PARIS—Accor SA saw net profit decline in 2019, and launched two additional share buyback programs, according to full-year earnings results. However, the brand experienced solid growth in consolidated full-year 2019 revenue, with a total of €4,049 million ($4,394 million), up 3.8% like-for-like (LFL) and up 16% as reported compared with full-year 2018.
Net profit for the year was €464 million ($501 million) compared with €2.23 billion ($2.42 billion) the previous year, when the disposal of 65% of AccorInvest’s capital resulted in a €2.4 billion ($2.61 billion) capital gain, the company said.
Over and above the €300 million ($325 million) share buyback program in place on January 20, 2020, two new share buyback programs will be launched for €300 million ($325 million) in 2020 and €400 million ($434 million) in 2021. Beyond that, the group plans to maintain a shareholder return policy in addition to its policy of distributing ordinary dividends.
Accor added a record 45,108 rooms (327 hotels) on an organic basis during the period, including 12,954 rooms (65 hotels) in the luxury segment. It had a portfolio of 739,537 rooms (5,036 hotels) and a pipeline of 208,000 rooms (1,206 hotels) at December 31, 2019, of which 76% are in emerging markets.
The full-year 2019 results confirmed the strength of the asset-light model, noted Sébastien Bazin, chairman and CEO of Accor.
“The group delivered a record performance again for FY 2019. This is all the more outstanding against a difficult macroeconomic background and in light of our successful transformation, parallel to achieving growth,” said Bazin. “Today, Accor is more diversified than ever, and a fully asset-light group. Going forward, we will pursue the execution of our strategy, focusing on our roadmap and value creation for shareholders.”
Bazin also acknowledged the impact of COVID-19 on Accor’s hospitality business. “While these are challenging times for China, our thoughts are with the Chinese people, our teams, our clients and our partners there,” he said. “As we are actively managing the situation in the region, our focus is on the fundamentals, which are the cornerstone of our business model: the excellence of our 300,000-strong workforce, our powerful brands, our top-performing distribution tools and loyalty programs, our consolidated leadership position in high-potential regions, and our highly robust financial position. By leveraging these assets, we are confident in our ability to pursue our growth objectives and enhance sustainable shareholder returns.”
Consolidated EBITDA stood at €825 million ($895 million) at December 31, 2019, up 5.9% like-for-like and up 14.8% as reported compared with full-year 2018. This is in line with the target range of €820 million ($889 million) to €840 million ($911 million) revealed by the group in October.
Recurring free cash flow came to €434 million ($471 million) at December 31, 2019, reflecting a cash conversion rate of 77%.