NH Hotel Group announces 2020 results

NH Hotel Group achieved total revenues of € 539.7 million in 2020 compared to the € 1,718.3 million obtained in 2019, which represents a decrease of 68.6% equivalent to € 1,179 million. The contingency plan applied by the company since the beginning of the pandemic, focused on preserving cash and controlling expenses, has managed to cushion by 60% the effect on results of this drastic decrease in income. For this, recurring operating expenses went from 1,069 million euros in 2019 to only 549 million euros in 2020, with a saving of 48.6%. Thanks to this effort, complemented by the agility and flexibility of the openings, the company has been able to partially mitigate the impact of the pandemic on its accounts, closing 2020 with recurring net losses of 371 million euros.

For Ramón Aragonés, CEO of NH Hotel Group, “the effort in management and cost containment has allowed us to endure in the worst year in our history. We have taken all the necessary measures to get here, and we will continue to apply whatever is necessary until we overcome the current situation. Preserving liquidity and controlling spending remain the foundation of our strategy. The priority objective is to guarantee the sustainability of the Group and its brands, because it is the only valid result for our professionals, clients, suppliers, creditors and shareholders ”.

The company increased cost containment in the year by renegotiating rental contracts (with accumulated savings in fixed rentals of 63.6 million euros in the year, representing a 25% reduction) and through the section on personnel (with an annual decrease of 46.7% as a consequence of the temporary measures of labor adjustment and reduction of working hours and wages. ”). The flexible structure is one of the Group's competitive advantages, which allowed a rapid reopening of more than 300 hotels since June to capture the demand of national clients, reaching 80% of the open portfolio in the third quarter. Due to the impact of the second wave, with new perimeter closures and mobility restrictions after the summer, many hotels closed again, with which the percentage of open hotels was reduced to 60% at the end of the year. By quarters, revenues were 279 million euros in the first, 30 million in the second, 148 million in the third and 82 million euros in the fourth.

The Group also prioritized strengthening and protecting the cash, which ended 2020 with an average monthly operating drain of 28 million euros. Thus, the company closed the year with a liquidity of 346 million euros. NH ended the year with a net financial debt of 685 million euros, after an increase of 507 million euros in the year.

The extension until 2023 of the maturity of the syndicated credit line RCF worth 236 million euros, allows not having to face any relevant debt maturity until 2023. Additionally, the commitments of the financial ratios are waived until the December measurement of 2021, including the ICO loan worth 250 million euros.

In the information sent to the regulator, NH values ​​that the flexible operating structure, cost control and financial resilience demonstrated in 2020 "give confidence" to overcome the important challenges of the first half of 2021, with a demand that continues to be severely affected in the start of the year. To this end, the Group underlines that strict control and efficiency measures continue to be implemented to protect the business, investments will continue to be limited throughout 2021 and in the medium term, it will benefit from high brand recognition, excellent locations and strong market positioning once the recovery is activated.

Business
units By business units, revenues in Spain fell by 68.7%, with a greater impact in Barcelona (-79.4%) and Madrid (-72.9%) than in secondary cities (-63, 4%). Operating expenses were contained by 48.3%, thanks mainly to the efficiency measures applied since March. Average revenue per room fell 71.5%, with a 62.1% drop in occupancy.

In Italy the fall in occupancy was 68.2%, with a 74.0% reduction in income, with Rome (-77.9%) and Milan (-78.1%) more affected than secondary cities ( -71.0%). Operating expenses were reduced by 54.5%.

In the Benelux, occupancy fell by 65.9%, with Amsterdam (-77.8%) and Brussels (-73.5%) more affected than secondary Dutch cities (-62.6%). Revenues fell 69.8%, and operating expenses were half that of the previous year.

In Central Europe, revenues fell by 64.5% and occupancy by 61.7%. Munich and Frankfurt were the worst hit cities, partly due to their strong performance in 2019. Operating expenses fell 43.1%.

In the Las Americas Business Unit, occupancy decreased 70.6% in the period. Revenues contracted 75.9% in Argentina, 69.3% in Colombia and Chile, and 65.1% in Mexico, all in local currency.