Get Adobe Flash player 4Review of the Year REPORT ON THE PARENT COMPANY FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER31, 2012 4.2. REPORT ON THE PARENT COMPANY FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER31, 2012 ACTIVITIES OF ACCOR SA Royalties from subsidiaries 316 336 45% Service fees (1) (2) 226 229 30% Rental and business-lease revenue 88 80 11% Royalties from non-Group companies 81 95 13% Guarantee fees 14 12 2% TOTAL 725 753 100% (1) Services provided by Accor SA include corporate services, purchasing, technical support, accounting fees and back-office systems. (2) Distribution income has been reclassified as royalties from owned and leased hotels and royalties from non-Group companies.

Accor SA owns the Pullman, Novotel, Suite Novotel, Mercure, ibis Styles, ibis, Formule1/ibis budget, and hotelF1 brands, and receives royalties from their licensing. It also owns Hotels businesses in France and holds most of the hotel management contracts and franchise agreements in the country.

Accor SA provides other Group companies with hotel management, purchasing, cash management, IT and advertising services, as well as various advisory services, and assigns staff to them as required. Billings for these services correspond either to a percentage of the hotel’s revenue and/or profit, either as a flat fee or a fee per service. They are determined on an arm’s length basis.

As the Group’s holding company, Accor SA manages a substantial portfolio of equity interests, receives dividends from subsidiaries and leads the Group’s expansion.

Accor SA revenue by source

(in million of euros)

Other income, expense transfers and reversals of depreciation, amortization and provisions amounted to €28.2million in 2012, compared with €37.1million in 2011.

The €8.9million decrease corresponded primarily to the reversal of €10.7million in provisions recognized in 2011 for restructuring and post-employment benefits, as well as €8.5million in expense transfers on the syndicated credit facility, which were offset in 2012 by the capitalization of €5.3million in development costs for online distribution applications and by the €5.0million proceeds from the sale to Accor North America of rights to use the Fols front office application in the United States.

At December31, 2012, the following hotels were managed by French subsidiaries under business leases: two Sofitel, 48Mercure, 12Suite Novotel, one ibis Styles, three ibis, and one ibis budget.

Review of 2012 results

Revenue from all of the Company’s operations amounted to €753.3million in 2012, versus €724.9million the year before. The 3.92%, or €28.4million, increase reflected the €12.7million growth in revenue from hotel management operations and the €23.2million gain from the overhaul of the distribution model, which offset the €7.5million decline in rental income due to the ongoing deployment of the Group’s asset-right strategy.

Revenue includes hotel royalties, rental and business-lease revenue and service fees.


2012 % of total

Operating expenses rose by €51.8million to €734.5million from €682.7million the year before, primarily due to the costs and fees incurred on strategic projects (€12.1million), the overhaul of the Group’s distribution model (€23.7million), and the repositioning of the ibis brands (€9.1million). In addition, in compliance with French legislation, payment of the 2011 dividend gave rise to a mandatory “profit-sharing bonus” in an amount of €5.0million, which was recognized in the first half.

Operating profit stood at €46.9million compared to €79.3million in 2011, a decline of €32.4million.