Corporate Presentation - Hoteles City Express July 2021
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Corporate Presentation
Hoteles City Express
July 2021
1
Mexico’s Hospitality Market Update 2
Tourism Contributes with 9% of Mexico’s GDP
Tourism GDP and Total GDP Historical Evolution
Annual Growth (%) Total GDP Tourism GDP
5.2 5.3
3.8 3.3 3.3 3.9 3.9 4.0
3.2 2.7 3.3 3.0 2.7
2.0 2.1 2.5 2.3 2.1 2.0 2.4
1.2 1.2 1.1 1.1 1.0 1.0
0.6
-0.1
-3.1
-6.0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Tourism Expenditure as Percentage of Total GDP
% of Total GDP 9.2%
8.7% 8.7%
8.6% 8.6% 8.6%
8.5% 8.5% 8.5% 8.5%
8.4% 8.4%
8.4%
8.3%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Source: Elaboration and seasonality adjustments by Banco de México with respect to data from the Tourism Ministry of the Federal Government and Airports and Auxiliary Services.
3
Tourism Strength Derived From Both Domestic
Momentum and International Visitors
International Tourist Arrivals and Currency Surplus
46.0 45.03
41.4 25.0
41.0 39.3
35.1
36.0 31.2 20.0
31.0 28.6
26
26.0 21.6 15.0
19.3 20.5 19.9 20.7 20.8 20.8
21.0
16.0 10.0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2015 2016 2017 2018 2019
Tourists (Millions of Visitors) (left) Currency Received (USD Billion) (right)
Tourism Expenditure by Origin Hotel Occupancy Index
2019 Base 2008 (2008 = 100)
North 160
Center North
13% 140
Center
International Tourists
South +8.9%
Domestic Tourism 120
87% 100
80
60
2008 2009 2010 2011 2012 2013 2014 2015 2016
4
Hospitality Industry with Consolidation
Opportunities Due to Fragmentation
Breakdown of Independent and Chained Hotels Hotel Rooms per Thousand Inhabitants
2019 (% of Rooms) Independent Chained 16
12 12 11
100 100 100 9 8 7 7
19 18 6
66 4 4 3 3 3
82 82
34
Costa Rica
Spain
France
Turkey
USA
UK
México
Canada
Germany
Italy
Australia
Thailand
New Zealand
Puerto Rico
United States Brasil Mexico
Hotel Rooms in Mexico by Number of Stars Hotel Supply Growth
2019 Thousand rooms 5 Stars 2 to 4 Stars 1 Star or less
Mainly independent, family operated, non-
standardized hotels subject to substitution
210,016 222,668
+3.0%
174,746 795 808 836
737 769
150,545 638 651 661 672 692
624
78,325
5 Stars 4 Stars 3 Stars 2 Stars Others 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
48% of Total Rooms in Mexico
Source: INEGI, Ministry of Tourism, Ministry of Communications and Transportation, JLL, PwC, Euromonitor.
5
Hospitality Market Players in Mexico
Hotel Asset Owners OTAs Size of logo represents
the importance on each
category
Brand Leasers
Sharing Economy
Hotel Developers
Hotel Operators
6
Hoteles City Express Today 7
We Are the Fastest Growing Hotel Chain in
Mexico…
Historical Chain Growth
Installed Rooms
17,988
Fastest developer in the region with 1 hotel 16,789 17,227 17,514
opening every 5.9 weeks on average 15,228
+21.0% 13,702
11,944
10,929
9,326
8,092
6,973
4,991 5,562
3,836
2,173 2,850
586 1,061 1,542
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Number of Hotels
5 10 15 20 26 35 45 50 62 71 82 96 106 123 135 148 152 154 157
Opening first Launch of Launch of First international Launch of
Initial Public Launch of Equity
hotel in San Jose,
Offering Follow-On
Costa Rica
8
With One Brand and Five Successful Products to
Serve our Market Segment
Description • Flagship Brand • City Express • Budget segment • Extended stay • City Express
• Essential product located in brand brand product within city
amenities Premium locations • Same quality • Apartment-style downtowns with
• Economy segment within smaller layout Premium decor
rooms
Average Room Size 23 m2 (248 ft2) 23 m2 (248 ft2) 17 m2 (183 ft2) 30 m2 (323 ft2) 23 m2 (248 ft2)
Average Daily Rate MXN $ 1,600 –
MXN $650 – $1,750 MXN $950 – $2,900 MXN $550 – $1,100 MXN $950 – $2,400
(ADR) $3,000
Rooms per Hotel 100 – 150 70 – 150 105 – 134 26 – 120 35 – 80
# of Hotels 91 26 22 12 3
# of Rooms 10,668 3,490 2,467 721 217
Market Segments Target ADR (MXN) Room Distribution by Brand
> $1,700 4%
1%
14%
$950 - $1,700
20% 61%
$650 - $950
9
…And Significant Diversification Across
Geographies and Countries
Maquila Exports and
San José,
Logistics Corridor
Costa Rica
Mining Corridor Colombia
Energy,
Petrochemical and
Export Corridor
USMCA Agricultural
Export Corridor
Chile
USMCA Industrial,
Manufacturing, Logistics
and Export Corridors
Hotels in Operation 2021 Pipeline
10Reflected in the Build Up of the Largest Branded
Inventory in Mexico
Number of Hotels by Chain in Mexico
As of December 2020
175
149 148
103
78
59 53 42 40 34 34 32
16 15 12
Number of Hotels by Brand in Mexico
As of December 2020
115
74 Select Service Limited Service
45 47
42 40 39 35
19 23 21 19
17 16 15 13 14 13
11 12 12 12 10 8
Source: Information prepared by the Company based on publicly available information including prospectuses, quarterly reports, websites and press releases.
11…And Favoured by Exposure to Different Economic
Activities, Brands and Ownership Structures
Geographic Coverage by Country Presence in Mexico by Economic Activity
As of June 2021 As of June 2021, % of Total Portfolio based on Number of Hotels
4%
1% 5%
2%
1% 10% Services
33%
Mexico Manufacturing (Intermediate Goods)
Manufacturing (Finished Goods)
Costa Rica
14% Energy
Colombia Agroindustry and Exports
Chile Mining and Transformation
96%
96%
12% International Commerce
24%
Hotel Portfolio by Brand Hotel Portfolio by Ownership
As of June 2021, # of Hotels and % of Total Portfolio As of June 2021, # of Hotels and % of total Portfolio
12 3
2%
8%
38 62
22 25%
26%
14% Owned
40%
41%
Co-Owned
Leased
59% 9% Managed and Franchise
9%
17%
26 14
90 Consolidated 75%
25%
25%
12 39Coupled With an Innovative and Disruptive Room
Operation and Distribution Platform
Room Nights Sold by Channel
2020
Innovative technological
platform receiving more than 20% Hotel
80% of reservations through Walk Ins
37%
own channels 6% Call Center
5% City @ccess
Optimized Yield Management
12% Digital Platforms & Website
System executed in real time
20% OTAs & GDSs
focused on maximizing
RevPAR Room Nights Sold by Guest Type
City Premios – Loyalty 2020
program with over 1,000,000 10%
active members accountable
Domestic Guests
for 25% of total occupied room
International Guests
nights
More than 8,000 corporate 90%
agreements that account for
approximately 40% of total Room Nights Sold by Travel Purpose
occupied room nights 2020
11%
Solid commercial agreements
and partnerships that turn into Business
sales Leisure
3389%
13…And Supported by Best in Class Environmental
Social and Corporate Governance Practices
Strong Institutional Sponsors that Fueled Growth Commited and Capable Board of Directors
Board Committees
Audit (100% Corporate Practices Planning &
Independent) (100% Independent) Finance
Practices aligned to protect monirity interests
Cero corruption tolerance Board of Directors
Corporate Governance Manuals and Policies effectively
implemented: https://goo.gl/vFvNOV
Mainly independent Board of Directors – 10 out of 11 members Procurement &
are independent Compensation Nominations
Construction
Sustainability Strategy that Generates Results
Portfolio of Certifications Strategic Pillars and Initiatives
Sustainability policy and committee
effectively implemented. Entrepreneurship program,
Economic committed to growing
Top environmental practices and employment opportunities
international certifications for hotels. Resource optimization and
Environmental minimization of Carbon Footprint
Catalyst of positive social, economic iniciatives
and environmental impacts in all our
locations. Labor Inclusion and’ welfare
Social programs for employees
Deeply committed with UN’s 2030 Download our 2020
Goalds for Sustainable Sustainability Report
Development.
https://www.cityexpres
s.com/en/investors/su
stainability
14Expansion, Financial and Operating
Results
15Hotel Development and Inventory Expansion
Hotel Openings In the Last 24 Months
Ce Gustavo CeP Cancún CS Cancún
Ce Tepic Ce Atlixco Ce Comitán Baz Aeropuerto
Jan. 2018 March 2018 March 2018 Aeropuerto
June 2018 Oct. 2018 Oct. 2018
Cj CDMX CeP Mérida
CeP Interlomas CeP Tampico CeP Ensenada Ce Ensenada
Sullivan Dec. 2018
Nov. 2018 Nov. 2018 Dec. 2018 Dec. 2018
Dec. 2018
Ce CDMX Ce CDMX La
CeP Tijuana Ce Tapachula CeP Chihuahua CC SLP
Tlalpan Villa
Dec. 2018 March 2019 April 2019 Nov. 2019
Feb. 2019 April 2019
16Hotel Development and Inventory Expansion
2020 – 2021 Development Pipeline
CP Hermosillo Ce Lagos de
Ce Guaymas CP Mexicali Ce Caborca CP San Luis Moreno
Expo
January 2020 February 2020 December 2020 May 2021 July 2021
August 2020
Ce Monterrey
Ce Gdl. CP Mérida Siglo CP CDMX Per
San Nicolás CP Mazatlán CP Gdl. Prov
Galerías XXI Sur Cuicuilco
Ce Cancún
Ce CDMX
Aeropuerto
Anzures
17
* Pictures don't reflect the actual status of the hotelOperating And Financial Summary
Occupancy Average Daily Rate (ADR) and Effective Daily Rate (RevPAR)
% MXN ADR Full Year RevPAR Full Year
Full Year 2nd Quarter
ADR 2nd Quarter RevPAR 2nd Quarter
80.0%
ADR ∆% -1.5% RevPAR ∆% 6.6%
70.0%
59.1% 62.0% 61.7% 60.2% 59.9% ADR ∆% -6.1% RevPAR ∆% -38.9%
55.1% 1023
60.0%
934 979 977 983
38.0% 1,000 842
50.0%
722 737 766
56.9% 800 999
40.0%
27.7% 562 586 896
475 519 582
30.0% 600 398 436 380
20.0%
34.0% 400
10.0% 200 107 335
12.0% 271
0.0%
0
2013 2014 2015 2016 2017 2018 2019 2020 2021 2013 2014 2015 2016 2017 2018 2019 2020 2021
Total Revenues Adjusted EBITDA and EBITDA Margin
MXN Millions
MXN Millions
% Margin over Total Revenues
+252.3% -168.3%
1,001 996
879
19.1%
2,888 3,151 519 582 682 98
471
2,508 358
2,038
1,718
1,412 1,482
1,104 -100
147
2013 2014 2015 2016 2017 2018 2019 2020
-144
2013 2014 2015 2016 2017 2018 2019 2020 2Q20 2Q21 2Q20 2Q21
32.4% 33.3% 33.9% 33.4% 35.0% 34.7% 31.2% (6.8%) (97.9%) 19.0%
18Established Hotels Metrics
Number of Hotels in Operation ADR
# of Hotels in Operation at the End of Each Period MXN
39% 35% 33% 33% 29% 28% 20% 14% 20% 12%
1050 1,023 999
979 977 +2.65%
1000 934
148 152 154 152 153 950 1,000
123 135 22 19 900 842 959 960 973
106 42 31 30
96 39 850 910
82 41 766
34 35 800 737
32 132 134 722 834
96 106 121 122 750
62 71 82 700
50 753
650 714 720
2013 2014 2015 2016 2017 2018 2019 2020 2Q20 2Q21 600
(1) 2013 2014 2015 2016 2017 2018 2019 2020 2Q21
Non-Established Hotels Established Hotels
Chainwide Established Hotels (1)
% of Non-Established Hotels
Occupancy RevPAR
% MXN
62.6 66.3 66.8 63.2 62.3 60.4 700
66 58.0 597 604
+129 bps 557 573
58 600
62 61.7 60.2 59.9 500 +0.74%
50 59.1 56.9 39.3 451
55.1 500 414 562 586 582 383
42 38.0 519
400 475 380
34 29.2 436
398 284
26 300
18 27.7 200 271
10 100
2013 2014 2015 2016 2017 2018 2019 2020 2Q21 2013 2014 2015 2016 2017 2018 2019 2020 2Q21
(1)
(1)
Chainwide Established Hotels Chainwide Established Hotels
(1) Defined as the hotels with at least 36 months of operation
19Capital Structure and Financial Position
Balance Sheet Structure Financial Debt Maturity Schedule
As of june 30, 2021 As of june 30, 2021 Total Debt Outstanding:
MXN MXN
14,983.9 14,983.9 MXN 6,203.3 millions
Millions Millions 3,562
Cash and Equivalents
5%
Recoverable Taxes &
Others 10%
Financial
6%
42% Debt 992 1,137
Landbank
Constructions
13%
132 379
in Progress
Other 2021 2022 2023 2024 2025 &
Liabilities Beyond
10% Access to Diversified Financing Sources
Bank Debt by Counterparty as of june 30, 2021
85% Scotiabank
9%
82% 4% Inbursa
Productive Assets Shareholders’ 5%
Equity 32% BBVA Bancomer
(Established and
5% Bancomext
Non-Established 49%
Hotels) ICBC
12% Actinver
Sabadell
Otros
13% 20%
Net Fixed Assets Assets Liabilities +
20 Shareholders’
EquityReturn On Invested Capital
14,984
(MXN Millions)
Assets
Gross
Fixed
717 1,606
13,003 9,443
3,560
Adjusted
EBITDA
LTM 2Q21
7 7
80
-88
2.3%
ROIC1
-0.1% -0.1%
-0.9%
(Owned, Co-Owned
Number of
13,310 13,310
Rooms,
& Leased)
8,330
4,980
Average Cost
1,152 1,134
(MXN Thousands)
977
715
per Key
HCe Total Land Bank Construction Productive Assets FSTAY Portfolio Non-FSTAY
in Progress Portfolio
21 1. ROIC calculated as EBITDA LTM / Total InvestmentPristine Execution Characterized by Robust
Performance on All Fronts
Initial Public Offering
2nd Quarter 2021
(November 2013)
Hotels / Rooms in
72 / 8,201 153 / 17,442 112.7%
Operation
Hotel
Platform
Development Pipeline
13 30 130.8%
(Projects in Process)
Occupancy 55.1% 30.0% 17.1 pp
Operating Average Daily Rate
$722 $999 38.4%
Metrics1 (ADR)
Revenue per Available
$398 $380 4.5%
Room (RevPAR)
Total Revenues $968 MM $1,593 MM 64.6%
Financial
Performance1
Adjusted EBITDA /
$311 MM / 30.5% ($7) MM / (0.5%) NM
Margin
(1) Operating metrics calculated as of 2Q21 and financial performance calculated considering last 12 months
22Fibra STAY 23
Fibra STAY Objectives
1
Enhance transparency, capture and take advantage of
the market value of HCE’s real estate assets
2
Generate liquidity to support the growth in hotel units for
the 2021 – 2023 period
3
Establish a sustainable asset recycling mechanism
allowing continuous growth without diluting shareholders
4
Generate transparency on performance and profitability
HCE key business segments
25Fibra STAY Structure
HCE Investors
Management
FIBRA
Fee (in market terms)
Service
Provision
Servicios
Comerciales y Administradora
Promoción de FHCE, S.C.
Hoteles SA de CV Fee (in Trust 1 Trust 2 Trust 3
market
terms)
HCe
Guests
(Other hotels)
Contract
34 Hotels 8 Hotels
Lodging + FB (Other hotels)
Flow
Comisión Lodging + FB
FB Food and Beverages Mercantil
Agency
Servicios Centrales de
Cobranza Hotelera SA de CV
Lodging FIBRA Initial
Portfolio FB FIBRA Initial
Portfolio
Operation
Operadora de Hoteles City
Fee (in market terms) Express SA de CV
26Sustainable Recycling Capital Vehicle
FSTAY can take advantage of
its relationship with HCE to
Public Investors create a sustainable growth
cycle
Capital Provides capital for
CBFIs
Resources hotel construction
Capital Raise
Develops and
operates hotels
Has the obligation to
offer stabilized hotels
FSTAY
to FSTAY before
anyone else
Buys Receives
Assets from Other Market
Participants
27Best in Class Diversified and Established Portfolio
Portfolio Development by Brand
# de Hotels
42
35
31
29
25
23
21
18
14
12
8 9
5
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Ce Cs Cj CP
Key Points
• Hotels developed and operated by Hoteles City
Express under the highest quality standards.
• Assets strategically located in regions with high
demand for lodging by business travelers and with
growth potential.
• Established Portfolio of hotels – All the assets have
at least 24 months in operation, and 83% has 36
months or more. No discrimination criteria in
addition to compliance with the average stabilization
period.
28Diversified Portfolio with Exposure to Different
Industrial Regions
Sales Distribution 2Q 2021 - % of Total
By Hotel By Economic Region
Southeast
4% Ce Tijuana Insurgentes 8%
Top 21-42 4% CP Reforma El Ángel Northeast
4% Ce Manzanillo 23%
36% Northwest
4% CP Insurgentes Sur
30%
4% Ce Saltillo Norte
13% Top 6-10
South Center
Top 11-20 2% 23%
26%
Metropolitan Areas
By Economic Corridor By Brand 12%
Mining
Energy
7%
Agriculture 11%
6% 2%
10%
Industrial Services
Manufacturing
35%
17% 35% 55%
Maquila Exports
29 21%ADR and Occupancy Rates Growing Even with
Hotel Development
Occupancy Rate
% MXN $
70 1,100
1,053
63.8
65 61.5 61.2 63.0
61.8 61.9
1,018 1,000
60 58.6 58.4 58.7 57.6
969
55 951
900
50 879
800
45
795
40 759
741
700
715
35 697
679 31.4
30 600
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Occupancy Rate ADR
30Robust Operating and Financial Performance
(2)
Total Revenues
(1)
EBITDA
MXN $ Millons MXN $ Millons
1,600 +14.9% 600
+19.0%
1,249 1,272 463
1,200 1,159 421 434
1,012
347
824
800 300 275
536
400
85
0 0
2015 2016 2017 2018 2019 2020 2015 2016 2017 2018 2019 2020
(3) (4)
NOI AFFO
MXN $ Million MXN $ Million
500 +19.3% 400 +15.7%
408
371 376 251 263
214 234
304 200 170
250 240
0
73
(2)
-111
0 -200
2015 2016 2017 2018 2019 2020 2015 2016 2017 2018 2019 2020
Notes
1. Total Revenues considers Room revenues and other incomes
2. Does not consider Ps$15.5MM, Ps$15.9MM and Ps$16.4MM of SG&A for 2015, 2016 y 2017, respectively
31 3. Calculated as EBITDA – FF&E
4. Net Income + Income Taxes + D&A – FF&ERobust Operating and Financial Performance
EBITDA Margin FFO Margin
% %
38 36.0 37.4 32
30.1
34 33.7 26.4
33.1 34.1 27 25.2 25.8
30 29.7 28.9 24.7 22.6
26.4 26.4 23.4
30.2 22 24.3 24.8
26 26.2 27.5 25.3 22.4 22.5 19.3
24.8 24.9 19.4 21.3 18.9
22 17
2015 2016(1) 2017 2018 2019 2015 2016 2017 2018 2019
(2)
FSTAY FINN FHotel FSTAY FINN FHotel
* Peers´s figures are calculated as LTM
AFFO Margin LTV
%
4Q20 (%)
25.9 35 32.16
25 22.0
22.3 21.5 25.7 25.9
20.5 21.2
22 21.4 26
18.2
19 20.5 21.0
20.4 17.1
18.7 17
16 20.3
15.9
13 8 (4)
(5)
2015 2016 2017 2018 2019 FSTAY FINN FHotel
(3)
FSTAY FINN FHotel
Notes
1. Does not consider Ps$15.5MM, Ps$15.9MM y Ps$16.4MM of SG&A for 2015, 2016 y 2017, respectively
2. FFO calculated as Net Income + Income Taxes + D&A
3. AFFO calculated as Net Income + Income Taxes + D&A – FF&E
4. Taking Ps$1.9Bn of debt and Ps$5.7Bn of fixed assets, according to last appraisal
32Conservative Capital Structure and Debt Profile
Leverage Considerations Hedges over Cost of Debt
Maintain levels of debt / Fixed Assets lowers
than 50% (34% initially) 100%
Covered
Actual cost of debt TIIE + 180 bps contemplating
hedges of TIIE at 6.8% already signed Base Interest Rate
at 6.8%
Migrate to a unsecure debt structure with a
balloon payment once the issuance of the
vehicle has been made
Main Debt Indicators Debt Amortization Schedule
2020 MXN $ Million
Total Debt MXN $ 1.8 Bn
1,600 1,440
LTV (1) 32% Average Weighted Life:4.0 years
1,200
DSCR (2) 2.2x
800
Net Debt/ LTM EBITDA 20.1x
400
120 160 160
% Guaranteed 100%
0
2020 2021 2022 2023
Notes
1. Total Debt / Value of the Properties according to last appraisal
33 2. NTM EBITDA / (Interests+ Amortization + FF&E)FSTAY Re-launching
Co-investment and M&F FSTAY Relaunching
Initial Portfolio
Hotels Portfolio
FSTAY re-launching
could be activated 42 properties 28 properties 70 properties
as soon as market
window opens
100% owned JV and 100% owned hotels JV and 100% owned hotels
Investment trust
structure created,
shareholders’ Asset Valuation: Asset Valuation: Asset Valuation:
approval set and MXN $5.7 billion MXN $3.1 billion MXN $8.8 billion
communication
model implemented
Debt: Debt: Debt:
MXN $1.9 billion MXN $1.1 billion MXN $3.0 billion
Re-launching of
vehicle bigger in size
($8.8 billion vs $5.7 Equity: Equity: Equity:
billion) including JVs
MXN $3.8 billion MXN $2.0 billion MXN $5.8 billion
Free float: Free float: Free float:
1.9 billion $1.0 billion $2.9 billion
(50%) (50%) (50%)
34Portfolios Comparison
RevPar Change%
27% 29%
24%
23% 23%
20%
19%
19%
11%
10% 11%
9% 8%
5% 6% 12%
10%
4%
0% 0% 5% 7% 5%
2%
0 3 6 9 12 15 18 21 24 27 30 33 36
-7% Portfolio70 Portfolio 42
EBITDA Margin
40%
39%
38% 37% 37% 38%
37% 37% 37% 37% 37%
37% 36%
36% 37% 37%
37% 37% 36% 35% 35%
36%
33%
34% 32%
31%
0 3 6 9 12 15 18 21 24 27 30 33 36
Portfolio 70 Portfolio 42
35Transparent Operating Contract in Line with
Industry
Fees of Operating Contract Other Considerations
● Fee of Administration ● Contract length
– A percentage is charged on Total Revenues – Renewable every 25 years
● Fee of Operating Incentive ● Operating Contracts in line with industry
standards
– A percentage is charged over Gross
Operating Profit ● All our hotels have contracts with similar
and consistent terms
● Fee on Reservations
● Mechanisms of alignment of operational
– A percentage is charged on Room
interests
Revenues
● No hidden fees
● Fee on Royalties
– A percentage is charged on Total Revenues
● Advances of commissions are contemplated
for other income that is not lodging
36Growth Potential with a Disciplined Acquisition
Strategy
1
Strengthen Operational Indicators of hotels Recently Opened
2
Non Established
3 4 Hotels in 5 Reinvest in our
Co-Owned Hotels Development
Hotels Hotels
Pipeline
Option to acquire hotels Possibility to acquire the Option to acquire the Reinvestment
from HCEs portfolio hotels of HCE under the hotels that are planned to opportunities will be
when they are investment scheme of be developed between considered within the
established Co-Owned 2020 and 2022 FIBRA portfolio
− 5 established hotels − 23 established hotels − 29 potential properties − Will seek to remodel
and 2 more to be and 6 more to be to be developed and relocate the hotels
established in 2020 established in 2020
with 792 rooms with 3,341 rooms − ~65% will be Owned − Objective Profitability
and Co-Owned hotels will be between 12%
− This acquisitions will − This acquisitions will and 14%
represent an increase represent an increase
of 16.0% in available of 67.6% in available
rooms for our portfolio rooms for our portfolio
6
External Opportunities different to Hoteles City Express
37FSTAY Internally Managed Without Fees for
Administration
Management Characteristics
• FSTAY Subsidiary
• Relationship between FSTAY and Management through a contract of
reimbursement for expenses
− Maximum budget established from which no surplus will be refunded
• An estimated of administrative expenses of FSTAY will be approximately,
Ps$17.5 Mn a year(1). This will include:
− Fixed and variable compensation of the management team
− Office rent
− Appraisals and auditing
− Fees of Bolsa Mexicana de Valores (BMV)
− Other minor expenses
Notes
38 1. Estimated for 2018 from an expense of Ps$16.4 Mn in 2017Corporate Governance Aligned with Investors
Structure that Mitigates Conflicts of Interest
Committees Shareholders Assembly
• Designate (initially) / approve members ● Shareholders have the right to name one member
of the committees of the Technical Committee for every 10% of CBFIs
• Discuss and approve any asset
acquisition that represents between 5- they own
20% of the equity value
Technical
• Approve and remove the third party ● Shareholders that represent 10% or more of the
Committee appraiser
• Approve accounting policies and
CBFIs can call an assembly
financial statements, with prior
recommendation of the audit committee ● Ordinary Assembly
• Approve dividends and repurchases (Quorum 50% / Approval 50% of the CBFIs represented)
– Will be able to solve any matter that requires
• Approve and remove external auditor
Audit the approval of the Shareholders Assembly that
• Discuss Financial Statements
Committee • Recommend accounting policies is not reserved for an Extraordinary Assembly
• Approve any operation with related ● Extraordinary Assembly
parties (Quorum 75% / Approval with simple majority of CBFIs
Conflicts
• Call the Shareholders Assembly to represented)
Committee discuss any issue that may create a
conflict of interests – May replace the Common Representative,
Management and Trustee
• Supports the Technical Committee in
Practices
Committee
making decisions on corporate – Dissolve or delist the FIBRA
governance and best practices
– Remove members of the Technical Committee
• Ensure that the mechanisms and
Leverage controls are established to verify that ● Shareholders with conflict of interests will not have
Committee any leverage comfortably complies with
the Fibra's indebtedness policies a right to vote
39Transparent Acquisition Mechanism from HCE
Possible Portfolio to
Valuation Mechanism Approval Process
Contribute
HCE has the obligation to offer a The Technical Committee will Any acquisition of Assets owned
ROFR over the portfolios have the right to choose an by HCE, will require the approval
developed and stabilized to independent appraiser (with the of:
FSTAY of which HCE owns 100% majority vote of the independent
members) − Technical Committee
Stabilized HCE hotels based on
The seller will have the right to − Vote in favor of the
any of the following two metrics:
choose a different independent Shareholders Assembly
− Hotels that have more than 36 appraiser (related parties in the sale of
months in operation In the event that the prices differ the assets will not have a right
by less than 10% the price will be to vote)
− Hotels based on their financial
the average of the two
metrics have a calculated
ROIC (1) of 12% or higher If the price of the appraisers
exceeds a 10% difference, a third
appraiser must be chosen and the
average of the 3 appraiser will be
taken
Notes
40 1. Defined as EBITDA / Total Investment100% Independent Technical Committee
Changes to the Technical Committee to be discussed with Investors
Jorge García Segovia - President Carlos Bracho González
● Mr. García Segovia has served as Deputy Director of ● Mr. Bracho has been a member of the of the Board of
the Northern Zone in Operadora de Bolsa, S.A. de C.V., Directors of many companies such as: Banca Serfín,
Director of following áreas International , Fiduciary, Compañía Hulera Euzkadi, Grupo Petroquímico Beta,
Mortage, Credit Cards in the Northern área of the Financiamiento Progresemos, and Fibra VIA, among
country in Banca Serfin, S.A. others
● He has been a member of the of the Board of Directors ● He is a Public Accountant at the Universidad
of Cemex México, Maxcom and Compañía Minera Iberoamericana with a Master's Degree in Finance from
Autlan, among other organizations the University of Rhode Island
● Graduate from I.T.E.S.M. of the Bioquimical
Engineering career and has a Diploma in Finance
Harald Feldhaus Herrmann Sergio del Valle Cantú
● Mr. Feldhaus serves as advisor to several companies in ● Mr. Del Valle is partner of WAMEX Private Equity since
Mexico such as Quálitas Compañía de Seguros and 2001, mexican firm that manages private equity funds
Safe-Data Resources
● Currently a member of the Board of Directors and
● Member of the Patronato of Hospital ABC (English Committees of KUA Mex Foods and Productos Medix
Hospital) and from Consejo Fondo para la Paz and has been member of the Board of several
companies promoted by WAMEX funds
● President of the Mexican-German Chamber of
Commerce and Industry, and formed as a member of ● Industrial Engineer graduated from UP with
the Comision México – Alemania 2000 postgraduate studies at IPADE
● He was chariman for Latam of Marsh McLennan Co.
● Actuary graduated from UNAM
41100% Independent Technical Committee
Changes to the Technical Committee to be discussed with Investors
Orlando Loera Flor Unda Carbot
● Mr. Loera worked in different executive positions for ● Mrs. Unda held senior positions in the financial sector
Bank of America Merrill Lynch for more than 39 years for more than 15 years
● During his career at BofAML he was Country Executive ● She has been a commissioner of Banks, companies
for the bank in México and chief of the investment and auxiliary services with a market expertise in
banking, institutional sales and trading unit. marketing
● His last position was Chief Risk Officer for Latin ● Currently, she is an independent director in different
America of BofAML industries and is a member of the Audit Committee of
● Likewise, Mr. Loera was the restructuring director for the Banco Nacional de Comercio Exterior
Casas GEO and Controladora Comercial Mexicana ● Mrs. Unda was president of the Comité Técnico
Nacional de Gobierno Corporativo of IMEF
● She has a Bachelor’s degree in Mexico and a Masters
degree in philosophy in the United States
Eduardo Güemez
● Mr. Güemez currently holds the position of CFO in
Mexico Retail Properties (MRP), company focused in
Real Estate development and Real Estate related to
retail in Mexico
● Before MRP held the position of CEO at LaSalle
Investment Management where he managed an
industrial portfolio of US$ 400 millon
● Prior to LaSalle, he served as Managing Director of GE
Real Estate and Risk Manager at the company
● Bachelor’s degree in Mechanical Engineering from
I.T.E.S.M. and Master’s degree in operational research
at the University of Stanford
42Tax Implications for Foreign Investors
C-Corp Fibra
Corporate Income Tax Exempt or 30% 0%
WHT on dividend distributions 0% based no certain treaties Exempt
Either:
Exempt
Foreign Pension Fund
Capital gains (via private sale) 25% on gross sale amount
Exempt
35% on net gain (certain
requirements must be
comply)
Capital gains (via stock market) N.A. Exempt
Corporate income tax 30% N.A.
10% (can be reduced to 0%
WHT on dividend distributions 30%
depending on certain treaties)
Foreign Investor Either:
(Corporate or Individual) 25% on gross sale amount
35% on net gain and 10% on
Capital gains (via private sale) 35% on net gain (certain gross sale
requirements must be
comply)
Capital gains (via stock market) N.A. Exempt
43Hoteles City Express Brands 43
Products Focused on Maximizing the Price – Value Ratio
for our Guests
44Best-in-class Design Translated in Efficient and
Comfortable Spaces
45Products Adapted to Guest Lodging Needs and Budgets 46
Presence in Premium Locations Hard to Replicate 47
Hoteles City Express Brands
Disclaimer
This presentation has been prepared by Hoteles City Express, S.A.B. de C.V. (the “Company”) and is publicly available at: https://www.cityexpress.com/en/investors/financial-
information. This presentation is not intended for distribution to, or use by, any person or entity in any state or jurisdiction where such distribution or use would be contrary to
applicable law or regulation. In accessing this presentation, you agree to be bound by the following terms and conditions.
This presentation only includes publicly available information concerning the Company, in summary form and, therefore, does not purport to be complete. No representation or
warranty, either express or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein. Any opinions expressed in this
presentation are subject to change without notice and the Company is under no obligation to update or keep current the information contained herein. The Company and its
affiliates, agents, directors, partners and employees accept no responsibility whatsoever for any loss or damage of any kind arising out of the use of all or any part of this
presentation.
This presentation contains “forward-looking” statements relating to future results (including certain projections and business trends) that are subject to risks and uncertainties that
may cause the Company’s actual results or performance to differ, including materially, from any future results or performance expressed or implied by the forward-looking
statements. Forward-looking statements include, without limitation, those concerning: the Company’s strategy and its ability to achieve it; the Company’s possible or assumed
future results of operations; capital expenditures and investment plans; adequacy of capital; and financing plans; and may contain words like “aim,” “may,” “will,” “expect,” “is
expected to,” “anticipate,” “believe,” “future,” “continue,” “help,” “estimate,” “plan,” “schedule,” “intend,” “should,” “would be,” “seeks,” “estimates,” “shall,” or the negative or other
variations thereof, or any other words or phrases of similar meaning. The forward- looking statements are not guarantees of the Company’s future performance, and the
Company’s actual results or other developments may differ materially from the expectations expressed in the forward-looking statements. As for forward-looking statements that
relate to future financial results and other projections, actual results will be different due to the inherent uncertainty of estimates, forecasts, and projections. Because of these risks
and uncertainties, potential investors should not rely on these forward-looking statements.
This presentation does not constitute an offer, or an invitation or solicitation for an offer, to subscribe for or purchase any securities, nor shall any part of it nor the fact of its
dissemination form part of or be relied on in connection with any contract or investment decision relating thereto. Neither this presentation nor anything contained herein shall form
the basis of any contract or commitment. Likewise, this presentation does not give and should not be treated as giving investment advice.
Héctor Vázquez
Corporate Finance and Investor
Relations
Tel: +5255 5249-8050
hvazquez@hotelescity.com
www.cityexpress.com/en/investors
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