EX-99 3 a2112563zex-99.htm EXHIBIT 99

EXHIBIT 99

 

 

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Orient-Express Hotels Ltd

 

Investor Presentation
New York
June 3, 2003

 

 



 

Orient-Express Hotels

 

             Global Hospitality and Leisure Company

 

    Exclusive focus on deluxe luxury market

 

    31 Hotels, 4 Restaurants, 5 Trains, 1 River Vessel

 

             Distinguished Luxury Brand Names

 

    Orient-Express, Cipriani, Copacabana Palace

 

•     ‘21’ Club, Windsor Court, Ritz Madrid

 

             Focus on Ownership

 

    Irreplaceable assets, high barriers to entry

 



 

Turbulent Times

 

[CHART]

 

 



 

RevPAR Decline has Squeezed Margins Since 2000

 

RevPAR

 

[CHART]

 

Margin (%)

 

[CHART]

 



 

Declines in Occupancy, Not Rate

 

Average Room Rate

 

[CHART]

 

Occupancy

 

[CHART]

 



 

2002 Acquisitions Drive Top Line Growth

 

[CHART]

 

 

Revenue $m

Le Manoir

=

13

 

La Residencia

=

8

 

Maroma

=

3

 

Miraflores

=

4

 

 

 

28

(11%)

 



 

Acquisitions Build EBITDA Platform for Strong Recovery

 

[CHART]

 

Recent
Acquisitions

 

EBITDA
Multiple

 

 

 

 

 

Le Manoir

 

7

La Residencia

 

7

Maroma

 

10

Miraflores

 

10

 

Weighted Av= 8x

 



 

OEH Recovery Potential

 

1) General RevPAR Recovery

 

             Same store EBITDA decline of $25m since 2000

 

2) Acquisitions

 

             $8m EBITDA

 

             Exceptional purchase prices (8 x EBITDA)

 

3) Expansions Kick In

 

             Investment made of over $50m

 

             High return when demand recovers

 



 

Over $50 Million Recent Expansion
Investments with Good Potential

 

Inn at Perry Cabin

 

41 new keys, pool, new restaurant and new meeting room

 

 

 

Maroma

 

20 additional keys completed

 

 

 

Villa San Michele

 

8 additional keys

 

 

 

La Residencia

 

2 new presidential suites

 

 

 

Cipriani

 

New banqueting room and master suite

 

 

 

Peru

 

New luxury train

 

 

 

La Cabana

 

Construction of new restaurant

 

 

 

Caruso

 

Hotel closed pending refurbishment

 

 

 

Westcliff

 

New conference centre opening soon

 



 

Growth Potential: The Right Time for OEH

 

Cycle Timing

 

OEH (Owner/Acquirer)

 

Pure Manager

Hotel performance weak

 

  Lower purchase prices

 

}

 

 

 

 

 

 

Disputes over contracts

Owners in difficulty

 

  Distress sales

 

 

 

 

 

 

 

 

Very little new construction

 

  Less competition

 

No new contracts

 

 

 

 

 

 

 

 

 

 

 



 

2003: Hotel Ritz, Madrid

 

             Unique property, outstanding location

 

             Good business mix: corporate, leisure, banqueting

 

             Attractive deal structure

 

             €125m price, about 10 x EBITDA

 

             Benefit of management fees reduces price to 8-9 x EBITDA

 

             Solid real estate investment partner

 

             €20m equity exposure; €3-4m initial annual return

 

             A template for further acquisitions?

 



 

Sea Containers Relationship

 

             Sea Containers reduced shareholding

 

             14.4 million shares owned (47% of equity) - voting 16%

 

             Heavy voting shares passed to OEH (2002)

 

             Cross-default issues largely resolved

 

             Originally $182m debt at time of IPO

 

             Only one outstanding $15m

 

             Shared services agreement

 

             Can be terminated with 1 year notice

 



 

Attractive Finance for Expansion

 

             OEH style assets an attractive proposition for banks

 

             Virgin hotel transaction (Le Manoir and La Residencia, 2002)

 

             68% LTV

 

             115 bp over Libor

 

             7 year term

 

             Ritz, Madrid (2003)

 

             68% LTV

 

             100 bp over Libor

 

             25 year term

 

             JV: non-recourse

 



 

Strong Balance Sheet – Hidden Asset Value

 

31 March

 

$’m

 

 

 

 

 

Cash

 

40

 

 

 

 

 

Other current assets

 

85

 

 

 

 

 

Real estate, investments and other assets

 

893

 

 

 

 

 

Total Assets

 

1,018

 

 

 

 

 

Liabilities

 

126

 

 

 

 

 

Debt

 

469

 

 

 

 

 

Shareholder equity

 

423

 

 

 

 

 

 

 

1,018

 

 

                       Net assets per share on a historical US GAAP basis = $13.73/Share

 

                       Cash availability to be increased by $70m with re-financing of Italian hotels

 



 

Summary: A Special Moment for OEH

 

Recovery Potential

 

             General recovery: $25m EBITDA same store decline

 

             Acquisitions at exceptional prices

 

             Expansions kick in

 

Growth Potential

 

             Buyer’s market

 

             The Ritz as a template

 

             Limited new supply

 



 

PSLRA

 

ORIENT-EXPRESS HOTELS LTD.

Management believes that EBITDA (earnings before interest, tax, depreciation and amortization) is a useful measure of operating performance, used by management and investors to help determine the ability of a company or property to service or incur indebtedness, because it is not affected by non-operating factors such as leverage and the historic cost of assets.  EBITDA is also a financial measure commonly used in the hotel and leisure industry.  However, EBITDA does not represent cash flow from operations as defined by U.S. generally accepted accounting principles, is not necessarily indicative of cash available to fund all cash flow needs and should not be considered as an alternative to earnings from operations under U.S. generally accepted accounting principles for purposes of evaluating results of operations.

This presentation and accompanying oral remarks by management contain, in addition to historical information, forward-looking statements that involve risks and uncertainties.  These include statements regarding earnings growth, investment plans and similar matters that are not historical facts.  These statements are based on management’s current expectations and are subject to a number of uncertainties and risks that could cause actual results to differ materially from those described in the forward-looking statements.  Factors that may cause a difference include, but are not limited to, those mentioned in the presentation and oral remarks, unknown effects on the travel and leisure markets of terrorist activity and any police or military response (including the recent Iraqi war and its aftermath), the unknown effects on those markets of the current SARS epidemic, varying customer demand and competitive considerations, realization of bookings and reservations as actual revenue, inability to sustain price increases or to reduce costs, interest rate and currency value fluctuations, uncertainty of negotiating and completing proposed capital expenditures and acquisitions, adequate sources of capital and acceptability of finance terms, shifting patterns of business travel and tourism and seasonality of demand, adverse local weather conditions, changing global and regional economic conditions, and legislative, regulatory and political developments.  Further information regarding these and other factors is included in the filings by the company and Sea Containers Ltd. with the U.S. Securities and Exchange Commission.