Q Results. Wolfgang M. Neumann, President & CEO Knut Kleiven, Deputy President & CFO October 22, Sochi

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1 Q Results Wolfgang M. Neumann, President & CEO Knut Kleiven, Deputy President & CFO October 22, Sochi Radisson Blu Resort & Congress Centre, Sochi /

2 In Sochi since 1993; portfolio of 7 hotels in one of Russia's most dynamic destinations Sochi: Winter Olympics in Feb 2014; venue of Formula 1 Grand Prix 2014 and FIFA world cup 2018; Russia s largest resort/beach destination; significant infrastructure investment, promising MICE destination Rezidor in Sochi Hotels Rooms In operation 4 1,200 In pipeline Russia: Lack of international branded supply in key cities, favorable economic outlook, significant growth driver; represents 20% of pipeline Rezidor in Russia Hotels Rooms In operation 22 6,900 In pipeline 21 5,200 2 / Q Results

3 Q3-2013: higher market share and profitability RevPAR +5.9% (L/L) 10% EBITDA Margin +2.6pp 23m EBITDA + 5m 15m EBIT + 7m L/L RevPAR growth of 5.9%, driven by both occupancy and rate Reported RevPAR growth of 0.8%, negatively impacted by the strengthening of the Euro Market share (RGI) up 2.3% August YTD Strict cost control and the terminations of unprofitable leases led to solid conversion of revenue to EBITDA EBITDA up MEUR 5 to MEUR 23 and margin up by 2.6pp to 10.0%. EBIT up MEUR 7 to MEUR 15 and margin up by 3.1pp to 6.7% Cash Flow from operating activities up by MEUR 17 YTD New Asset Management transaction in October Rezidor and Formosa have mutually agreed to end the alliance agreement for Regent 3 / Q Results

4 L/L RevPAR improvement of 5.9% driven by both occupancy and rate growth L/L Occupancy L/L Average Room Rate L/L RevPAR 10% 8% 6% 4% 2% 6.5% 3.0% 2.3% 3.2% 5.6% 5.9% 4.6% 4.2% 5.7% 6.0% 5.9% 0% -2% 4 / Q Results

5 Emerging Markets driving RevPAR led by Russia, the Baltics, South Africa and UAE NORDICS REST OF WESTERN EUROPE 25% L/L Occupancy L/L Average Room Rate L/L RevPAR 25% L/L Occupancy L/L Average Room Rate L/L RevPAR 15% 5% 1.7% 1.8% 0.8% 3.4% 0.7% 8.8% 3.8% 15% 5% 3.1% 2.0% 3.6% 2.2% 1.2% 4.2% 4.8% -5% -5% Q1 Q2 Q3 Q4 Q1 Q2 Q Q1 Q2 Q3 Q4 Q1 Q2 Q EASTERN EUROPE MIDDLE EAST & AFRICA L/L Occupancy L/L Average Room Rate L/L RevPAR L/L Occupancy L/L Average Room Rate L/L RevPAR 25% 15% 5% 12.2% 11.9% 6.1% 5.7% 4.0% 1.2% 8.4% 25% 15% 5% 10.8% 17.1% 13.0% 7.9% 20.5% 13.5% 7.8% -5% -5% Q1 Q2 Q3 Q4 Q1 Q2 Q Q1 Q2 Q3 Q4 Q1 Q2 Q / Q Results

6 Margin improvement on track in pursuit of Route 2015 objectives EBITDAR margin: EBITDAR, MEUR / EBITDAR margin, % Route 2015 gaining momentum Solid progression since Q EBITDAR, MEUR EBITDAR margin %, Rolling 12-months 35% 34% 3 rd party benchmark confirms a leading EBITDAR margin % 32% 31% 20 30% EBITDA margin: 0 Q3 Q4 Q Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q Q2 Q3 29% Steady increase since Q Margin target of 10-12% remains EBITDA, MEUR / EBITDA margin, % Cost optimisation program yields the targeted saving objectives Revenue optimisation in close cooperation with Carlson and Asset Management are the key drivers EBITDA, MEUR EBITDA margin %, Rolling 12-months 8% 6% 4% 2% -20 Q3 Q4 Q Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q Q2 Q3 0% 6 / Q Results

7 Asset Management contributes more than MEUR 5 on the EBITDA improvement in 2013 In MEUR Exit Fee Revenue Impact 2013 EBITDA Impact Exit from seven leases in France Exit from two leases in Sweden Exit from a committed management contract Contract extensions, renovation/restructuring two leases in ROWE Rent restructuring one lease in ROWE Total EBITDA margin impact of 0.7% from above listed Asset Management deals Further progress expected in Q4 7 / Q Results

8 Q Q3 signings emphasize strategic focus on emerging markets SIGNINGS Q Q3 YTD 2013 YTD Hotels Rooms 1,400 2,000 4,300 5,900 Park Inn Pulkovo Airport, St. Petersburg 100% Emerging Markets 100% Fee-based >60% Radisson Blu 2 strategic extensions in Copenhagen with conversion from managed to leased Radisson Blu Hotel Algiers Hydra, Algeria Q3 comments: First hotel in Algeria with the Radisson Blu Algiers Hydra Radisson Blu Hotel, Istanbul Tuzla Key Focus Countries: Saudi Arabia, Turkey and Russia 8 / Q Results

9 Q Lower Q3 openings but our pipeline remains strong OPENINGS Q Q3 YTD 2013 YTD Hotels Rooms ,300 2,900 Park Inn by Radisson Astana, Kazakhstan >90% Emerging Markets >90% Fee based >55% Radisson Blu Radisson Blu Resort & Thalasso, Hammamet, Tunisia Q3 comments: Park Inn by Radisson Astana, Kazakhstan Radisson Blu Resort & Thalasso, Hammamet, Tunisia 9 / Q Results

10 Selected Future Openings ( ) Radisson Blu Rooms Park Inn by Radisson Rooms Istanbul Tuzla, Turkey 249 Sochi, Russia 508 Istanbul Şişli, Turkey 291 Okoume Palace Libreville, Gabon 180 Mammy Yoko Freetown, Sierra Leone 171 Chelyabinsk, Russia 211 Oslo Alna, Norway 142 Sheremetyevo Airport Moscow, Russia 391 Sohar, Oman 179 Belgrade, Serbia 237 Göttingen, Germany 114 Petrozavodsk, Russia 180 Yaroslavl, Russia 167 Pulkovo Airport St Petersburg, Russia 200 Lund, Sweden 190 Libreville, Gabon 140 Abeokuta, Nigeria 173 Istanbul Ataturk Airport, Turkey 144 Troyitska Kyiv, Ukraine 199 Oslo Alna, Norway 206 Balanced openings between the brands Continued focus on Emerging Markets & key focus countries (Turkey, Russia) Only management and franchise contracts /

11 Financial Update Knut Kleiven, Deputy President & CFO Radisson Blu Hotel, Istanbul Pera /

12 Strong improvement in profitability MEUR Q Q3 YTD 2013 YTD Revenue EBITDAR EBITDAR Margin 35.9% 34.3% 34.7% 32.5% EBITDA EBITDA Margin 10.0% 7.4% 8.0% 5.2% EBIT EBIT Margin 6.7% 3.6% 4.6% 1.1% Tax NET RESULTS Q3 Highlights: -10 MEUR in revenue: Negative FX impact and exit of 9 leases +1.6pp in EBITDAR margin: Cost reduction launched in Q3 +2.6pp in EBITDA margin: Exit of 9 leases Rent adjustment and provisions from one onerous contract in Q3 FX impact +3.1pp EBIT margin: Lower write-downs of fixed assets in 2013 vs High tax rate due to losses which are not capitalized 12 / Q Results

13 Healthy flow through in the L/L portfolio Q vs Q3- Reported Change FX Hotel Exits New Hotels One-offs Change in Marketing Net Spend Revenue EBITDAR EBITDA EBIT L/L YTD-2013 vs YTD- Revenue EBITDAR EBITDA EBIT Q3 comments: FX had a negative impact of MEUR 9.3 on revenue and MEUR 1.0 on EBITDA Hotel exits had a negative impact on revenue, but a small positive impact on EBIT One-offs in relate to a rent adjustment, consultancy costs and a provision for an onerous management contract. Furthermore, write-downs of fixed assets were MEUR 0.8 higher in Q3 compared to Q / Q Results

14 Q3 Leased Business Substantial EBIT improvement with ROWE turning positive Leased Revenue, MEUR Nordics: Revenue down due to FX and 2 leases converted to franchise contracts EBIT margin up 1.7 pp to 6.9% mainly explained by a MEUR 1.7 rent adjustment in NO RoWE Total Q Q3 EBIT, MEUR Rest of Western Europe: Revenue down due to FX and the exit of 7 leases EBIT margin up 1.9 pp to 0.3%, due to exits and lower write-downs compared to NO RoWE Total Q Q / Q Results

15 Q3 Fee Business Solid performance despite negative FX impact Fee Revenue, MEUR 35 Eastern Europe: Fee revenue down due to FX, one hotel switching to a franchise contract EBIT margin down by 7.7 pp to 68.6% due to FX and increased provisions for bad debt NO RoWE EE MEAO Total Q Q3 EBIT, MEUR 20 Middle East, Africa & Others: 15 Fee revenue up due to new hotels and a positive RevPAR improvement EBIT margin up by 3.4 pp to 64.9% 10 5 Q Q3 0 NO RoWE EE MEAO Total 15 / Q Results

16 Strong development in cash flow from operating activities 2013 vs Q Q3 YTD 2013 YTD Cash flow before working capital Change in working capital Cash flow from operating activities Investments Free Cash Flow Strong focus on upgrading leased hotels Refers mainly to refurbishment of guest rooms To enhance our competitive position Investments YTD 2013 In MEUR Radisson Blu, Trondheim -6.4 Radisson Blu, Manchester Airport -5.1 Park Inn Heathrow -2.8 Radisson Blu Arlandia, Stockholm -1.9 Radisson Blu SkyCity, Stockholm -1.7 Other / Q Results

17 2.8pp EBITDA margin expansion YTD in line with Route 2015 goals FOCUS AREAS EBITDA MARGIN UPLIFT FINANCIAL TARGETS Revenue initiatives Fee based room growth Cost savings Rezidor s Initiatives 6-8% Profitability Target Balance Sheet EBITDA margin of 12% over a business cycle Small positive average net cash position Asset management / deleveraging CapEx + Asset Management Dividend Policy Approximately one third of annual after-tax income to be distributed to shareholders + Market Recovery over and above inflation Assumes RevPAR growth covers inflation 17 / Q Results

18 Q&A Park Inn by Radisson Amsterdam Airport Schiphol /