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Corporate Presentation



As part of the new strategy that will be led through the end of 2016, the following financial objectives have been set:

a improve the EBIT margin to more than 15%, from 9.3% in 2012;

a Increase return on capital employed, thanks to a less capital-intensive business model, to more than 18% from 14% in 2012;

a maintain the Group’s investment grade credit rating.

Together, meeting these three objectives will drive a clear structural improvement in the generation of operating free cash flow before disposals.

In addition, the P&L Performance objectives for 2016 have been set as follows:

a a more than 50% EBIT margin in the franchised and managed hotels;

a the sales & marketing fund at breakeven;

a Over the medium term, EBIT margins on the owned and leased hotels of:

-12% to 15% for owned hotels vs. 8.0% in 2012,

-8% to 10% for hotels leased under fixed-rent leases vs. 1.2% in 2012,

-8% to 10% for hotels leased under variable-rent leases vs. 5.3% in 2012.

Lastly, the following operating objectives are being pursued:

a a flow-through ratio of 50% in markets where revenue is increasing and a 40% reactivity rate in markets where it is contracting. This flow-through ratio will be reduced by 5 to 10 points by the 2013-2016 distribution investment plan;

a the opening of 35,000 rooms a year, including 30,000 through organic growth and around 5,000 through targeted acquisitions of local networks under franchise or management contracts;

a the structural reduction in maintenance capital expenditure through 2016, to around €200-250 million per year;

a the reduction in expansion capital expenditure, to around €100-150 million per year after 2017;

a a 50% reduction in the Group’s sensitivity to cycles compared with 2010.