Mediterranean Tourism Gem - October 2018 - Valamar Riviera
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Mediterranean Tourism Gem 1 October 2018 TUI Family Life Bellevue Resort 4* - Rabac
1 Introduction
Dubrovnik - Babin Kuk
2 Overview of Valamar Riviera
3 Market Overview
4 Financial Overview
5 Share RIVP
6 Detailed Investments Overview
2
Valamar Riviera 2017 Note: All values have been converted from HRK to EUR
according to the average yearly FX, while for 2018 and
further have been converted @ FX EUR/HRK = 7,5
Leading tourism company in Croatia by EUR 261-264mn (+10-11% yoy) Capacity of:*
revenues, capacities and number of E2018 total revenues
destinations 8.000 guests
EUR 92-93mn (+14-16% yoy) > 21.000 units
E2018 EBITDA
Strongest Croatian hotel brand
12% of categorized capacities
35-36% 6,2mn
E2018 EBITDA margin
overnights
Overview of Valamar Riviera
Largest portfolio of camping in Croatia (15% 10% revenue and 13% 1,0mn
of categorized camping in Croatia) EBITDA 10y CAGR (2007-2017) arrivals
EUR 557mn
investments in the past 14 years (incl. acquisitions)
2018 asset portoflio:
2
EUR 670mn 47% Premium & Upscale
balance sheet 34% Midscale
EUR 630mn 22.000
Mcap (23/10/2018) shareholders
34
Attractive destinations:* hotels and resorts*
.700 permanent employees ,
2,85x Rab, Makarska, Dubrovnik, 15
6.600 employees in peak season net debt/Adj. EBITDA Obertauern camping resorts*
* incl. Hoteli Makarska Plc and Hotel 3
Introduction
The largest
Croatian tourism Second highest Sustainable
company and the 12% share liquidity on dividend
first Croatian of Croatian Major tourist Increasing ZSE (EUR 109k), large potential
hotel brand categorised destinations profitability free-float (49%), and
accommodation (Istria, Krk, Rab and further excellent IR
capacity Makarska, Dubrovnik growth standards
and Obertauern) potential
Introduction
VALAMAR RIVIERA IS THE LEADING TOURISM COMPANY IN CROATIA
1
AND ONE OF THE MOST ATTRACTIVE SHARES ON THE
CROATIAN CAPITAL MARKET
Continuous Small share
increase in of upscale/premium Stable
overnights and hotel accommodation
Attractive increase
arrivals in Croatia capacities in
geographic in hospitality
(5,4% overnights CAGR Croatia (4* and 5*)
position on the sector revenues
2010 2017)
(8% in 2017) (7% CAGR
Mediterranean
2009 2017)
4
TUI Family Life Bellevue Resort 4* - Rabac
1 Introduction
2 Overview of Valamar Riviera
3 Market Overview
4 Financial Overview
5 Share RIVP
6 Detailed Investments Overview
5
History of Valamar Riviera
RECORD BUSINESS
RESULT AND GROWTH
(2015)
Reorganization of the
company and growth of
financial results.
Overview of Valamar Riviera
MERGERS &
ACQUISITIONS
2015: Acquisition of the
CONSOLIDATION AND majority stake in Hoteli
LISTING ON ZAGREB Plc (est. 1949)
STOCK EXCHANGE
2016: Merger of Hoteli
(2011 2015)
Plc (est. 1949)
2011: Zlatni otok Plc (est.
2016: Acquisition of
1956), Rabac Plc (est.
54,71% of Imperial Rab
1961)
INTENSIVE CONSTRUCTION Plc (est. 1965)
2013: Dubrovnik-Babin
BEGINNINGS OF TOURISM 1967 = Hotels and apartments Luna kuk Plc (est. 1971) 2018: Acquisition of
2
46,93% of Hoteli
2014: Valamar Adria
BIRTH OF THE 1968 = Hotel Neptun and the tourist Makarska Plc (est.
holding Plc (est. 2003)
1895 = First public bathing COMPANY village Lanterna 1952)
and Valamar grupa Plc
area on Sv. Nikola Island, MANAGEMENT
(est. 2005) reverse
Bagno Parentino 1953 = Founding of 1971 = Hotels Crystal and Rubin COMPANY VALAMAR 2018: Acquisition of
vertical merger. The
FOUNDING OF THE HOTELS & RESORTS 100% of Mathhias
consolidated company
a predecessor of 1976 = Hotels Diamant and Zagreb, DOM FOND BEGINS TO MANAGE Aichmann GmbH (est.
started operating under
opens after which the Valamar Riviera Plc and the pavilion Solaris HOSPITALITY 1950)
the name Valamar Riviera
company is named 1999 = Establishment OPERATIONS
Plc and was listed on the
Management of hotels, 1979 = Hotel Pical, first hotel of the of the largest
official market of the ZSE
1913 I 1923 = Hotels bungalows and privatization Introduction of the first NEW STAGE OF
in Dec 2014.
Venezia and Parentino restaurants investment fund during tourism brands Valamar BUSINESS
opened, owned by the 1986 = Hotel Fortuna, on the Sv. the voucher privatization Hotels & resorts and 2015: Valamar hoteli i New Strategic Goals To
company to this day Sv. Nikola Island Nikola Island period in Croatia Camping on the Adriatic (est. 2000) Be Achieved By 2020
1895-1950 1950-1965 1965-1990 1990-2000 2000-2010 2010-2014 2015 -
CROATIAN CROATIAN TOURISM PRIVATIZATION & BUSINESS & BUSINESS NEW STAGE IN
TOURISM HISTORY DEVELOPMENT OWNERSHIP PORTFOLIO CONSOLIDATION GROWTH AND
TRANSFORMATION DEVELOPMENT ACQUISITIONS
6
Our Mission, Vision and Core Values
MISSION
WELCOMING PROUD
We make our guests feel very We take pride in our destinations and
To create unforgettable guest welcome and highly appreciated. in being part of the Valamar family.
experiences by using innovative
services in leisure tourism.
Overview of Valamar Riviera
INNOVATIVE RESPONSIBLE
To develop a stimulating corporate
culture where guests and
employees come first. We engage in collaborative innovation We are a responsible business partner,
to improve our performance, stay alert a caring employer, supportive towards
and always remain open to change. the community and committed to
To deliver new value for preserving the environment.
shareholders through corporate
responsibility by promoting
sustainable development and
AMBITIOUS
2
supporting local communities.
We set challenging goals and strive for
excellence in everything we do.
VISION
To be the leader in leisure tourism
and create authentic guest
experiences in partnership with our
CORE
destinations.
values
7
Management of the Valamar Brand
First Internationally Recognized Brand
New Brand Identity
in Modern Croatian Tourism
▪ The Valamar Hotels & Resorts brand was introduced in 2004 and very soon
it became the first internationally recognized brand in modern Croatian
tourism
▪ Camping Adriatic by Valamar was introduced two years later
▪ Over time, the brand architecture was supplemented and modified,
adapting to the changes within the company, and in 2016, the process of
redefining the existing brand strategy began
Overview of Valamar Riviera
2018 Key Brand Changes
▪ The existing Valamar brand architecture has moved from a system with two
main product brands to a system with five main product brands closely
linked to core culture and values
▪ Each property in the portfolio is linked to one of the product brands and
2
has had specific positioning, USPs, target markets and sales channels
defined specifically for it
▪ Valamar Collection and Valamar Collection Resorts are brands of strategic
importance and are the closest to core values; they include the
best products in the portfolio
▪ Valamar Hotels & Resorts is a brand covering the largest portion of the
capacities and includes both upscale and midscale properties;
specific labels will be introduced through this brand, depending on the
special characteristics of each product
▪ Sunny by Valamar is the economy brand that includes both midscale and The Valamar loyalty program connects all the
economy portions of the portfolios product brands in the system. It contributes to
▪ Camping Adriatic by Valamar will be lifted to a higher level and be more the distinctiveness of the umbrella brand and
strongly linked to the Valamar brand; additionally, it has been divided into creates added value for returning guests.
three categories Premium Resorts, Resorts and Sunny 8
New Valamar Brand Portfolio
Overview of Valamar Riviera
2
9
Awards & Recognitions and Business model
Business Model: Asset, Hospitality and Destination
Awards & Recognitions
Management Company
▪ On an annual basis, Valamar receives more than 50 international awards
for quality, including most prestigious awards such as Travel
as well as those given by Tripadvisor, ADAC, TUI, Zoover, Luxury
Travel Guide and others
Overview of Valamar Riviera
2
Optimal investment and
return on assets
Managing the product portfolio
Managing the complete guest
experience in a destination
Increased per-guest revenue due to
active value chain management
Increased profitability due to the horizontal
and vertical integration at destination level
102016-2020 Strategic Goals and Strategic Initiatives
OFFER ATTRACTIVE AND LONG- CREATE NEW VALUE FOR STEER A SUSTAINABLE AND
TERM SUSTAINABLE DIVIDENDS SHAREHOLDERS SOCIALLY RESPONSIBLE
• 2018: EUR 14,9mn; 2017: EUR 13,1mn; • Significantly increase our market DEVELOPMENT OF DESTINATIONS
2016: EUR 9,8mn; 2015: EUR 9,1mn; capitalization (2017: +26%) • Invest up to 2,5% of revenues
2014: EUR 8,3mn
GROW SIGNIFICANTLY HEAVY INVESTMENTS STRENGTHEN DIRECT
• double-digit EBITDA-CAGR growth • Invest 200-265mn RELATIONSHIPS WITH GUESTS
(2015-2017: +20%) (2017&P2018&P2019: 312mn) • 50% of revenues from direct bookings
Overview of Valamar Riviera
• EBITDA margin 35%-38% (2017: 35%) • Premium returns while maintaining a (2016: 41%; 2017: 43%) and 30% of
solid balance sheet (2017: 670mn) and returning guests (2016: 24%; 2017: 24%)
a sustainable net debt/EBITDA ratio
(2017: 2,85x)
EXPAND STRATEGIC BE RECOGNIZED AS THE MOST
PARTNERSHIPS DESIRABLE EMPLOYER IN TOURISM
• With well-known international • 70% return rate of seasonal workers (2016:
companies and key partners 63%; 2017: 56%) and develop >80% of our
(2016&2017: TUI, Rewe management internally (2016: 66%; 2017:
70%)
2
KEY STRATEGIC INITIATIVES TO REALIZE THE STRATEGIC GOALS:
- Focus on the guest -
- Caring for our employees -
- Growth strategy -
- Innovation and digitization -
- Development of our destinations and responsibility to the local community -
11
- Commitment to environmental sustainability -Organizational and Ownership Structure
Organizational Structure Corporate Governance
▪ 1.718 full time employees (30/9/2018)
▪ KPMG auditor from 2012 to 2016; Ernst&Young from 2017
DIVISION: Business Development, Quality and Corporate Affairs ▪ The Supervisory Board has 7 members, including 2
independent members
▪ The Supervisory Board has 3 operating committees
DIVISION: Sales & Marketing Presidium / Audit / Investment
Overview of Valamar Riviera
DIVISION: Asset Development, Maintenance & Technical service Ownership Structure (30/9/2018)
Goldscheider Keramik
Gesellschaft m.b.H.; Wurmbock Beteiligungs
DIVISION: Operations 19,9% GmbH; 19,9%
MANAGEMENT BOARD
Dubrovnik Region
Satis; 5,2%
49% Lanschuetzer
SECTOR: Purchasing free-float Franz; 4,4%
Enitor; 2,2%
2
Kapitalni fond;
1,5%
SECTOR: IT & Application Support Other; 45,5%
State street bank and
trust company; 1,5%
SECTOR: Asset Management & General Affairs
NB: free-float does not include treasury shares and shares in sole ownership over 4%
SECTOR: Finance & Accounting
Management Board
SECTOR: Strategic Planning & Controlling
SECTOR: Human Resources
12
President / CEO Member / CFOAsset Portfolio 2018 (1) Note: All values have been converted from HRK to EUR
according to the average yearly FX, while for 2018 and
further have been converted @ FX EUR/HRK = 7,5
Units per Categorization
Total of
20.648 units
43% 43%
Hotels and Hotels and
AUSTRIA Resorts Resorts
(8.982) (8.956)
2017 2018
POREČ, Istria 57% 57%
CROATIA Camping Camping
9.932 ISLAND OF KRK
Valamar Riviera in Figures
resorts resorts
3.496 (11.870) (11.692)
PULA, Istria
664 ISLAND OF
RAB Share of Premium & Upscale Units
2.466 OBERTAUERN
RABAC, Istria (Hotel Petersbühel
50%
2.124 acquisiton in 3Q 2018;
not included in 2018
units calculus) 40%
82
30%
2
PREMIUM 27% 20%
MAKARSKA
5.607 units (Hoteli Makarska Plc 2012 2013 2014 2015 2016 2017 2018
acquisiton in 2H 2018;
not included in 2018
units calculus)
UPSCALE 20%
726 Net Operating Revenues
4.175 units
(2017)
22%
MIDSCALE 34% Camping
6.945 units DUBROVNIK 74% resorts
1.966 Hotels and (EUR 54mn)
Resorts
ECONOMY 19% (EUR 177mn) 4%
3.921 units Other 13
(EUR 9mn)Asset Portfolio 2018 (2)
PREMIUM (5.607 units; 27% of total capacities) MIDSCALE (continued)
Valamar Collection Dubrovnik President Hotel 5* (292 units) Corinthia Sunny Hotel by Valamar 3* (456 units)
Valamar Collection Isabella Island Resort 4* & 5* (334 units) Valamar Zvonimir Hotel 4* (85 units)
Valamar Lacroma Dubrovnik Hotel 4* (401 units) Valamar Atrium Residence 4* & 5* (64 units)
Valamar Collection Girandella Resort 4* & 5* (391 units) Valamar Villa Adria 4* (28 units)
Valamar Collection Imperial Hotel 4* (136 units) Valamar Koralj Hotel 3* (274 units)
Krk Premium Camping Resort by Valamar 5* (500 units) Valamar Club Dubrovnik Hotel 3* (338 units)
Premium Camping Resort by Valamar 4* (683 units) Valamar Carolina Hotel & Villas 4* (152 units)
Overview of Valamar Riviera
Lanterna Premium Camping Resort by Valamar 4* (2.870 units) San Marino Sunny Resort by Valamar 3* (457 units)
UPSCALE (4.175 units; 20% of total capacities) Orsera Camping Resort by Valamar 3* (596 units)
TUI Family Life Bellevue Resort 4* (372 units) Sunny Camping by Valamar 3* (344 units)
Valamar Tamaris Resort 4* (507 units) Solitudo Sunny Camping by Valamar 3* (419 units)
Valamar Riviera Hotel & Suites 4* (152 units) Padova Camping Resort by Valamar 3* (453 units)
Valamar Zagreb Hotel 4* (230 units) Solaris Camping Resort by Valamar 3* (1.807 units)
Valamar Sanfior Hotel & Casa 4* (242 units) ECONOMY (3.921 units; 19% of total capacities)
Valamar Argosy Hotel 4* (308 units) Pical Sunny Hotel by Valamar 2* (359 units)
2
Valamar Padova Hotel 4* (175 units) Tirena Sunny Hotel by Valamar 3* (208 units)
Marina Camping Resort by Valamar 4* (318 units) Lanterna Sunny Resort by Valamar 2* (956 units)
Bunculuka Camping Resort by Valamar 4* (408 units) Eva Sunny Hotel & Residence by Valamar 2* (284 units)
Camping Resort by Valamar 4* (654 units) Marina Hotel by Valamar 2* (283 units)
San Marino Camping Resort by Valamar 4* (809 units) Istra Sunny Camping by Valamar 2* (1.007 units)
MIDSCALE (6.945 units; 34% of total capacities) Brioni Sunny Camping by Valamar 2* (664 units)
Valamar Diamant Hotel & Residence 4* (372 units) Tunarica Sunny Camping by Valamar 2* (160 units)
Valamar Crystal Hotel 4* (223 units) 2018 ACQUISITIONS
Pinia Sunny Residence by Valamar 3* (96 units) Hotel Meteor 4* (278 units)
Rubin Sunny Hotel by Valamar 3* (253 units) Hotel Dalmacija 3* (190 units)
Valamar Pinia Hotel 3* (170 units) Hotel Rivijera 2* (257 units)
Allegro Sunny Hotel by Valamar 3* (180 units) (82 units)
Miramar Sunny Hotel by Valamar 3* (178 units) 14Destinations and Asset Management Note: All values have been converted from HRK to EUR
according to the average yearly FX, while for 2018 and
further have been converted @ FX EUR/HRK = 7,5
ISTRIA
LONG-TERM ASSET MARITIME
▪ The most prominent tourist region in Croatia BOOK VALUE (2017) DOMAIN (2017)
(30mn of overnights p.a.)
▪ destinations: Tar, Funtana,
Vrsar, Pula-Brioni, Rabac 22%
▪ 17 hotels and resorts and 7 camping resorts Camping
resorts
EUR
ISLAND OF KRK
Overview of Valamar Riviera
606mn
▪ The biggest and most populated island in 9%
Croatia (1mn of overnights p.a.) Other
▪ The key advantage is a bridge connection with
the mainland and international airport 69% 36 km
▪ 3 hotels and resorts and 5 camping resorts
Hotels &
Resorts
ISLAND OF RAB
LAND INVESTMENT
2
▪ 2mn of overnights, i.e. 230 thousand guests SURFACE (2017) MAINTENANCE
(50% of guests from GER and AUT) AND FF&E
▪ Imperial hospitality company has a dominant
position in the island hotel and campsite offer
▪ 5 hotels and resorts and 2 camping resorts
ha
DUBROVNIK 579
▪ Globally recognized tourist destination (6mn of
overnights p.a.)
▪ 5 hotels and resorts and 1 camping resort
46% 54% 5%
Ownership Under concession of revenues 15Acquisition of Imperial Rab Plc 2017 Note: All values have been converted from HRK to EUR
according to the average yearly FX, while for 2018 and
further have been converted @ FX EUR/HRK = 7,5
Units per Categorization
EUR EUR
21,0mn 7,4mn
Operating income EBITDA 56% 44%
(+9% on RIVP) (+11% on RIVP) Hotels and Resorts Camping resorts
(1.204) (1.555)
Overview of Valamar Riviera
EUR
2,0mn
Net profit
Overnights 10%
Capacity Economy
716.510 2.759 84% (284)
(55% of total overnights on Midscale
the island of Rab; +12% units
(2.300)
on RIVP) (+15% on RIVP)
6%
2
Upscale
(175)
VALAMAR VALAMAR
Purchase of Revenues
54,71% 56,21% Acq. EV/EBITDA growth
88,97% 91,87%
of share capital of share capital 12,8x SYNERGIES
in Dec 2016 in Oct 2018 Operating efficiency
(EUR 62mn) AZ MPF AZ MPF NB: based on 2015 growth
figures
34,26% 35,66% 16Acquisition of Hoteli Makarska Plc 2018 (1)
Hotel Rivijera 2* (258 units)
Overview of Valamar Riviera
Hotel Dalmacija 3* (190 units)
2
Hotel Meteor 4* (278 units)
MAKARSKA
17Acquisition of Hoteli Makarska Plc 2018 (2) Note: All values have been converted from HRK to EUR
according to the average yearly FX, while for 2018 and
further have been converted @ FX EUR/HRK = 7,5
Units per Categorization
EUR EUR
11,5mn 3,3mn
2017 Operating
2017 EBITDA 100% 0%
income (+4% on RIVP) Hotels and Resorts Camping resorts
(+5% on RIVP)
(726) (0)
Overview of Valamar Riviera
EUR
1,7mn
2017 Net profit
Overnights Capacity
234.914 726 64% 36%
(16% of total overnights in Midscale Economy
the city of Makarska; units
(+3% on RIVP) (468) (258)
+4% on RIVP)
2
VALAMAR
Revenues
46,93% Acq. EV/EBITDA growth
85,93% Business
consolidation from SYNERGIES
of share capital 12,0x
in Aug 2018
AZ MPF
Aug 2018 NB: based on 2017
Operating efficiency
growth
figures
39,00%
18Note: All values have been converted from
Acquisition of Hotel (Obertauern) 2018 HRK to EUR according to the average
yearly FX, while for 2018 and further have
been converted @ FX EUR/HRK = 7,5
Location
17.069
2017 Overnights
Overview of Valamar Riviera
EUR
0,5mn
2017 EBITDA
Hotel 4* (82 units)
EUR
2
2,1mn
2017 Operating
income
Revenues
growth
SYNERGIES
Operating
efficiency
19Guests Structure 2017
Source Markets (by overnights)
Overview of Valamar Riviera
30% 15% 7% 6% 6% 6% 5% 25%
Germany Austria Slovenia Italy Croatia UK The Netherlands Others
Distribution Channels
2
Share of Repeating Guests & Revenues from Direct Booking
(by revenues)
13% 43% 24% 43%*
OTAs Direct
(2016: 19%)
2017 2017
bookings
(2016: 41%)
24% 41%*
2016 2016
15% 29% 30% 50%
MICE &
Groups
Allotments
(2016: 26%)
24% Aim 2020 39%* Aim 2020
20
2015 2015 *net direct booking revenues
(2016: 14%) without agencies feesMarket Segments and Guest Satisfaction 2017
86% 94% 93%
overall guest recommendation of guests are likely
satisfaction rate to return
Premium & Upscale
58%
85%
Overview of Valamar Riviera
Hotels & Resorts:
of our staff was rated as
Online Reputation Index
unbelievable
4,0 89%
Trip Advisor Average Rating Guests Satisfaction
8,5 8,8
Booking.com Average Rating Booking.com Average Rating
2
4% 6%
5% Leisure groups & tours 7% Short stay
MICE
Seniors
14% 7%
Active guests 35% Active guests 40%
Families Families
20%
13% Luxury camping
Seniors
29% 20%
Adults and Adults and 21
couples couplesInvestments Note: All values have been converted from HRK to EUR
according to the average yearly FX, while for 2018 and
further have been converted @ FX EUR/HRK = 7,5
Investment Cycle (EURmn) 2017-2019
EUR 312mn
118
100
94
57
Overview of Valamar Riviera
43 50
41
36
30 30
21 22
12 16 13
7
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017* P2018** P2019***
*EUR 23mn refers to investments under construction (marked in blue). **Valamar Riviera’s 2017/18 investment cycle amounts to 84mn, while 10mn refers to Imperial investments.
*** EUR 82mn refers to Valamar Riviera’s 2018/19 investment cycle, while EUR 18mn to Imperial’s.
2
Investments (2004 – 2017) Depreciation (2004 – 2017)
Average Total Average Total
investments investments depreciation depreciation
EUR 35mn EUR 495mn EUR 25mn EUR 352mn
22Key Portfolio Investments 2018/19 Note: All values have been converted from HRK to EUR
according to the average yearly FX, while for 2018 and
further have been converted @ FX EUR/HRK = 7,5.
Investment Cycle 2018/19 (EUR)*
Overview of Valamar Riviera
82mn 18mn
Valamar Riviera Imperial Rab
Istra Premium Camping Resort (II phase) • • Valamar Carolina Hotel & Residence 4*
Valamar Collection Marea Suites 5* • • Padova Camping Resort by Valamar 3*
Staff Residence • • Other smart projects
Lanterna Premium Camping Resort by
Valamar 4* •
Ježevac Premium Camping Resort by
2
Valamar 4* •
Other smart projects •
100mn
23
* Valamar Riviera and Imperial Rab will ultimately decide on 2019 investments by the end of the year.Key Portfolio Investments 2017/18 Note: All values have been converted from HRK to EUR
according to the average yearly FX, while for 2018 and
further have been converted @ FX EUR/HRK = 7,5
Valamar Collection Girandella Maro Resort Hotel 5*, Rabac Ježevac Premium Camping Resort by Valamar 4*, Krk
▪ EUR 15mn ▪ EUR 3mn
▪ First Kinderhotel in portfolio ▪ Further development and finalization of Lungomare
▪ Family oriented hotel resort concept Premium village, expansion of the existing
restaurant (Craft and Beer concept), new pools with
▪ 149 new premium accommodation units
waterslides, finalization of family beach, etc.
Zablaće Camping Resort by Valamar 4*, Krk
Overview of Valamar Riviera
Valamar Argosy Hotel 4*, Dubrovnik
▪ EUR 8mn ▪ EUR 3mn
▪ 308 units ▪ Upgrade to 4* camping by installing new Premium
▪ Repositioning to mobile homes, building new sanitary unit and other
facilities, further development of camping
▪ Premium accommodation with new facilities and infrastructure, etc.
services
Lanterna Premium Camping Resort by Valamar 4*, Poreč Imperial investments
2
▪ EUR 9mn ▪ Grand Hotel Imperial 4* repositioning = EUR 3mn
▪ Further development of premium accommodation: ▪ Camping Padova 3* new MH zones = EUR 2mn
mobile homes&glamping tents, a new thematic ▪ San Marino Camping Resort 4* MH zone
Premium Maro Village, enlargement of existing finalization = EUR 2mn
Premium Marbello Village and finalisation of
glamping tents village ▪ Other investments = EUR 3mn
Istra Premium Camping Resort by Valamar (I phase), Poreč Other investments and maintenance and FF&E
▪ EUR 8mn ▪ Staff residences and offices projects, beach
▪ I phase of Istra Camping Resort project: improvements, digitalization, bike products, safety &
development of main infrastructure, new 117 plots, parking, branding & signage, project management,
reconstruction of one sanitary unit and development energy savings projects, etc. = EUR 29mn
24
of Family sandy beach (I phase) ▪ Investments maintenance and FF&E = EUR 9mnKey Portfolio Investments 2016/17 Note: All values have been converted from HRK to EUR
according to the average yearly FX, while for 2018 and
further have been converted @ FX EUR/HRK = 7,5
Valamar Collection Girandella Resort 4*, Rabac Ježevac Premium Camping Resort by Valamar 4*, Krk
▪ EUR 36mn ▪ EUR 4mn
▪ 242 keys ▪ 683 units
▪ New service concepts: premium villas, - ▪ Upgrading to premium camping
and adult-
▪ Strategic partnership with DER Touristik
Overview of Valamar Riviera
TUI Family Life Bellevue Resort 4*, Rabac Administration building in Poreč & Dubrovnik
▪ EUR 29mn ▪ EUR 4mn
▪ 372 units ▪ Expansion of the corporate building in and the
▪ Product specialized for families construction of a staff residence in Dubrovnik in
order to meet the needs of additional workspace
▪ Strategic partnership with TUI Northern Europe
Limited, TUI UK and TUI Nordic Holding AB
Lanterna Premium Camping Resort by Valamar 4*, Poreč Small projects and other investments
2
▪ EUR 13mn ▪ EUR 17mn
▪ 2.870 units ▪ Energy saving programs, investments in campings,
investments in IT infrastructure, laundry,
▪ Premium camping
digitalization, beaches,
Zablaće Camping Resort by Valamar 4*, Krk Maintenance
▪ EUR 5mn ▪ EUR 9mn
▪ 654 units ▪ Investments in maintenance, furniture and
▪ Upgrading to upscale camping resort equipment and IT infrastructure maintenance and
equipment
25Key Portfolio Investments 2014 - 2016 Note: All values have been converted from HRK to EUR
according to the average yearly FX, while for 2018 and
further have been converted @ FX EUR/HRK = 7,5
Valamar Collection Isabella Island Resort 4* & 5*, Poreč (2014 - 2016) Valamar Collection Dubrovnik President Hotel 5*, Dubrovnik (2014/15)
▪ EUR 40mn ▪ EUR 20mn
▪ 334 units ▪ 292 units
▪ New service concepts: 270 units at 4* level and 64 ▪ First 5* property in Valamar
units at 5*
Overview of Valamar Riviera
Lanterna Premium Camping Resort by Valamar 4*, Poreč (2014 – 2016) Valamar Zagreb Hotel 4*, Poreč (2013/14)
▪ EUR 17mn ▪ EUR 7mn
▪ 2.8706 units ▪ 230 units
▪ Premium camping ▪ Resort focused on families in high season
2
Krk Premium Camping Resort by Valamar 5*, Krk (2014 – 2016) Valamar Argosy Hotel 4*, Dubrovnik (2013/14)
▪ EUR 7mn ▪ EUR 5mn
▪ 500 units ▪ 308 units
▪ Premium camping ▪ Mediterranean gardens around the resort and new
▪ First 5* camping in Croatia outdoor infinity pool with sea view
26Human Resources 2017 Note: All values have been converted from HRK to EUR
according to the average yearly FX, while for 2018 and
further have been converted @ FX EUR/HRK = 7,5
Valamar Academy Average Gross Salary in 2017 (EUR)
1.135
1.080 2012 941
896 2013 965
Best HR pratice 2014 978
in Croatia
2015 1.041
Overview of Valamar Riviera
2016 1.090
Hospitality Croatia Valamar 2017 1.135
industry Riviera
Facility Team leaders in Department
managers the sales and heads at hotel
marketing sector operations
202 managers graduated
21 4.774
2
since 2007
employees took part
different programs
70% oftheHotel GM attended
Academy of rewarding
employees)
in various awards
and recognitions
programs*
*management excluded (motivated
through annual bonus programs)
▪ Motto: Talents today, managers tomorrow!
▪ TOP 5 in Croatia
▪ Standardized program of education that combines best practices in
▪ More than 6.600 employees ( 1.700 permanent and 4.900 seasonal)
hospitality industry, internal expertise and professional experiences
▪ Best HR Practice: Uplifting Service
▪ 83 thousand hours of education and training in 2017
▪ 56% return rate of seasonal workers (increase to 70% until 2020)
27
▪ High corporate culture ratingsSales & Marketing 2017
Revenue Management Customer Relationship Management
Property 1 Property 2
Occupancy Occupancy
Room price Room price
Overview of Valamar Riviera
Property 3 Occupancy Property 4
Occupancy Booking Occupancy
1.025.000 guests Newsletter & 133.000 Service tailoring and Data analysis for
development in marketing Customer loyalty program personalization decision-making
per database Relationship members support
Room price Room price campaigns
channel
2
Hotels and Reservation
Data collection Segmentation
resorts centre
▪ Increase revenues by optimizing pricing, occupancy and distribution
channels
Guest marketing Camping
Communication Websites
profile resorts
▪ Leverage our market leadership for strategic partnerships with other Perfect
markets and knowledge leaders along the entire value-chain Cleansing /
Metrics Experience
Mergeing
▪ Prolong the season by introducing new programs and defining tailored Creator
actions in a joint effort with destinations and partners
▪ Brand recognition
▪ Proactive distribution strategy favouring own channels ▪ Gain exceptional guest knowledge and establish individual contact points
▪ High and growing proportion of online and direct sales throughout the year to increase guest loyalty and satisfaction 28Valamar Zvonimir Hotel, Atrium Baska Residence 4* & 5* - Baska
1 Introduction
2 Overview of Valamar Riviera
3 Market Overview
4 Financial Overview
5 Share RIVP
6 Detailed Investments Overview
29Note: All values have been converted from HRK to
EUR according to the average yearly FX, while for
Overview of Croatian Tourism Market 2017 (1) 2018 and further have been converted @ FX
EUR/HRK = 7,5. Sources: National Bureau of
Statistics, Eurostat, Ministry of Tourism.
Tourism Revenues Strutcture of Beds in Croatia
EUR bn
CAGR -1 = 6%
12 1%
61% 41%
Private
9
accomodation
21% 35%
6
Camping 22%
1%
3 8%
15% 42%
Market Overview
0 Hotels
2010 2011 2012 2013 2014 2015 2016 2017 E2018 36%
▪ Unlike other sectors of the local economy, tourism has shown growth over
14%
the last 6 years and is returning to pre-crisis levels
3%
Other
3
Guest Structure per Overnights Overnights in Hotels & Camping Resorts
mn
CAGR -1 = 4%
44
40
36
24% 9% 9% 7% 6% 45% 32
Germany Slovenia Austria Poland Itay Other 2011 2012 2013 2014 2015 2016 2017
30Note: All values have been converted from HRK to
EUR according to the average yearly FX, while for
Overview of Croatian Tourism Market 2017 (2) 2018 and further have been converted @ FX
EUR/HRK = 7,5. Sources: National Bureau of
Statistics, Eurostat, Ministry of Tourism.
Level and Growth of Overnight Stays in Valamar’s Regions
Istria (5% CAGR) Kvarner (4% CAGR) Dubrovnik (8% CAGR)
mn mn 3% -1% 7% 6% 7% 2% mn 8% 5% 4% 10% 14% 4%
-2% 1% 7% 10% 10% 2%
25,8 15,0 8,0
21,5 12,0 6,4
17,2 9,0 4,8
12,9
6,0 3,2
8,6
Market Overview
4,3 3,0 1,6
0,0 0,0 0,0
3
Overnights CAGR (10’-17’) Croatian Tourism Outlook Season Prolongation Initiatives
1,6% 1,2% Overnights Spending Number of
Italy France (EURbn) beds
CAGR 4% CAGR 8% CAGR 2%
995.000
14,1
86.000
5,4% 898.496
66.376
Croatia
8,8
3,1% 3,2%
Greece Spain
31
2014 2020 2014 2020 2014 2020Valamar Collection Isabella Island Resort 4* & 5* - Porec
1 Introduction
2 Overview of Valamar Riviera
3 Market Overview
4 Financial Overview
5 Share RIVP
6 Detailed Investments Overview
322017 Growth Drivers Note: All values have been converted from HRK to EUR
according to the average yearly FX, while for 2018 and
further have been converted @ FX EUR/HRK = 7,5
Better
Large
occupancy &
investments
strong
performance
Demand
driven
in portfolio
repositioning
+21% +21%
in 1H 2017 optimization of Sales revenues Operating expenses
distribution &
prices
Financial Overview
Value- Acquisition
added
destination
of Imperial
hospitality 35%
products company Realized adjusted
Increase of EBITDA margin
4
operational (+10 bp)
efficiency
VERY GOOD 2017 EUR 83mn
BUSINESS RESULTS Adjusted EBIDTA
339M 2018 Growth Drivers Note: All values have been converted from HRK to EUR
according to the average yearly FX, while for 2018 and
further have been converted @ FX EUR/HRK = 7,5.
Better
occupancy & Solid
higher demand
(optimization of
1H 2018
operating
+11% +11%
channels and Intensive results Sales revenues Operating costs
investment (w/o Hoteli (w/o Hoteli
ADR) Makarska: +9%) Makarska: +9%)
cycle
Financial Overview
Value- Hoteli
added Makarska
destination hotel group +11%
products Active acquisition EBITDA
management (w/o Hoteli
4
Makarska: +9%)
of operational
efficiency
STRONG 9M 2018 46%
BUSINESS RESULTS EBITDA margin
34Note: Financial information until 2014 refers to Valamar Grupa’s consolidated statements;
Revenues and EBITDA thereafter refers to Valamar Riviera’s consolidated statements. All values have been
converted from HRK to EUR according to the average yearly FX, while for 2018 and further
have been converted @ FX EUR/HRK = 7,5.
Revenues Trend (EURmn) Revenue Structure per Location
CAGR -1 = 11%
280
210
21% 9%
Dubrovnik Island of Rab
140
13%
70 Island of Krk
43%
0 Poreč
Financial Overview
2009 2010 2011 2012 2013 2014 2015 2016 2017 E2018
14%
Rabac
▪ Continuous top line growth due to premium locations, intense targeted
investment in portfolio, revenue managemenet, acquisitions and overall
growth of tourist arrivals in Croatia
4
EBITDA and EBITDA Margin Trend (EURmn; %)
CAGR -1 = 22%
100 92-93 40%
35% EBITDA
75 34% 35% -36% 30%
34% 35% Adj. EBITDA
50 33% 34% 20%
31% 28% 29% EBITDA margin
26%
25 24% 10%
22%
15% Adj. EBITDA margin
0 0%
2009 2010 2011 2012 2013 2014 2015 2016 2017 E2018
▪ Additional EBITDA growth came as a result of positive returns from investment cycle, realized cost savings and business efficiency and acquisition of
hospitality companies 35Key Operational Indicators Note: All values have been converted from HRK to EUR
according to the average yearly FX, while for 2018 and
further have been converted @ FX EUR/HRK = 7,5
Trend Analysis of Key Business Indicators (EURmn)
10%
240
200
160
12%
120
80 13%
Financial Overview
40
0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
NET REVENUES INVESTMENTS GOP EBITDA CAGR
4
Overnights per Product (thousands) Overnights per Destination (thousands)
8% 6%
6.000 6.000
5.000 5.000
3%
4.000 4.000
3.000 3.000
53% 1% 8% -2%
2.000 2.000
16% 5%
1.000 1.000
0 0
Premium Upscale Midscale Economy Valamar Riviera Istria Krk Rab Dubrovnik Valamar Riviera
2011 2012 2013 2014 2015 2016 2017 CAGR 2009 2010 2011 2012 2013 2014 2015 2016 2017 CAGR 36Valamar Collection Girandella Resort 4* & 5* - Rabac
1 Introduction
2 Overview of Valamar Riviera
3 Market Overview
4 Financial Overview
5 Share RIVP
6 Detailed Investments Overview
37Overview Note: All values have been converted from HRK to EUR
according to the average yearly FX, while for 2018 and
further have been converted @ FX EUR/HRK = 7,5
No. IN TOP
EUR EUR
2 630mn 310mn 10
Most active traded Shares with the
share on ZSE Market Free float largest mcap
capitalization
Share RIVP
VALAMAR RIVIERA IS THE ONLY PUBLICLY LISTED COMPANY IN CROATIA
OFFERING INVESTORS SIGNIFICANT EXPOSURE TO AN ATTRACTIVE AND
5
GROWING ACCOMODATION SEGMENT OF THE CROATIAN TOURISM MARKET
AWARD: Most liquid
AWARD: Share of the share on ZSE AWARD: Share with the
year in 2017 for the in 2017 highest volume
AWARD: Best Investor AWARD: Best managed
sixth consecutive increase on ZSE
Relations in year company in the leisure
in 2015 sector in CEE
2015, 2017% 38
2018 regionPerformance on the Croatian Capital Market Note: All values have been converted from HRK to EUR
according to the average yearly FX, while for 2018 and
further have been converted @ FX EUR/HRK = 7,5
Share Price Performance Average Daily Turnover (EURk)
ex dividend date ex dividend date 1) Hrvatski telekom (HT) 125
225%
2) Valamar Riviera (RIVP) 109
200% +88%
3) Adris (ADRS & ADRS2) 89
175%
4) Podravka (PODR) 52
150%
ex dividend date 38
125%
ex dividend date 6) Atlantic grupa (ATGR) 33
+2%
Share RIVP
100% 7) Viktor Lenac (VLEN) 31
75% 8) Arena Hospitality Group (ARNT) 29
17.12.2014 13.7.2015 29.1.2016 17.8.2016 1.3.2017 18.9.2017 5.4.2018 23.10.2018
NB: Period: Jan 2018 Sep 2018
CROBEX index (reference index of the Zagreb Stock Exchange) RIVP Block transactions (over EUR 265k) are not included.
5
Dividend and Share Buy-Back (SBB) Dividend Yield
2,8%
EUR EUR EUR EUR EUR
2,5%
2,5%
8,3mn 9,1mn 9,8mn 13,1mn 14,9mn 2,2% 2,1%
Dividend +10% Dividend +8% Dividend +34% Dividend +14% Dividend 1,9%
2,0%
1,5%
EUR EUR EUR EUR
/ 1,0%
1,1mn 2,8mn 4,9mn SBB 2,2mn
SBB +155% SBB +75% SBB / / SBB 0,5%
0,0%
2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 39RIVP-R-A Insight Note: All values have been converted from HRK to EUR
according to the average yearly FX, while for 2018 and
further have been converted @ FX EUR/HRK = 7,5
Valamar Riviera Share Analyst Coverage (1y target price)
Zagreb Stock Exchange = RIVP
Ticker Bloomberg = RIVPRA CZ InterCapital Securities EUR 6,4 (Jul 2018)
Reuters = RIVP.PAp
ERSTE Group
ISIN code: HRRIVPRA0000 EUR 6,0 (Apr 2018)
Number of issued shares: 126.027.542
ALTA invest EUR 6,3 (Mar 2018)
PPS (on 23 Oct 2018) EUR 5,1
15 December 2014 Raiffeisenbank Austria
Date of listing (ZSE):
(126.027.542 shares)
Share RIVP
EUR 6,1 (Feb 2018)
CROBEX (portion 9,8%)
CROBEXtr (portion 9,8%)
Zagreb Stock Exchange indices in which FIMA Securities EUR 6,4 (Dec 2017)
CROBEX10 (portion 15,5%)
CROBEXplus
Pekao Investment Banking (UniCredit)
5
CROBEXturist EUR 6,4 (February 2017)
Vienna Stock Exchange indices in which SETX (portion 5,6%)
CROX (portion 19,6%)
MSCI indicex: MSCI Frontier Markets Indexes
▪ Valamar Riviera will, in line with the ZSE rules, publish financial results on
a quarterly basis, but presentations for investors, road shows and
conference calls will be held at the end of the third quarter of each year
due to the dependency on peak season High High
High
corporate investors
transparency
▪ The management has committed to a minimum of EUR 0,066 per share governance
standards
relations
annual dividend standards standards
401 Introduction
2 Overview of Valamar Riviera
Villa Polesini - Porec
3 Market Overview
4 Financial Overview
5 Share RIVP
6 Investments Overview
41Investments in 2017/18 (1)
Valamar Girandella Maro Resort 5* (149 units)
EUR 15mn
• First Kinderhotel in portfolio; Kinderhotels Europa is a marketing
association that brings together high-quality premium family hotels under the
Investments Overview
Kinderhotels
• Valamar Girandella Maro Resort Hotel 5* is a premium hotel offering 149 keys,
with services and design tailored according to the needs of families with
children of various age groups
• The concept of the lobby, restaurant and pool complex as well as the interior
6
design of hotel accommodation is centered around the idea of family holidays
42Investments in 2017/18 (2)
Valamar Argosy Hotel 4* (308 units)
EUR 8mn
• Investments are earmarked to improve the quality of accommodation and
Investments Overview
• Investments will include complete renovation of rooms and bathrooms;
enlargement of outdoor pool and sunbathing area; other improvements of
the product (main restaurant and kitchen, lobby & reception, lounge and
library area, horticulture and other)
6
43Investments in 2017/18 (3)
Camping Lanterna Resort 4* (2.870 units)
EUR 9mn
• The resort will feature a new premium mobile home zone designed
Maro
Investments Overview
• Maro -oriented and includes child-friendly
services and facilities
• The glamping zone will be completed, the sports zone will be renovated and
will feature new facilities and services.
6
44Investments in 2017/18 (4)
Camping 4* (683 units)
EUR 3mn
• Investments are focused on improving services and upgrading the campsite
from 3* to 4* with new high quality mobile homes, further development and
Investments Overview
finalisation of Lungomare Premium village, new pools with waterslides,
finalisation of family beach, expanding the offer by enlarging existing
restaurant, infrastructure and other technical requirements
6
45Investments in 2017/18 (5)
Grand Hotel Imperial 4* (136 units)
EUR 3mn
• Renovation
accommodation
Investments Overview
• Guests will be welcomed by modernly decorated double rooms, a premium
restaurant and many other enhanced facilities
6
46Investments in 2016/17 (1)
Bellevue Family Life Resort 4* (372 units)
EUR 29mn
• Strategic partnership with TUI Northern Europe Limited, TUI UK
and TUI Nordic Holding AB for a three-year period (seasons:
Investments Overview
2017, 2018 and 2019 with occupancy guarantee)
• With a 154 day flight program and through new source markets,
TUI plans 76.000 arrivals in the next three years
• Product specialized for families
6
47Investments in 2016/17 (2)
Valamar Girandella Resort 4* (242 units)
EUR 36mn
• New service concepts:
• premium villas with personalized service
Investments Overview
• -
• -
• Part of the strategic development plan of repositioning the Rabac
destination as a 4* holiday destination
6
48Investments in 2016/17 (3)
Other investments
EUR 52mn
• Almost 25% of the total amount will be invested in improving the quality of
3* and 3*
Investments Overview
(237 new mobile homes in total)
• A range of other projects to create new facilities and amenities, improve the
existing ones and considerably increase the experience quality for all the
destinations
6
Campsite Lanterna 4*
49
Campsite 3* Campsite Campsite Krk 5*Key Portfolio Investments in 2014 - 2016 (1)
Valamar Isabella Island Resort 4* & 5* (334 units)
EUR 40mn years
• The largest single investment of Valamar Riviera
2015-
• New service concepts (64 units at 5* level and 270 units at 4* level; 2016
Investments Overview
• First Valamar Riviera property in Istria
6
50Key Portfolio Investments in 2014 - 2016 (2)
Camping Lanterna 4*
EUR 17mn
years
• The largest single investment in the camping segment 2014-
• No.1 EBITDA in Valamar Riviera (EUR 7,3mn)
2016
Investments Overview
• Premium campsite resort (755 mobile homes in total, o/w 195 premium
ones with personalized service; 25% of campsite area is covered by
mobile homes)
6
51Key Portfolio Investments in 2014 - 2016 (3)
Camping Krk 5*
EUR 7mn years
• EUR 6k)
2014-
Detailed Investments Overview
• Premium campsite resort with personalized service for guests (124 2016
mobile homes in total, o/w 63 premium ones with personalized
service; 30% of campsite area is covered by mobile homes)
6
52Key Portfolio Investments in 2014 - 2016 (4)
Valamar Dubrovnik President 5* (292 units)
EUR 20mn
year
• Upgrade from to hotel resort 2014
Detailed Investments Overview
• First property in Valamar Riviera
• Premium Valamar service concepts
• Indulging experience
6
53Key Portfolio Investments in 2014 - 2016 (5)
Valamar Zagreb Hotel 4* (230 units)
EUR 7mn
year
• Upgrade from to hotel resort 2014
• Resort focused on families in high season
Investments Overview
• Additional value to the portfolio by increasing service quality
and financial performance
6
54Key Portfolio Investments in 2014 - 2016 (6)
Valamar Argosy Hotel 4* (308 units)
EUR 5mn
year
• Upgrade from to hotel resort 2014
• Mediterranean gardens around the resort and new outdoor
Investments Overview
infinity pool with sea view
• Attractive beach Cava
6
55Disclaimer
This presentation has been prepared, and approved for communication by Valamar Riviera Plc . These materials and the oral
presentation do not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe
for, any securities of the Company nor should they or any part of them or the fact of their distribution form the basis of, or be relied on in
connection with, any contract or investment decision in relation thereto.
This presentation includes certain forward-looking statements. Actual results could differ materially from those included in the forward-
looking statements due to various risks and uncertainties, including but not limited to changes in business, economic and competitive
conditions, regulatory reforms, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings and availability of
financing. These forward-looking statements represent the Company's expectations or beliefs concerning future events and involve known
and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or
implied in such statements. None of the Company, their advisers or any other person accepts any liability for any loss howsoever arising,
Disclaimer
directly or indirectly, from the issue of this document or its contents.
The third party information contained herein has been obtained from sources believed by the Company to be reliable. Whilst all reasonable
care has been taken to ensure that the facts stated herein are complete and accurate and that the opinions and expectations contained
herein are fair and reasonable, no representation or warranty, expressed or implied, is made by the Company or its advisors, with respect to
the completeness or accuracy of any information and opinions contained herein.
These materials include non-IFRS measures, such as EBITDA. The Company believes that such measures serve as an additional indicators
of the Company's operating performance. However such measures are not replacements for measures defined by and required under
IFRS. In addition, some key performance indicators utilized by the Company may be calculated differently by other companies operating in
the sector. Therefore the non-IFRS measures and key performance indicators used in these materials may not be directly comparable to
those of the competitors.
The information and opinions contained in this presentation are provided as at the date of this presentation and are subject to change
without notice.
This document may not be distributed and may not be reproduced in any manner whatsoever any distribution or reproduction of the
attached document in whole or in part is unauthorized.
56Notes (1)
Notes
57Notes (2)
Notes
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