap of 7.0%. The report outlines how we are addressing the gender pay gap and our action plan for 2023

• Increased female representation within Senior Leadership Team – 45% in 2022 (40% in 2021)

SUSTAINABILITY

• All 48 hotels tested received ‘Gold’ award from Green Tourism, an important milestone on our sustainability journey

• Achieved a reduction in Scope 1 and Scope 2 carbon emissions per room sold of 15%[ii] in Q2 - Q4 2022 versus Q2 - Q4 2019, on track to reduce energy related emissions by 20% per room sold by 2026

• Energy management projects commissioned across our existing hotel portfolio to retrofit energy efficient technologies

• Modern, efficient portfolio contributing to our sustainability focus - Maldron Hotel Merrion Road, Dublin and Maldron Hotel Finsbury Park, London both built to an ‘A’ Building Energy Rating (BER) utilising metering, LED lighting and new green technologies to reduce carbon emissions

OUTLOOK

The Group remains cautiously optimistic on its outlook for 2023. Dalata’s ‘like for like’ RevPAR[i] for January/February is expected to be 17% ahead of 2019 levels in Dublin, 54% in Regional Ireland and 27% in the UK. Engagement with corporate customers and tour operators on demand and pricing has been positive. There are also positive demand indicators in Ireland and the UK, including on the resumption of more normalised conference and events business levels and the continuing return of international travellers, in particular from the US market. We continue to monitor the macro-economic backdrop and any potential for a slowdown, most notably in domestic leisure demand. However, we are not seeing any such indicators in our trade levels to date.

The Group has entered into fixed pricing contracts for over 85% of its projected gas and electricity consumption in 2023. We estimate total gas and electricity costs of c. €31 million in 2023, based on projected consumption, compared to total gas and electricity costs of €31.7 million for the year ended 31 December 2022.

Recognising the importance of dividends to shareholders, the strength of the operational performance, cash generation of the business and our future prospects, the Board plans to re-introduce a progressive dividend policy, commencing with an interim dividend at H1 2023 results.

DERMOT CROWLEY, DALATA HOTEL GROUP CEO, COMMENTED: 

“As I reflect on 2022, I am very pleased with the Group’s recovery and record performance.  We have emerged from the pandemic and its after-effects with a business that has grown in scale and ambition. We are proud to have recently opened our 50th hotel with the completion of Clayton Hotel Glasgow City, to have added seven hotels to the Group’s portfolio during the year and to have exceeded €0.5 billion in revenues for the first time. We understand that the Group’s performance was achieved through the contributions of all our stakeholders whom we continue to place at the heart of all we do.

When I assumed the role of CEO in November 2021, I positioned people, customer focus, growth, sustainability and innovation at the core of my strategic priorities. I wanted Dalata to retain the elements which have made it successful while responding to the new realities facing our industry, the after-effects of the pandemic and the current geopolitical events in Europe. I believe Dalata can respond effectively to the challenges faced by our industry utilising these strategic pillars to optimise our product offering, streamline our processes, drive innovation while maintaining a healthy bottom line and to manage and grow our business responsibly and sustainably.

We welcome the supports received in 2022 from the Irish and UK governments in assisting the hospitality sector in its recovery from the pandemic and responding to inflationary pressures impacting businesses and consumers. These supports recognise the key role the hospitality sector plays in the economy and its importance to economic growth and job creation spread throughout the cities and regions in the countries in which we operate. The pandemic reminded us of the essential social contribution that hotels make in providing a place for people to connect and come together for social, leisure and corporate activities. Furthermore, we welcome the recent extension by the Irish government of the reduced VAT rate to support the hospitality sector.

In 2023, Dalata is well set to capitalise on the opportunities that will undoubtedly arise in the markets in which we operate. I was pleased to recently launch our employer brand which further expands our capacity to be an employer of choice offering a rewarding career path with development opportunities across our growing international portfolio. We continue our ambitious UK expansion plans with the recent purchase of Maldron Hotel Finsbury Park, London due to open in summer 2023 to be closely followed by our Maldron Hotel Shoreditch, London.

We remain confident in our ability to outperform with our modern hotel portfolio, our focus on sustainability, our decentralised operating model and our track record of providing a superior guest experience. As we look ahead, Dalata’s robust balance sheet, financial resources, pipeline of talented people and excellent reputation position us strongly for further growth. I believe Dalata offers a different way, a better way to deliver success and growth, sustainably for all our stakeholders.”

ENDS

ABOUT DALATA

Dalata Hotel Group plc was founded in August 2007 and listed as a plc in March 2014. Dalata is Ireland’s largest hotel operator, with a growing presence in the UK and continental Europe. The Group’s portfolio comprises 50 three and four-star hotels with 10,953 rooms and a pipeline of over 1,300 rooms. The Group currently has 29 owned hotels, 18 leased hotels and three management contracts. Dalata successfully operates Ireland’s two largest hotel brands, the Clayton and the Maldron Hotels. For the year ended 31 December 2022, Dalata reported revenue of €558.3 million and a profit after tax of €96.7 million. Dalata is listed on the Main Market of Euronext Dublin (DHG) and the London Stock Exchange (DAL). For further information visit: www.dalatahotelgroup.com

CONFERENCE CALL AND WEBCAST DETAILS

Management will host a conference call and webcast for analysts and institutional investors at 08:30 BST today 28 February 2023.

• For conference call details, please register here

• The webcast will be available here

Please allow sufficient time for registration.

Contacts

NOTE ON FORWARD-LOOKING INFORMATION

This Announcement contains forward-looking statements, which are subject to risks and uncertainties because they relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends, and similar expressions concerning matters that are not historical facts. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Group or the industry in which it operates, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements referred to in this paragraph speak only as at the date of this Announcement. The Group will not undertake any obligation to release publicly any revision or updates to these forward-looking statements to reflect future events, circumstances, unanticipated events, new information or otherwise except as required by law or by any appropriate regulatory authority.

2022 FINANCIAL PERFORMANCE