2020 ANNUAL RESULTS
Mandarin Oriental Hotel Group

Review of 2020
• COVID-19 restrictions dramatically reduced global travel• Limited ability for hospitality businesses to generate revenues• Substantial underlying losses incurred• Extensive cost measures implemented• Robust liquidity and funding position• Development pipeline solid

MANDARIN ORIENTAL

Results Overview
US $ m2020

2019

Combined Total Revenue*

593

1,325

Group Revenue#184

567

Underlying EBITDA

(74)

155

• In 2020, government subsidies of US$36m were recognised in EBITDA across subsidiaries, management business and associates
and joint ventures* Includes revenue from the total portfolio of owned and managed hotels#Includes revenue from the Group’s subsidiary hotels as well as the Group’s management and branding activities

MANDARIN ORIENTAL

Results Overview
US $ m2020

2019

Owned hotels

(145)

22

Management business

(30)

19

Less: Impairment of the Geneva hotel(31)-Total(206)

41

Underlying (loss)/profit attributable to shareholders

MANDARIN ORIENTAL

Results Overview
2020

2019

Net Non-Trading Losses (US $ m)#(475)(97)

Loss Attributable to Shareholders (US $ m)

(680)

(56)

-1.50

4.09

4.70

Dividend per Share (US ¢)Adjusted Net Asset Value per Share (US $)# Primarily comprises a 15% decrease in the valuation of the Causeway Bay site under development (previously the site of The Excelsior
hotel in Hong Kong), in line with the overall market trend in respect of reductions in property values. The redevelopment was valued atsome US$2.5 billion, net of future construction costs, a decrease of US$475m during the year

MANDARIN ORIENTAL

Cost Management Activities• EBITDA losses were reduced as the year progressed• Payroll costs lowered by US$120m*• Headcount reduced from 13,920 to 10,770• Non-payroll costs significantly lowered• Non-essential capital expenditure suspended• Cost management remains in place

MANDARIN ORIENTAL

Cash Flow Overview• EBITDA cash outflow was US$61m*• Capital expenditures and investments of US$109m• Robust liquidity position, further enhanced in early 2021
• Balance sheet strong, gearing remains low• Group conservatively geared to sustain business downturns* EBITDA cash outflow includes losses from subsidiary hotels, the management business and working capital movement
MANDARIN ORIENTAL

OPERATIONAL PERFORMANCE

Market Performance•

Trends we experienced pre-pandemic have accelerated•

Expected decline in corporate travel has smaller impact, as reducing customer base•Pent-up demand for leisure travel, which is our main customer group, > 60% of roomnights•

Development strategy focused on leisure destinations•

Strong brand positioning at luxury end of the market, aiding business recovery•

Demand recovery will come in phases

MANDARIN ORIENTAL

Global PortfolioLondonParisNew YorkBoston
Washington DCMiamiCanouan

MadridBarcelona
Marrakech

PragueMunichGenevaLake Como
Bosphorus, Istanbul
Milan
BodrumDoha
Dubai
RiyadhAbu Dhabi

Beijing
Guangzhou
SanyaBangkok

Tokyo

ShanghaiHong Kong
Taipei
Macau

Kuala Lumpur
Singapore
JakartaSantiago

33 hotels under operation
Scheduled to open in the first half of 2021

MANDARIN ORIENTAL

2020 Annual Occupancy Performance
63%

63%

25%

Asia

18%

17%

EMEA^

America2019

•^

63%

62%

22%

Total

2020

Figures shown on a like-for-like basis for all hotels that were in the Group’s portfolio and operating for the entire year of both 2019 and 2020. As Mandarin
Oriental Ritz, Madrid, remains closed for restoration, it has also been excluded. 2020 occupancy figures are shown including periods when hotels wereclosed due to COVID-19 restrictions and as a result, will be lower than stated in industry reports which exclude periods when hotels were closed. During
the second quarter of 2020, many of the Group’s hotels in Europe and America were closed.
Europe, Middle East and Africa

MANDARIN ORIENTAL

2020 Monthly Occupancy Performance
Hotels withclosed status*--1113131398333280%
60%
40%

Asia
EMEA^
America

20%0%Jan•*^FebMarAprMayJunJulAug

SepOctNovDec2020 occupancy figures are shown including periods when hotels were closed due to COVID-19 restrictions and as a result, will be lower than stated inindustry reports which exclude periods when hotels were closed. During the second quarter of 2020, many of the Group’s hotels in Europe and America
were closed.
Number of hotels that were closed at any point during the month due to COVID-19 restrictions.
Europe, Middle East and AfricaMANDARIN ORIENTAL

2020 Annual Average Daily Rate
Average % change 2020 vs 2019 (US$ terms)
4%

16%2%-10%-17%

Asia(excl. ChineseMainland)•^

ChineseMainland

Europe (excl.
Middle East)

AmericaResorts

Figures shown on a like-for-like basis for all hotels that were in the Group’s portfolio and operating for the entire year of both 2019 and 2020. As Mandarin
Oriental Ritz, Madrid, remains closed for restoration, it has also been excluded. Calculated as the average of the percent change in the annual average dailyrate across hotels in 2020 compared to 2019. New York has been excluded from America because it was closed for most of 2020.
Europe, Middle East and Africa

MANDARIN ORIENTAL

2020 Annual RevPAR Performance
-49%

US$

569-55%
-67%

290

192

EMEA^
2019

•^

280
142

63
Asia

314-63%

America

105
Total

2020

Figures shown in US$ on a like-for-like basis for all hotels that were in the Group’s portfolio and operating for the entire year of both 2019 and 2020. As
Mandarin Oriental Ritz, Madrid, remains closed for restoration, it has also been excluded. Figures are shown excluding periods when the hotels were closed
in 2020 due to COVID-19 restrictions, in line with STR and other industry reports.
Europe, Middle East and Africa

MANDARIN ORIENTAL

Owned Hotels Operating Performance in 2020
Asia

• Hong Kong and Singapore positive EBITDA, though well below 2019
• Hong Kong occupancy 5% in second quarter, 29% in fourth quarter• Tokyo benefited from government “Go To Travel” campaign• EBITDA losses at all other owned hotels

Europe• Most hotels reopened in third quarter• EBITDA losses at all hotels• Renovations in Munich and Madrid• Largest EBITDA losses in Washington D.C., Boston and New York due toAmerica high fixed costs• Rooms renovation in Boston
MANDARIN ORIENTAL

Management Business• Total management fees 64% lower than 2019
• Branding fees received from a number of projects• Net loss from sales and marketing activities• US$12m annual payroll savings from headcount reduction• Profitability expected to recover quickly as demand returns

MANDARIN ORIENTAL

Redevelopment of the Causeway Bay Site
• Previously the site of The Excelsior hotel, Hong Kong
• Being redeveloped into a mixed-use commercial building• Commenced on 1st May 2019, demolition work completed in 2020
• Total project costs of some US$650m, on track to complete in 2025
• 87% of construction costs to be incurred post 2022
• Not the Group’s intention to be the long-term owner of commercial
property

MANDARIN ORIENTAL

FINANCIAL REVIEWUnderlying EBITDA Performance
Key Highlights
US $ m

1H 2020

2H 2020

2020

2019

Owned hotels

(39)

(23)

(62)

125

Management business

(11)

(1)

(12)

30

(50)

(24)

(74)

155

Underlying EBITDA*Total• Underlying EBITDA losses reduced by 50% in the second half of 2020
• Owned hotels represented c.85% of the EBITDA loss
* In 2020, government subsidies of US$36m were recognised in EBITDA across subsidiaries, management business and associatesand joint ventures

MANDARIN ORIENTAL

Financial Review

Cash Flow Statement – Operating Activities
US $ m2020

2019

Operating Activities
EBITDA from subsidiaries and non-cash items
Dividends and interest from associates and JVs
Working capital movement
Net interest and other financing charges paid
Tax paid
Total

(63)
2(12)
(10)
(84)

132
6(3)
(16)
(6)
113

MANDARIN ORIENTALFinancial Review

Cash Flow Statement – Investing Activities
US $ m2020

2019

Investing activities
Net capital expenditure on existing properties
Redevelopment of the Causeway Bay site
Restoration of the Madrid hotel
Net (advance to)/repayment from associates and joint ventures
Others

(39)
(22)
(31)
(9)
(8)

(42)
(15)
(15)
2
(10)

Total

(109)

(80)

MANDARIN ORIENTAL

Financial Review

Summary Cash Flow Statement
US $ m2020

2019

Operating Activities
Investing Activities
Financing Activities
Net drawdown of borrowings
Dividends paidOthers

(84)
(109)

113
(80)

88
(6)34(38)(7)

Net (decrease) / increase in cash
Opening cash balance 1st January
Effect of exchange rate changes
Closing cash balance 31st December

(110)
271
4165

22247
2271
MANDARIN ORIENTAL

Financial Review
Net Debt
US $ mAdjusted shareholders’ funds#
Adjusted net asset value per share (US $)Net debt
Gearing
Hedging ratio on gross debt
Average tenor of debt
Cash balance
Undrawn committed debt facilities
#2020

2019

5,171
4.09
506
10%
41%
3.2 years
165
163

5,936
4.70
300
5%
47%
4.2 years
271
249Includes the market value of the Group’s ownership interest in its freehold and leasehold properties

MANDARIN ORIENTAL

Financial Review

Future Significant Capital Commitments
US $ mTimingMunich expansion

139

2021-25

Redevelopment of the Causeway Bay site569

2021-25

Total

708

MANDARIN ORIENTAL

HOTEL OPENINGS AND
HOTELS UNDER DEVELOPMENTNew Hotels Under Operation
Emirates Palace, Abu Dhabi(Management contract)

Al Faisaliah Hotel, Riyadh(Management contract)• 394 rooms and suites• 321 rooms and suites• Takeover effective on 1st January 2020

• Takeover effective from March 2021

• To be rebranded as Mandarin Oriental
Emirates Palace, Abu Dhabi following
significant renovation• To be rebranded as Mandarin Oriental
Al Faisaliah, Riyadh, following an
extensive renovation

MANDARIN ORIENTALDEVELOPMENT PORTFOLIO
LondonBarcelona
Boca Raton

Honolulu

ViennaZurichNew York

Grand Cayman

Moscow

LuzernIstanbul

BeijingNanjing

Tel Aviv
Dubai

Da Nang

ShenzhenMuscatPhuketManilaSaigonExpected to open within the next five years
Hotels (20)Residences (13 of which 2 are standalone)

MANDARIN ORIENTAL

Development Update• Development pipeline all managed properties, no equity investment required• Focus on city-centre and resort locations where brand is currently absent• Many projects at an advanced stage of completion• Construction delays expected due to pandemic• Since January 2020, four new management contracts announced including thehotel in Riyadh

MANDARIN ORIENTAL

New Project
Mandarin Oriental, Vienna(Management contract)• 151 rooms and 17 branded residences• A new hotel housed in a heritage building• Scheduled to open in 2023

MANDARIN ORIENTAL

New Project
Mandarin Oriental Savoy, Zurich(Management contract)• 80 rooms and suites• Existing hotel: Savoy Baur en Ville• The Group will assume management in 2024
following a full renovation• To be rebranded as Mandarin Oriental
Savoy, Zurich

MANDARIN ORIENTAL

New Project
Mandarin Oriental, Da Nang
(Management contract)• 69 villas and 18 branded residences• Beach front resort• Scheduled to open in 2024

MANDARIN ORIENTAL

Scheduled Openings in 2021
Mandarin Oriental Ritz, Madrid(50% ownership)• 153 rooms and suites• Historic and iconic property• Extensive three-year renovation• Scheduled to open in the second quarter of2021

MANDARIN ORIENTAL

Scheduled Openings in 2021
Mandarin Oriental Bosphorus, Istanbul(Management Contract)• 100 rooms and suites• First new hotel to open on The Bosphorus
for some time

MANDARIN ORIENTALLOOKING TO THE FUTURE

Strategic Priorities• Brand: grow Fans of M.O., new hotel openings, expand brandinto new areas• People: focus on colleague experience, launched alumni
network: Forever Fans
• Customer: personalised experiences• Digital: enhancing guest-facing technologies• New vision: A World of Fans
MANDARIN ORIENTAL

Core Values• Sustainability and innovation are the foundation of our culture• Goal to eliminate single-use plastic across hotels by March 2021
• 95% reduction in usage estimated by end of June 2021
• Broader sustainability objectives also developed• Removing barriers to creativity and thinking differently

MANDARIN ORIENTAL

Outlook• Trading conditions remain uncertain• Underlying loss expected in the first half of 2021
• Removal of barriers to travel and roll-out of vaccination
programmes critical• Balance sheet conservatively geared• Strong long-term prospects for luxury hospitality

MANDARIN ORIENTAL

Questions to investors@mohg.com