Mandarin Oriental International Limited - Mandarin Oriental Hotel ...

2007 INTERIM RESULTS HIGHLIGHTS 

Combined Total Revenue of Hotels under 

Management (US$m) 

EBITDA (US$m) 

June 

2007 

477 

84.5 

� Temporary closure of Mandarin Oriental, Hong Kong impacted first half 

results in 2006 

June 

2006 

398 

48.9


Profit Attributable to Shareholders (US$m) 

Profit Attributable to Shareholders excluding 

investment gains (US$m) 

June 

2007 

50.3 

34.3 

Investment gains: 

� 2007: US$16 million post tax gain from sale of the Group’s 50% interest in 

Mandarin Oriental, New York 

� 2006: US$35 million post tax gain from sale of The Mark, New York 

June 

2006 

48.7 

13.7


Earnings per Share (US¢) 

Earnings per Share excluding gains (US¢) 

Adjusted Net Asset Value per share (USD)* 

* including leasehold properties at valuation 

� Interim dividend of US¢1 declared in 2007 

June 

2007 

5.19 

3.54 

1.82 

June 

2006 

5.04 

1.42 

1.56

STRATEGIC OBJECTIVES 

� Improve our position as one of the finest global luxury 

hotel brands 

� Strengthen our competitive performance in all markets 

� Towards 10,000 rooms 

� Achieve a strong cash flow and balance sheet

CONDÉ NAST TRAVELLER UK 

GOLD LIST – 2007 

Mandarin Oriental Dhara Dhevi, Chiang Mai 

Best For Facilities 


Best For Food 

Mandarin Oriental Hyde Park, London 

Best For Location 

The Landmark Mandarin Oriental, Hong Kong 

Best For Rooms

CONDÉ NAST TRAVELER US 

GOLD LIST – 2007 

Mandarin Oriental, San Francisco 

Mandarin Oriental, Miami 



Mandarin Oriental, Munich 

The Oriental, Bangkok 

The Landmark Mandarin Oriental, Hong Kong 

Mandarin Oriental, Hong Kong 

Mandarin Oriental, Kuala Lumpur 

The Oriental, Singapore

TRAVEL & LEISURE USA 

WORLD’S BEST AWARDS – 2007 

Mandarin Oriental, San Francisco 

Mandarin Oriental, Miami 






Mandarin Oriental, Kuala Lumpur 

The Oriental, Singapore

IMPROVE OUR POSITION AS ONE OF BEST 

LUXURY HOTEL GROUPS 

New Fans for Award-winning 

Advertising Campaign: 

� Darcey Bussell 

� Liam Neeson

IMPROVE OUR POSITION AS ONE OF BEST 

LUXURY HOTEL GROUPS 

Core Brand Attributes: 

� Creative hotel design and 

architecture 

� Holistic spa operations 

� Innovative dining 

� Guest-oriented technology 

� Legendary service

RevPAR in (US$) 

STRENGTHEN OUR COMPETITIVE POSITION 

600 

500 

400 

300 

200 

100 

0 

FIRST HALF PERFORMANCE 2007 

Excludes new and closed hotels in both years 

+13% 

2006 2007 

ASIA (1) 

+32% 

2006 2007 

EUROPE (2) 

(1) Asia up 9% in local currency terms 

(2) Europe up 23% in local currency terms 

+14% 

+16% 

2006 2007 2006 2007 

THE AMERICAS COMBINED 

TOTAL


Asia 

� Successful reopening of Mandarin 

Oriental, Hong Kong 

� Refurbished hotels in Singapore and 

Bangkok 

� Increased recognition of new hotels: 

� Tokyo 

� Chiang Mai 

� The Landmark Mandarin Oriental, 

Hong Kong


Asia 


(100% ownership) 

� US$150m renovation ensures position 

as one of the world’s legendary hotels 

� Average rate of US$373 in first six 

months 

� Occupancy at 72%

“The revamp of the Mandarin left it looking similar but beautifully 

spruced-up, a huge relief for its regulars.” 

Tatler

“A truimphant return for one of the most famous hotels in the world….” 

Business Traveller


Asia 

Hong Kong: 

� Two complementary luxury hotels 

under operation 

� The Landmark Mandarin Oriental 

leads the city in rates


Asia 

The Excelsior, Hong Kong 


� Strong corporate demand in first 

half 

� Average rate increased to US$170 

(US$151 in 2006) 

� RevPAR increased by 8% over 

2006 with lower occupancy at 85% 

(89% in 2006)


Asia 

Mandarin Oriental, Tokyo 

(Long-term lease) 

� Opened December 2005 

� Occupancy increased to 78% 

(59% in 2006) 

� RevPAR increased by 24%

“One of the most lavishly appointed spaces in the city, it has the best views.” 

Financial Times

“This is Tokyo Central…..A hotel plugged into the 21 st century.” 

Tatler Travel Guide


Asia 

Mandarin Oriental, Macau 


� Maintained competitive position 

despite increased supply 

� Increased lease income from 

luxury retail and casino areas


Asia 

Mandarin Oriental, Manila 

(96.2% ownership) 

� Strengthening domestic economy 



Asia 

The Oriental, Singapore 


� Capitalised on stronger market 

conditions 


(US$154 in 2006) 

� Hotel to be renamed: 

Mandarin Oriental, Singapore


Asia 



� Global recognition as one of the world’s 

legendary hotels 

� Maintained its contribution despite 

continued political uncertainty


Europe 

� Improved RevPAR across the 

region


Europe 



� Strong performance as one of city’s most 

exclusive properties 

� Occupancy increased to 85% 

(81% in 2006) 

� Average rate of US$832 

(US$642 in 2006)

“A prime location and the city’s most innovative hotel spa. Don’t miss the tai 

chi classes in Hyde Park.” 

Travel & Leisure

“ This is simply a very fine, Michelin-starred restaurant with lovely views 

over Hyde Park and a brilliant young chef.” 

Tatler Restaurant Guide


Europe 



� Room renovation impacts 

occupancy at 61% (77% in 2006) 

� Maintaining strong competitive 

position 

� Average rate at US$509 (US$481 

in 2006)


Europe 

Mandarin Oriental Hotel du Rhône, 

Geneva 


� Occupancy increased to 71% (63% in 2006) 

� Average rate of US$527 (US$473 in 2006) 



Europe 

Mandarin Oriental, Prague 

(Management contract) 

� Performed well since opening in 

September 2006 

� Achieving rates in excess of US$400 

� Will take two to three years to fully 

establish market position

“Mandarin Oriental, Prague combines medieval vaulting and gothic 

windows with the chain’s distinctive Asian influence.” 

High Life

“The city’s splashiest new hotel is Mandarin Oriental, Prague which features 

one of the city’s best day spas.” 

The New York Times


The Americas 

� Rates strengthened in all markets 

� Double digit RevPAR increases at 

each hotel


The Americas 

Mandarin Oriental, Washington DC 



(US$311 in 2006) 

� Occupancy at 64% (59% in 2006) 

� Local neighbourhood continues to 

develop 

� Consolidating market position

“……Chef Eric Ziebold’s contemporary American menu was 

spectacular…..” 

USA Today

“If you want to be in the heart of the most powerful place in the world, look 

no further than Mandarin Oriental, Washington DC.” 

www.forbestraveler.com


The Americas 



� RevPAR increased by 14% over 2006 

� Average rate of US$831 (US$765 in 2006) 

� Occupancy at 75% (72% in 2006)

“The 35th floor Asiate restaurant serves spectacular French-Japanese 

fusion cuisine under the direction of chef Noriyuki Sugie.” 

Conde Nast Traveller

“State of the art facilities, including an exceptional spa and a pool with 

Hudson River views.” 

Travel & Leisure


The Americas 

� Hotels in Miami, San Francisco and 

Bermuda capitalised on the strong 

demand to their destinations

TOWARDS 10,000 ROOMS 

� 9,800 rooms currently in operation 

or planned 

� Increased geographic spread - 

more than half of portfolio now 

outside Asia 

� Growing brand recognition 

� Strength of brand attracts new 

hotel owners and developers


� Hotel management contracts 

announced in first half: 

� Beijing 

� Guangzhou 

� Taipei 

� Paris 

� Costa Rica 

� 20 hotels under operation 

� 16 under development


� Management Agreements: 

� Additional source of revenue with limited capital investment 

� 15 out of 16 projects are management contracts 

� Contributions will clearly increase in time 

� Owner of Hotel Assets: 

� Particularly in major cities 

� Unique investments with potential for long-term capital 

appreciation 

� Ensures control of brand 

� Increased credibility with third party owners and developers 

� Balanced Strategy of Ownership and Management

THE RESIDENCES AT MANDARIN ORIENTAL 

� One-off branding fees 

� Ongoing revenues for hotel services

FINANCIAL REVIEW 

Summary Cash Flow Statement 2007 2006 

US$m US$m 

Operating Activities 

� EBITDA from subsidiaries 64 

29 

� Dividends and interest from associates 5 

7 

(8) 

(9) 

(7) 

(3) 

� Net financing charges paid 

� Tax paid 

� Other (mainly movements in working capital) 

_______ _______ 

Total 48 8 

� Weighted average interest rate of 4.9% on Group borrowings (2006 – 4.7%) 

(6) 

(16)


Summary Cash Flow Statement 

Investing Activities 

� Capital expenditure on existing properties 

� Renovation capex for Mandarin Oriental, Hong Kong 

� Tokyo furniture and equipment 

� Proceeds on disposals (1,2) 

� Capital distribution from associates 

� Hotel mezzanine funding – net repayment 

� Other 

2007 

US$m 

(15) 

(14) 

75 

12 

9 

- 

(3) 

64 

2006 

US$m 

(1) Principally the sale of half of the Group’s 50% equity in Mandarin Oriental, New York (2007) and The Mark (2006) 

(2) The disposal of Mandarin Oriental, New York includes US$5 million of tax paid in first half. A further 

US$4 million of tax will be paid in the second half. 

(6) 

(44) 

(6) 

143 

1 

- 

(1) 

87


Summary Cash Flow Statement 

Operating Activities 

Investing Activities 

Financing Activities 

Repayment of borrowings 

Drawdown of borrowings 

Dividends paid 

Other 

Total Cash Inflow 

2007 

US$m 

48 

64 

(118) 

185 

(29) 

2 

152 

2006 

US$m 

8 

87 

(3) 

9 

(15) 

3 

89


June 

2007 

Group’s net debt (US$m) 230 

314 

Gearing (net debt over adjusted shareholders’ funds) 18% 

13% 

� EBITDA (including associates) net interest cover was 6.5 vs. 3.7 in 

the first half of 2006 

� Approx 55% of Group’s gross debt hedged 

� Following Hong Kong refinancing, average term of Group’s 

borrowings will be about 6 years 

� US$438m of cash and US$139m of committed unused facilities at 

30 June 

December 

2006

CONCLUSION 

� Increased average rates in all key markets 

� Full contribution from newly renovated Mandarin 

Oriental, Hong Kong 

� Favourable conditions set to continue 

� Continued growth of portfolio 

� Strong global brand recognition 

� Excellent position to be recognised as the best luxury 

hotel group

Mandarin Oriental International Limited - Mandarin Oriental Hotel ...

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