Accor has showed a 4.5 percent rise in third-quarter sales. This comes as it shows a slowdown in its U.S. budget business, although it maintained its full-year profit outlook.
“We are very confident for all our businesses in all areas for the last quarter,” Chief Financial Officer Jacques Stern told a conference call with reporters.
Accor’s consolidated revenue rose 7.0% to EUR5,641 million in the first nine months of 2006. At constant scope of consolidation and exchange rates, the like-for-like increase was 6.3%.
Services: The Services business posted a very solid 15.1% like-for-like increase in line with the first half’s 16.3% rise, reflecting a very robust performance across all regions.
Hotels: Hotel revenue rose 6.3% like-for-like in the third quarter, compared with 5.5% in the first half, led by a continued strong performance in Northern Europe (Germany, Benelux and the United Kingdom) and the recovery that is underway in Southern Europe (France, Spain and Italy).
Services and Hotel expansion accounted for 2.9% of third-quarter growth. Asset disposals had a negative impact of 4.4%, reflecting the faster pace of property disposals as part of the Group’s asset management strategy.
The currency impact was a negative 0.8% in third quarter, compared with a positive 2.2% in the first half.
As a result, third-quarter revenue was up by 4.5% as reported, compared with an 8.4% increase in the first half.
Revenue from the Services business rose a sharp 15.1% like-for-like in the third quarter.
Organic growth was driven by extensions of the product range. Examples include the Ticket Emploi Service in Belgium (where like-for-like revenue continued to rise, gaining 20.1% in the third quarter), the Childcare Voucher in the UK (up 11.4%) and the Ticket Car in Mexico (up 31.4%), a solution for controlling and managing the use and maintenance of company cars.
Increasing the penetration rate also added to third-quarter growth. In Argentina, for example, revenue rose by 38.8% like-for-like.
The Services business pursued its external growth strategy, acquiring Serial, Italy’s fourth-largest meal voucher issuer, in the third quarter and India’s Royal Images Direct Marketing and Germany’s Calicado early in the fourth quarter.
Upscale and Midscale Hotels
Revenue growth accelerated in the upscale and midscale segment, rising 7.6% like-for-like in the third quarter, compared with a 5.7% increase in the first half.
The highly favorable first-half trend observed in Northern Europe continued into the third quarter. In Germany, revenue was up 14.0% like-for-like for the period, compared with 10.4% growth in the first six months of the year. In the United Kingdom, revenue rose 12.3% like-for-like in the third quarter, versus a 7.5% increase in the first half.
In Southern Europe, the recovery is underway. Business was lifted in the third quarter by sharp growth in Italy (11.4% compared with 8.0% in the first half) and Spain (14.0% and 9.9%, respectively). In France, revenue increased 4.5% like-for-like in the third quarter, versus a 2.1% rise in the first half.
Economy Hotels Europe
Revenue from economy hotels in Europe rose by 5.8% like-for-like in the third quarter, outpacing the first half’s 4.7%.
As in the upscale and midscale segment, the favorable trend continued in Northern Europe, with like-for-like revenue rising 4.6% in Germany (versus 7.7% in the first half) and gaining a sharp 12.9% in the United Kingdom (0.7% in the first half).
In Southern Europe, the business recovery was reflected in like-for-like third-quarter revenue growth in France (3.6% versus 3.1% in the first half), Spain (13.3% versus 8.9%) and Italy (4.6% versus 4.1%).
Economy Hotels in the US
Revenue from economy hotels in the US rose by 3.7% like-for-like, compared with 6.0% growth in the first half. This trend reflected higher oil prices and high prior-year comparatives due to additional hurricane-related business in the last four months of 2005.
With third-quarter revenue in line with forecasts, Accor is maintaining its objective, announced when its interim results were released, of full-year operating profit before tax and non-recurring items of EUR680-700 million, an increase of more than 20% over 2005.