By Ruth Bender
PARIS--French hotel group Accor SA (AC.FR) said Wednesday it
plans to save 100 million euros ($134 million) within two years as
it carries out a strategic review of projects in Europe and reduces
its operating costs.
The plan comes as the company, Europe's leading hotel firm by
the number of rooms, moves toward an asset-light model amid
deteriorating business conditions in southern Europe and tightened
competition.
Accor has been selling property owned outright and boosting the
number of rooms it operates under franchise and management
agreements, following the lead of peers including Marriott
International Inc. (MAR) and Starwood Hotels & Resorts Inc.
(HOT).
The transformation of its business model will reduce the group's
adjusted net debt by EUR2 billion by 2016, Accor said, which would
also help it improve its earnings before interest and taxes margin
to above 15% in the same year.
The group's Chief Financial Officer Sophie Stabile said Accor
hadn't yet decided if the cost savings plan would include job cuts,
and added that the group doesn't expect southern Europe to improve
throughout the year.
Accor, which owns chains such as Sofitel and Ibis, posted a net
loss of EUR599 million in 2012, due to an accounting loss linked to
the sale of U.S. economy hotel chain Motel 6.
Earnings before interest and tax rose 3% to EUR526 million,
meeting the company's target of reaching between EUR510 million and
EUR530 million in 2012.
Accor in January already reported revenue in the fourth quarter
up 5% to EUR1.45 billion. On a like-for-like basis--at constant
exchange rates and stripping out acquired or divested assets
including Motel 6--sales rose 2.5% in the quarter.
Shares closed Tuesday at EUR29.05.
Write to Ruth Bender at ruth.bender@dowjones.com
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