Geopolitical events, the economic slowdown and turmoil in the currency
markets made 2003 an exceptionally difficult year for the travel and
services industries. In this environment, Accor reported profit before tax
of EUR 523 million (down 25.6%), exceeding the announced target of EUR 500
million. The decline, which amounted to 40.6% to EUR 180 million in the
first half, was limited to 14.3% in the second, when profit before tax
totalled EUR 343 million. Despite the decline in sales, margins in the
Hotels and Services businesses edged back only slightly, demonstrating
firm resistance thanks to disciplined cost control. The travel agencies
improved their profitability in a challenging business environment.
Net income, Group share totalled EUR 270 million. Funds from operations
amounted to EUR 847 million, while consolidated debt was reduced by EUR
370 million to EUR 2,462 million.
Shareholders will be asked to approve a dividend of EUR 1.05, unchanged
from the previous year.

Accor also continued to expand in 2003, opening 170 hotels and making
targeted strategic acquisitions in Services.

First-half 2003 was particularly unfavourable, but encouraging signs of
recovery later appeared in the United States, the United Kingdom and, to a
lesser extent, Germany. In France, where the number of international
tourists dropped significantly, the upturn has to be confirmed. Conditions
improved in the Asia-Pacific region in the second half, while demand held
firm in most countries in Africa and South America.

Accor enjoys a number of specific growth drivers, including a unique
network of more than 2,000 hotels in Europe, a privileged position in the
economy segment, expansion projects already underway for nearly 300
hotels, Sofitel’s growing reputation in the international upscale segment
and the worldwide potential of the Services business in human resources
management.

With these strengths, supported by the Group’s training and motivational
policies, as well as by the professionalism and dedication of its
employees, Accor is ready for the expected recovery.
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