NINE MONTHS RESULTS 2015

Transcription

1 NINE MONTHS RESULTS 2015

2 Meliá Hacienda del Conde Tenerife. Spain meliahotelsinternational.com

3 NINE MONTHS 2015 (Million Euros) sep-15 sep-14 REVENUES 1.324, ,7 15% EBITDAR 365,2 298,1 23% EBITDA 255,2 198,6 28% EBIT 175,7 124,7 41% TOTAL FINANCIAL PROFIT (LOSS) (48,8) (70,1) 30% EARNINGS BEFORE TAXES 124,0 49,8 149% RESULT FROM CONTINUING OPERATIONS 84,9 37,0 129% RESULTS FROM DISCONTINUING OPERATIONS -26,0-0, % NET PROFIT 59,0 36,5 61% NET PROFIT ATTRIBUTABLE 52,9 34,9 51% EBITDA ex capital gains 212,6 183,5 16% Operational Ratios REVPAR 69,2 62,1 11% EBITDA MARGIN 19,3% 17,2% 209 bp EBITDA MARGIN (ex - capital gains) 16,6% 16,1% 50 bp Strong performance of the most recurrent lines on the income statement allows a Result from Continuing Operations that doubled versus the same period last year Business performance The strengthening of the upwards trend in the lodging industry and Meliá s numerous initiatives to secure its market leadership generate excellent results in Mediterranean and a healthy recovery in city hotels in Spain. Hotel business soundness is demonstrated by a 10.7% RevPAR increase, 85% explained by prices. The Company is specially proud of the enhanced evolution of some flagship properties which gradually achieve new highs such as the Meliá Milano, ME Milano Il Duca or the ME London or the ME Ibiza and GM Palacio de Isora in the resort business. Melia.com remains as a key pillar in Meliá s yield management strategy accounting up to September more than 25% growth. The Income Statement is also reinforced by the positive impact of exchange rates and stable costs on a like-for-like basis leading to EBITDA of million euros, a 28.5% increase vs 2014, while the EBITDA margin improved by 209 basis points showing growth all business and regions. Net Profit Attributable increased by 51% in spite of the accounting of a 28.6 million euros impairment registered in June Net profit attributable excluding the impairment would have increased by 133%. Meliá has been included in the Spanish MERCO talent 2015 as the first Company in the tourist sector. Debt Management Meliá continues making progress within the balance sheet strengthening. Financially speaking, the positive cash flow generation allowed net debt to reach 840 mn euros, 29 Mn decrease compared to June 15. Emphasis is given to the important improvement in financial ratios, maintaining the 2015 commitment of a Net Debt/Ebitda (ex-capital gains) ratio below 3.5x. Also of note is the EBITDA/Net Interest Expense ratio performance after efforts to reduce financial expenses. Development strategy During 3Q Meliá has reinforced its position as a leading management company in the international hotel industry and continued to expand in the fastest-growing markets but also in traditional markets, emphasizing the opening of 2 new hotels: the Meliá Campione (Italy) and the Meliá Danang (Vietnam). At quarter end, the Meliá worldwide development pipeline reached 63 hotels with more than rooms, the largest pipeline in our Company s history, and all with minimum amounts of capital and no acquisitions. During the last quarter highlighted the signature of the Meliá Frankfurt, the Melia & Innside Iskandaar (Malaysia) and the recently signed Innside Bandung (Indonesia) while more than ever, Meliá faces an important opening calendar with the opening of relevant hotels such as the ME Miami, the Innside Nueva York or the Meliá Jamaica. Highlights the recently signature of an agreement with one of the largest business conglomerates in Thailand, TCC Land Asset World, to open its 3 first hotels in Thailand and provide a further boost to growth in Asia. Nowmore than ever, Outlook 2015 The positive trend in bookings to date points towards a very positive final quarter for 2015 for the Caribbean and Canary Islands, especially for Christmas and New Year. Taking into account the weight of 3Q and the bookings for 4Q, Meliá upgrade its guidance to a double digit growth in RevPAR for the full year 2015, with more than two thirds of this explained by price increases. 3

4 1. REPORT ON HOTEL OPERATIONS: EVOLUTION PER AREA Up to September, total RevPAR increased by 10.7% explained by a 9.3% improvement of prices. AMERICA RevPAR for owned and leased hotels in the Americas grew by 4.8%, with ARR increasing by 3.8% and occupancy by 1%. RevPAR was negatively influenced by the change to the SIMADI exchange rate of the Venezuelan Bolivar. The RevPAR in America ex-venezuela increased by +28.8%; 5.4% in US dollars. By area: The best performance was seen in Mexico, where RevPAR increased by 7.4% in USD, highlighting the performance of the Paradisus Cancun which since rebranding has improved total revenues around 30%. Playa del Carmen resorts also registered good figures, expecting to reach cruiser speed in 2016 (versus 36 million dollars forecast for 2015). RevPAR in the Dominican Republic improved by 5.3% in dollar terms, 100% explained by price increases, very good numbers taking into consideration that the destination is being affected by the weakness of the Russian feeder market that versus last year is decreasing around 80%. The achievements in the region are remarkable taking into consideration that the local market is affected by the appreciation of the US dollar that in some way or other involves a greater willingness to travel to foreign destinations (as has been seen in Spain in the summer season). In managed hotels there was a positive performance at the Meliá Nassau, which is doubling GOP after renovation and a change to an all-inclusive experience. EMEA (+PREMIUM) RevPAR for owned and leased hotels grew by +10.3%, almost entirely explained by improved ARR. On the back of such strong evolution also lies Meliá s expertise in the leisure travel segment which is allowing city hotels to improve results via leisure travelers. Recall that from this year onwards, EMEA also includes PREMIUM EUROPE. The most important achievements in this area are: Italy (RevPAR 9M %) Meliá had a record performance in Italy in the third quarter of the year with all of the Italian properties contributing to this historical year. Meliá Milano is one of the foundations of the performance in Italy, with revenue growth in the third quarter of +48%. The EXPO 2015 event has generated a major boost in demand for the city, but this has also been accompanied by improvements in the hotel, a focus on The Level rooms, and an outstanding performance in sales and revenue management. Also of note are the extraordinary figures in the ME Milan, with a huge impact in the city since its opening in May 2015, and impressive rates for an opening year (280 in 3Q). No less impressive is the performance in Rome. The Gran Meliá Rome shows accumulated revenue growth YTD of +13%, and was particularly successful in the third quarter. Germany (RevPAR 9M %) Even though 2015 is a year in which there are not a large number of trade fairs, Germany continues to see very significant growth compared to It is important to highlight the magnificent performance of the Innside Wolfsburg (RevPAR +45%), the excellent performance of the Berlin hotels (with an increase in RevPAR around 7-8% in every hotel), and a very impressive performance from the Tryp Munchen. 4

5 PREMIUM SPAIN (RevPAR 9M %) Company strategy in the luxury market continues to generate a strong performance driven by price increases. The third quarter was key to confirming the very favourable impression created in the second quarter by Meliá luxury resort hotels, and all of them have responded to this challenge. Revenue per available room in the third quarter versus last year is outstanding, noting the impressive performance of the ME Ibiza (+38%) which was a flagship for Meliá Hotels International in the summer season, with an average rate in the third quarter of over 500 euros per room. The Gran Melia Palacio de Isora (+12%), Gran Melia Don Pepe (+8%), and the Meliá de Mar (+9%) also registered excellent figures. This positive trend does not affect only resort hotels. Urban properties have also contributed with solid growth, such as the Gran Melia Colon (RevPAR +21%), Gran Melia Victoria (+8%) Meliá Barcelona Sarriá (+11%), or the Gran Melia Fenix (+6%). Most of the Premium hotel growth comes from improved sales through our own direct channels together with increased penetration in the major luxury travel networks. France (RevPAR 9M %. Excluding La Defense -2.1%) Strong performance of the new Meliá Paris La Defense, with very positive results in terms of revenue, exceeding the targets defined in the business plan and generating a strong position in all segments, especially among online customers. The rest of the Paris hotels also continue to enjoy a good performance although they have seen a slight contraction in demand. UK (RevPAR +4.2%) The Euro-Pound exchange rate helped to generate a positive performance in the UK in terms of RevPAR. Meliá is very proud of the positive trends in the ME London. After a first half of the year with positive but contained growth, the hotel has recovered in the third quarter (RevPAR +25%), almost all based on average rate growth. One of the keys to this success is the growth of sales through melia.com, making the revenue increase more profitable and sustainable. It is also very interesting to see how the Innside Manchester, after only a few months of operation, is also becoming a very important hotel in the destination, and positive results are becoming more visible as budget targets are exceeded for September and October. MEDITERRANEAN From a macroeconomic perspective, the summer season in Spain has seen a sharp increase in tourism demand, driven by increased travel by the Spanish and intensified growth in foreign demand, with most of the main macro conditions and exogenous factors in favour - political instability in competing countries, decreasing oil prices, and the favourable effect of the appreciation of the dollar and pound sterling, among others. The effect of the depreciation of the euro compared to summer 2014 is clearly reflected in the higher number of tourist arrivals from the UK and USA. On the negative side, the summer season suffered from the slowdown in terms of arrivals from the Russian market which impacted some resorts. Specifically with regard to Meliá, the Company is proud of the increasing value generated through innovation in the guest experience, a key factor differentiating Company hotels from competitors. The Company is working hard to position the hotels as best in class in the industry, adding innovative concepts in food service, leisure, entertainment and wellbeing. The Company understands that this has been a significant driver for the good performance of the Mediterranean resorts, where RevPAR increased by 6.4% up to nine months, 100% explained by price increases. 5

6 Some examples of this successful strategy are the recently rebranded and refurbished Meliá Cala Galdana (RevPAR +49%), Sol House Aloha (+38%), Sol Beach House Menorca (+27%) or Sol House Trinidad (RevPAR +22%) which have all achieved a new market positioning which has changed their customer segmentation and allowed significant price increases. In 2015, advanced bookings were stronger than the previous year, although the strong performance of the last-minute market should also be noted (specially the Spanish and Portuguese). This situation generated excellent results in almost all regions, especially the Balearic Islands, with Ibiza and Minorca as the most popular and trendy destinations. In Majorca the changing customer segmentation has continued to bear fruits for Calvià Beach. It should also be taken into consideration that the lower contribution of this region to consolidated results is due to the sale last June of 6 hotels to Starwood Capital. The Company now operates the hotels through a management contract which has implied the no consolidation at the EBITDA level of approximately 14 million euros according 2014 figures (net of management fees). SPAIN RevPAR in Spain increased 11.2%. Such positive results were possible due to the homogeneous recovery across all customer segments -both Leisure and Business-, that makes the Company maintains its leadership in resorts but also in bleisure -urban leisure- destinations; and the influence of Meliá s outbound sales strategy which led the region increase sales from EMEA near 50%. Top headlines for each area are as follows: Madrid In 2015 Madrid is seeing a natural increase in demand from both leisure and business travellers. Regarding the evolution of hotels near the airport, 2015 is showing a stronger performance thanks to an increased number of lay-overs. In the third quarter, especially in September, the city suffered from strong comparables given that in 2014 Madrid hosted important events such as major Congresses (such as the ESMO European Society of Medical Oncology- congress in September 2014) and the visit of the Pope. Of note is an improved performance in the Group travel segment. Hotels in northern Spain In the third quarter, the northern region has hosted no relevant events that have had significant impact on the hotel industry compared to the previous year. However, we must bear in mind that the mild weather (with repeated heat waves, especially in July) contributed to a stronger preference for vacations in the region. Bilbao, for instance, had its best summer season ever. Overall, in 3Q the individual traveller segment has been the key revenue driver. Hotels in southern Spain Tier II resort destinations showed a strong performance in the summer season with price improvements in all destinations and in every month. Of note is the positive evolution of cities such as Granada, Cadiz or Seville. Hotels in eastern Spain A positive quarter in the east of Spain, in Catalonia, Valencia and Palma de Mallorca. Barcelona suffered in September due to a lack of important congresses in the city, while in Palma certain hotels suffered from a lack of air crews. However the implementation of successful yield management strategies allowed prices to be maximised during occupancy peaks, allowing hotels to achieve better results than in Once again of note is the role of melia.com in optimising pricing strategies. Hotel renovations and rebranding (e.g. the Innside Palma) also contributed positively. 6

7 HOTEL STATISTICS OWNED & LEASED 15 / 14 (in Euros) 9M2015 % Occupancy RevPAR A.R.R. Available rooms AMERICA ,9% 87,3 118, ,4 % o/ ,0% 4,8% 3,8% 5,1% ,2% 83,3 113, ,4 EMEA ,0% 105,3 144, ,9 % o/ ,4% 10,3% 9,9% 8,0% ,7% 95,5 131, ,2 MEDITERRANEAN ,2% 54,8 74, ,3-0,3% 6,4% 6,7% -13,8% ,4% 51,4 70, ,2 SPAIN ,5% 55,3 80, ,0 % o/ ,5% 11,2% 6,5% 0,69% ,6% 49,8 75, ,0 TOTAL ,9% 75,5 105, ,6 % o/ ,3% 10,7% 9,3% -0,6% ,0% 68,2 96, ,8 HOTEL REVENUES SPLIT OWNED & LEASED 15 / 14 (Million Euros)* Room Revenues F&B and Other Total Revenues AMERICA ,9 176,1 298,1 % o/ ,5% 23,9% 17,1% ,3 142,2 254,6 EMEA ,9 115,2 383,0 % o/ ,1% 8,6% 15,8% ,8 106,1 330,9 MEDITERRANEAN ,5 62,0 177,5 % o/ ,2% -10,6% -9,1% ,9 69,4 195,2 SPAIN ,2 54,1 192,3 % o/ ,0% 5,2% 10,0% ,4 51,5 174,9 TOTAL ,5 407, ,0 % o/ ,7% 10,4% 10,0% ,4 369,2 955,6 * Figures do not include Gran Meliá Puerto Rico 7

8 MANAGEMENT MODEL AT MELIÁ HOTELS INTERNATIONAL Total Fee Revenues including owned, leased and third party hotels, increased near 12 million euros compared Management fees from third parties totalled 43.1 million euros, 6.1 million euros higher than in The difference is mainly explained by the increase in fees from Cuba (+ 3.4 million euros) and the Mediterranean region (3.1 million euros) mainly explained by the contribution of the hotels sold to Starwood Capital (previously owned hotels). Positive numbers are compensated by the slower evolution of Brazil due to the macroeconomic situation in the country. The evolution of America up to September, excluding Brazil and Cuba, was flat, with the better performance of Meliá Nassau neutralising the impact of the closure of the ME Cabo and Meliá Cabo Real in Mexico which are undergoing refurbishment after the impact of the Odile hurricane in September Million Euros 9M2015 9M2014 Total Rev. 182,4 161,4 Fees Owned & Leased hotels 63,8 58,1 Management Fees Third Parties 43,1 37,0 Other Revenues 75,5 66,3 OTHER HOTEL BUSINESS The Other Hotel Business item basically includes the contribution of casinos, golf facilities and Sol Caribe Tours, a tour operator based in Latin America. Compared with the same period last year, the better performance is linked to the higher contribution from Sol Caribe Tours due to greater revenues, combined with the impact of the appreciation of the US dollar and the greater contribution of the golf business, especially in the Meliá Villaitana and the contribution of the René Egli windsurf center in Fuerteventura (next to the Meliá Gorriones). 8 Meliá Campione Como, Milano. Italy

9 HOTEL BUSINESS OUTLOOK Overall, the outlook for the last quarter of 2015 shows that the fundamentals of the cycle remain very solid. On the other hand, the strong performance of the Melia hotel business in the third quarter, above Company s initial expectations, this makes the Company feel comfortable upgrading the RevPAR goal for 2015 reaching a double digit growth mainly explained by price increases. In 4Q the main highlights are the following: - In the Mediterranean division, the reservations on the books in the Canary Islands are above those of the previous year which was affected by political unrest in competing destinations. On the other hand, 4Q will also be impacted by the closure of some rooms that are being refurbished. - In Spanish city hotels the on-the-books sales for the next 3 months are almost 5 million euros higher compared to the previous year. In Madrid, October will see a strong performance helped by the hosting of some congresses in the city, while in December the public holiday period at the beginning of the month ( Puente de la Constitucion ) is also generating positive numbers. The evolution of hotels during the General Election period will need to be taken into account as it may penalize hotel performance during that weekend. Regarding secondary cities, highlights are the strong prospects for Seville -strong in congresses-, Malaga -with the hosting of a basketball event- and Almeria. - In EMEA, growth expectations for Europe are maintained. Leisure trends remain strong as robust international inbound travel and greater local demand drive strong transient business. - In the international arena, the Americas shows a good pace for year-end and there is also the opening of the Meliá Jamaica in December. Going into 2016, generally speaking, the analysts consensus is an optimistic forecasts for growth in economic activity and improvement in private consumption in major feeder markets for Spain, favouring higher levels of demand and tourist spending in the Mediterranean and Spain. In the Americas, we also expect good figures on the back of strong demand dynamics and growing group business. Although continued pressure is expected from softening European inbound travel, decreases should be mitigated by continued growth in inbound travel from other markets. Additionally, there is also the opening of the Meliá Jamaica in December 2015, Melia s bet in the Anglo-Saxon Caribbean after the opening of the Meliá Nassau, and the ME Miami and the Innside Nueva York in January 2016, representing a major step forward in the positioning of Meliá Hotels International in the U.S. market. Also in the Americas stress the importance of Cuba as another key market where the Company maintains its focus to maintain and even intensify Melia s leadership. In the Asia-Pacific region, we continue to expect growth linked to the contribution of new hotel incorporations considering that the current pipeline includes the opening of 8 hotels, being the most active market in terms of new openings in Additionally should be shighlighted the signature last week of an strategic agreement with TCC Land Asset World, Thailand s leading business group, to open three hotels over the next three years. The agreement also foresees future growth both in Thailand and other countries thanks to the synergies and service and hospitality philosophy and culture that both companies share. Within this framework the two companies will develop three hotels: a Sol Beach House in the luxury resort of Koh Samui, a luxury lifestyle hotel under the ME by Meliá brand in Bangkok; and a luxury all-inclusive Paradisus resort in one of the top holiday destinations in Thailand, yet to be announced. 9

10 OTHER BUSINESS AND OVERHEADS REAL ESTATE Up to September total capital gains reached 42.5 million euros (versus 15.1 million Euros in 9M2014) During the third quarter the Company has not sold any assets. However, in October the Company reported a Relevant Fact to the Spanish Securities and Exchange Commission in which the Company reported the sale of the 875-room Calas de Mallorca resort, located in Majorca (Spain). The transaction amounted to 23.6 million euros in cash and generated capital gains of approximately 4 million euros which will be included in fourth quarter 2015 results. Meliá Hotels International will continue managing the hotel under a variable lease contract. It should be recalled that last June 2015 the Company sold 6 resort hotels in to a new Joint Venture Company owned 80% by a subsidiary of the Starwood Group and 20% by Meliá. The most significant aspects of the transaction were its million euros sale price (net cash of approx. 150 Mn) and capital gains at the EBITDA level of 40.1 million euros. The two transactions mentioned above allow the Company to achieve its asset disposal commitment for a minimum of 200 million euros in 2015, enabling the Company to reduce net debt, one on its main goals and one of the most important guidelines in the Meliá Strategic Plan Both transactions should be included in a framework that will allow the increase of the Meliá portfolio equity value in Joint Ventures and use them as leverage to enhance portfolio quality. Regarding the most recent asset valuation made last quarter by Jones Lang La Salle, the Company informs that the valuation of the some properties included under the Equity Method within the Melia Hotels portfolio is still pending to be concluded over the next few weeks. In any case, it will at least reach the 430 million euro valuation released last July 2015 (that should be added to the 3,125 million euro value of the assets under full consolidation). CLUB MELIA Sales at Club Meliá in the third quarter grew by 13.6 million euros helped by the appreciation of the US dollar compared to the euro, given that almost all of the Club Meliá revenues are in dollars. The number of weeks sold were slightly below previous year, in part due to the slowdown of sales in Puerto Rico linked to the asset disposal process which penalizes Club Meliá sales, and also due to sales reductions to customers from some emerging markets in order to avoid country risk, such as Argentina, Brazil or Venezuela. It is also important to mention that 2014 was a record-year in terms of sales in Dominican Republic, which represents near 65% of total sales in the Club Meliá, therefore 2015 is also being impacted due to this strong comparable. Regarding the activity in Mexico, the strong appreciation of the US dollar versus the Mexican Peso is strongly affecting the local market (which is the main client in Mexico) given that the payment currency is in dollars. To conclude with the evolution of the Club, stress that during the third quarter the Company has closed operations in Spain. While the Club Meliá will continue attending the existing clients, the Company will not sell any additional units in Spain, something that will have a greater impact during the fourth quarter of On the positive side the new higher-margin Destinations product and upgrade activity has helped to compensate the slowdown in the number of weeks sold. OVERHEAD DEPARTMENTS Recall that this item only includes the overheads in Meliá Hotels International. Regarding the evolution of overheads, remark that greater income versus last year is linked with re-invoicing while at the ebitda level the impact is minimum. 10

11 Meliá Da Nang Vietnam 11

12 INCOME STATEMENTS Revenues Total revenues increased by 14.6%. Hotel revenues increased by 11.5% thanks to an 10.7% improvement in RevPAR, 87% of which is explained by an increase in the Average Room Rate. Club Meliá also reported good figures with 17.1% growth. The contribution of the Real Estate division increased by million euros compared with the same period last year, due to higher capital gains from asset disposals. Excluding changes in the scope, the impact of the appreciation of the USD against the EUR, capital gains from asset disposals, the impact of the change to SIMADI exchange rate of the Venezuelan Bolivar, and some other extraordinary items, total revenues would have increased by 7.7% Operating Expenses Raw materials, Personnel expenses and Other operating expenses increased by 11.4%, 4.1% and 18.7% respectively, affected by the changes in the perimeter, the appreciation of the USD, and the devaluation of the Bolivar. On a like-forlike basis, the evolution of expenses would be as follows: Raw materials +5.3%, Personnel expenses +3.2% and Other operating expenses +8.3%. Rental expenses grew by 10.6%. It should be noted that during the 9 months 2014 the Company reduced the existing onerous contracts provision by 5.5 million euros, this year the reduction was 0.5 million euros, so on a comparable basis the increase was +5.2% due to: The incorporation of the Innside Wolfsburg, the Tryp Estepona Valle Romano, Meliá La Defense, the Innside Manchester and the ME Milan. The change in the management contract of the hotels Meliá Barcelona Sky, the Sol Aloha Costa del Sol, Meliá Jardines del Teide and Meliá Orlando. Partially offset by the renegotiation of some leases. EBITDA All the above mentioned factors allowed Meliá to register an improvement in EBITDA of +28.5% (Ebitda without capital gains +15.9% compared with the 9 months 2014). The Depreciations & Amortizacions line increased 5.6 million euros also linked to the appreciation of the US dollar. At the Profit/(Loss) from Associates and JV level, the better results is explained by the better results of Evertmel (resort complex in Magalluf - Mallorca), Altavista Hotelera (Meliá Barcelona Sky) and the the Meliá Castilla, as well as the contribution of the hotels sold to Starwood Group in June To end this chapter, of note is the impact of the Discontinuing Operations which registered losses of 26 million euros. The economic situation in Puerto Rico that has had its Government to fail in the payment of its obligation is making more difficult to find active stakeholders in the transaction, so taking into consideration principles of prudence, the Company performed a new appraisal of its Puerto Rico hotel generating a new impairment in 2015 amounting to 28.6 million euros. 12

13 (Million Euros) September 2015 Revenues Split: Total HOTELS 1.286,8 Management Model 182,4 Hotel Business Owned & Leased 1.051,0 Other Hotel Business 53,3 Real Estate Revenues 57,8 Club Meliá Revenues 93,0 Overheads 90,2 Total Revenues Aggregated 1.527,7 Eliminations on consolidation -203,4 Total Consolidate Revenues 1.324,3 Raw Materials -162,1 Personnel expenses -345,4 Other operating expenses -451,5 Total Operating Expenses -959,1 EBITDAR 365,2 Rental expenses -110,0 EBITDA 255,2 Depreciation and amortisation -79,5 EBIT (OPERATING PROFIT) 175,7 Financial Expense -54,9 Other Financial Results 4,1 Exchange Rate Differences 2,0 Total financial profit/(loss) -48,8 Profit / (loss) from Associates and JV -2,9 Profit/(loss) from ordinary activities 124,0 Extraordinary profit/(loss) 0,0 Profit before taxes and minorities 124,0 Taxes Continuing operations Discontinued Operations Group net profit/(loss) Minorities Profit/(loss) of the parent company -39,1 84,9-26,0 59,0 6,1 52,9 13

14 FINANCIAL RESULTS AND DEBT FINANCIAL RESULTS Financial results improved by 30.4% compared to the previous year due to the net effect of: a) Reduction in Bank financing of -31.9Mn due to the lower gross debt and improved average interest rate compared to the 9 Months b) Slighly lower income in Other financial results of 0.4 Mn, mainly due to lower financial expenses related to the restatement of accounts in Venezuela due to the adjustment for hyperinflation, offset by lower interest income from associates due to the reduction / capitalization of loans and the reduction of interest on deposits. c) Mn in the Exchange rate differences, motivated mainly by the devaluation of the Bolivar in Venezuela and the Brazilian Real, partially offset by the appreciation of the USD. Regarding the evolution of the average cost of debt in the first nine months, the Company has reduced its average financial cost to 4.4% (compared to 5.9% in the 9 Months 2014). (thousands euros) 9M M 2014 Exchange differences Borrowings (54.857) (86.748) Interest Capital Markets (32,576) (39.913) Interest bank loans and others (22.281) (46.835) Other financial incomes Net Financial Income (48.816) (70.115) DEBT Company net debt decreased compared to December 2014 by 146.6Mn, reaching 840.3Mn, largely explained by the asset disposals and by the positive performance of the free cash flow generation, partially offset by the purchase of 58.5% of the company that owns Melia Milano which was in the hands of third parties. The Company maintains its guidance for the year end, where the ratio of net debt to EBITDA excluding capital gains will be below 3.5 times. The debt maturity profile is as follows, excluding credit facilities: Bank Loans & Others Capital Markets million Euros Million uros 14 no incluye pólizas de crédito

15 MELIÁ ON THE STOCK MARKET The stock price rose by +5.1% during the third quarter of The Ibex Medium Cap and the Ibex 35 decreased by -5.2% and -11.2% respectively. For the 9 months 2015, the stock price rose by +40,5% /31/2014 1/22/2015 2/12/2015 3/5/2015 3/26/2015 4/20/2015 5/12/2015 6/2/2015 6/23/2015 7/14/2015 8/4/2015 8/25/2015 9/15/ Volume Price 1Q2015 2Q2015 3Q Average daily volume (thousands shares) 1.303,61 958,34 751, ,67 Meliá performance 30% 3% 5% 40% Ibex Med Cap performance 21% -6% -5% 8% Ibex 35 performance 12% -7% -11% -7% Source: Blomberg NOTE: Meliá s shares are listed on the IBEX Medium Cap and FTSE4Good Ibex index. On January 2015, 14,3Mn newly-issued ordinary shares to attend partially the conversion of the convertible bond were admitted to trading to the Spanish Stock Exchanges. Investor Relations Meliá Hotels International Contact details: Stéphane Baos Stephane.baos@melia.com Laura Alsina: laura.alsina@melia.com Meliá Doha Qatar 15