investor day presentation 2018 investor day...2 overview of business plan execution and strength of...
TRANSCRIPT
Investor Day Presentation November 9th, 2018
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Disclaimer
This presentation is strictly confidential, it has not been independently verified and is being furnished to you solely for your information. It may not be reproduced or
redistributed to any other person, and it may not be published, in whole or in part, for any purpose. By receiving this presentation, you become bound by the above referred
confidentiality obligation. Failure to comply with such confidentiality obligation may result in civil, administrative or criminal liabilities. The distribution of this presentation in
other jurisdictions may also be restricted by law and persons who obtain this presentation should inform themselves about and observe any such restrictions. This material has
been prepared solely by Trust F/1596 (FibraHotel), a Mexican Trust (“FibraHotel”) for informational and discussion purposes only.
This presentation does not constitute or form part of any offer to sell or issue or any solicitation of any offer to buy or subscribe for any securities (including any certificados
bursátiles fiduciarios inmobiliarios (“CBFIs”)) in the United States or elsewhere nor shall it or any part of it form the bas is of or be relied on in connection with any contract or
commitment to purchase securities nor does it constitute the basis, in whole or in part, for the execution of any agreement or commitment of any kind. Specifically, this
presentation does not constitute a placement prospectus or equivalent document, and the information contained herein is general in nature, and it distributed for information
purposes only. Securities may not be offered or sold in the United States absent registration or an exemption from registration under the US Securities Act of 1933, as
amended (the “Act”). FibraHotel and Deutsche Bank México, S.A., Institución de Banca Múltiple, División Fiduciaria, in its capacity as trustee of FibraHotel have not and do
not intend to register any securities under the Act or offer any securities to the public in the United States. Any decision to purchase CBFIs in any offering should be made
solely on the basis of the information to be contained in the Mexican prospectus to be registered with the Mexican National Banking and Securities Commission (Comisión
Nacional Bancaria y de Valores, or the “CNBV”) or any offering circular to be published in due course relating to any such offering. No representation or warranty, express or
implied, is given or will be given by or on behalf of FibraHotel, the initial purchasers, the Mexican underwriters or any of their respective affiliates or agents, or any of such
person’s directors, officers, employees or advisors or any other person as to the accuracy, completeness, fairness or materia lity of the information or opinions contained in this
presentation, including any estimate contained herein, and any reliance you place on them will be at your sole risk. In addit ion, no responsibility, obligation or liability (whether
direct or indirect, in contract, tort or otherwise) is or will be accepted by FibraHotel, the initial purchasers, the Mexican underwriters or any other person in relation to such
information or opinions or any other matter in connection with this presentation or its contents or otherwise arising in connection therewith.
The information in this presentation includes forward-looking statements, which are statements other than statements of historical fact, and are based on current expectations,
beliefs, and predictions about future events. These statements can be recognized by the use of words such as “believes”, “ant icipates”, “depends”, “may”, “plans”, “will”,
“estimates”, “projects”, “trend”, “expects” or words of similar meaning. These forward-looking statements are subject to known and unknown risks, uncertainties and
assumptions about FibraHotel, its prospects, results of operations, financial condition and the economic environment in which it operates that may prove to be incorrect. Such
forward looking statements are not guarantees of future performance and the events described in such forward-looking statements may not occur and FibraHotel’s actual
results may differ significantly from those in such forward-looking statements. You are cautioned not to place undue reliance on these forward looking statements, which are
based on the current view of the management of FibraHotel. Neither FibraHotel nor Administradora Fibra Hotelera Mexicana, S.A. de C.V. (including any of their respective
affiliates, officers, directors, agents or employees) assumes any responsibility or liability with respect to any forward-looking statement that is not achieved.
The securities described herein have not been registered under the Act or any other state securities law of the United States. Consequently, such securities will not be offered
or sold in the United States except to qualified institutional investors, pursuant to Rule 144A of the Act, and outside of the United States to non-U.S. persons pursuant to
Regulation S of the Act.
The recipients of this presentation should not construe the contents hereof as legal, tax, or investment advice, and should consult their own advisers in this regard.
The information in this presentation related to the industry in which FibraHotel operates, including projections and estimates, was obtained from various external data sources
and neither any underwriters or placement agents, nor FibraHotel, assumes any liability regarding such information. This presentation and its contents are the property of
FibraHotel and cannot be reproduced or redistributed to any person, in whole or in part, for any purpose, without the prior written consent of FibraHotel.
By attending this presentation or by accepting to view any of the materials presented, you agree to be bound by the foregoing limitations and not to distribute, disclose or
provide any information discussed today to any other persons. Neither the CNBV nor any other authority has approved or disapproved the contents of this presentation, or the
adequacy or truthfulness of the information contained herein.
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Welcome and agenda
Welcome and registration open - 11:45am
Optional lunch and hotel tour - 2:00pm
Start Finish Speaker Title Topic
12:00 12:30 Simon Galante CEO of FibraHotel Overview and strategic situation
12:30 12:45 Guillermo Bravo CIO of FibraHotel Investments and developed hotels
12:45 13:10Jose Carlos
AzcarragaCEO of Grupo Posadas Lodging in Mexico
13:10 13:40
Simon Galante,
Edouard Boudrant,
Guillermo Bravo
FibraHotel management Operating and financial trends
13:40 13:55 Edouard Boudrant CFO of FibraHotel Balance sheet and financing
13:55 14:00 Simon Galante CEO of FibraHotel Closing remarks
Agenda
2018 FibraHotel investor day event - Live Aqua San Miguel de Allende
Overview and Strategic Situation Simon Galante - CEO
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FibraHotel Investor Day 2018 objectives
Continue leading investor communication, transparency and
corporate governance
Always available to investors
1
3 Overview of operating results and financing
Lodging trends in 2018 and going forward
Strong balance sheet position with available financing
Management has been here before and knows how to operate across the cycle
2 Overview of business plan execution and strength of current portfolio
Finished development cycle. Added very valuable landmark assets
Focus on CBFI buybacks
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FibraHotel’s Evolution as the Lodging Leader in Mexico
34 hotels: 17 hotels + 13 acquired + 4 development
3,815 rooms in operation
2 operators, 3 brands
Portfolio of select and limited service hotels
MXN$5bn in assets
55 hotels: 39 hotels + 16 developments – target 100
4,731 rooms in operation
2 operators, 4 brands
Added development as core strategy, added
internationally branded and full service hotels
MXN$10bn in assets
100 hotels based on average ~120 keys (reached
12,000 rooms)
86 hotels: 85 operating hotels + 1 development
12,300 rooms in operation (12,555 total rooms)
3 operators, 13 brands
Leader in the lodging sector with a diversified
portfolio (business traveler, tourism, resorts,
conventions, events and groups)
~MXN$17bn in assets
No
ve
mb
er
2012
Ma
y
2013
No
ve
mb
er
2018
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The Best Hotel Portfolio in Mexico…
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FibraHotel Diversification Geographic Distribution of the Current Portfolio
Operators
Brands
Segments
12,555
Rooms
86
Hotels
3
13
5
…a Unique and Diversified Mix of Hotels
Limited
Service
Selected
Service Full
Service
Extended
Stay
Resort
GDP of States with FIHO Presence¹
GDP of States without FIHO Presence¹
Op
era
tin
g
Po
rtfo
lio
Segment by Asset
Value1
MXN / USD / MXD by
Asset Value1
Beach / City by Asset
Value1 Comments
~47% resort/full service, ~48% USD/MXD
5,716 rooms in five main cities (MEX, MTY, GDL, QRO, PUE)
2,520 rooms in Mexico City Metropolitan Area
>5,000 Fiesta Inn rooms, >1,800 international branded rooms
Selected-Service Limited-Service
Full-Service Resort
Extended Stay
Selected-Service Limited-Service
Full-Service Resort
Extended Stay
City Beach
City Beach MXN MXD USD
MXN MXD USD
MXN MXD USD
Presence in 26 states across the country, representing 93% of GDP
75 stabilized hotels with 10,794 rooms
10 ramp-up hotels with 1,506 rooms
1 hotel under development with 255 rooms
Mexico City 7%
93%
39%
12%
24%
23%
1%
73%
27%
52%20%
28%
Source: Company filings, INEGI (GDP as of 2015). 1 Asset Value as of 9/30/2018. The classification of a hotel as USD / MXN / MXD is based solely on management's classification of a hotel, the
percentages in the charts do not represent the actual currency of the revenues generated at these hotels and instead represent the asset values of the hotels as classified by management
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Live Aqua San Miguel is the Best Urban Resort
Source: Company filings. 1 Travel & Leisure Ranking 2017, 2018
Pictures of the Live Aqua San Miguel de Allende hotel
Five year process to find and
develop the right asset
Opened on November 2018
153 luxury rooms
In the heart of downtown San
Miguel de Allende
San Miguel was named the best
city in the world two consecutive
years1
~ 1500 m2 of flexible meeting and
event space
Investment of Ps $730 mm
Hotel will focus on leisure and high
end group and convention
business
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% stabilized 96% 82% 66% 60% 59% 77% 89%
% Ramp-up 0% 9% 13% 23% 24% 20% 8%
% development 4% 9% 21% 17% 17% 4% 4%
$ 4.6 $ 6.8 $ 7.2 $ 7.9 $ 8.7
$ 13.4 $ 15.5 $ 0.8 $ 1.5
$ 3.0 $ 3.5
$ 3.4 $ 1.3
$ 0.2
$ 0.8 $ 2.3 $ 2.3
$ 2.6
$ 0.7 $ 0.7
$ 4.8
$ 8.4 $ 11.0 $ 13.2
$ 14.7
$ 17.5 $ 17.5
2013 2014 2015 2016 2017 3Q 2018 2019E
We have finished the development cycle
Source: Company filings
Fiesta Americana Mexico City Viaducto Via 515
Location: Mexico City
Segment: Full-Service
Rooms: 255
Opening: 2019
Investment1: MXN$650mm
Over Ps. $17.5bn of assets, Ps. $15.5bn stabilized
Undepreciated
PP&E
MXN$bn
Only one hotel remains on our development portfolio
Finished the development cycle at the right time
Different risk profile of the company
Ps. ~1.3bn in recent
openings including:
Live Aqua San
Miguel de Allende
Rooms: 153
Investment:
MXN$730mm
Fiesta Americana
Satelite
Rooms: 223
Investment:
MXN$540mm
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FibraHotel 2013 2014 2015 2016 20179mo 2018
Annualized
´13-´18A
CAGR
9mo
2017
9mo
2018
% y-o-y
change
Rooms in operation 5,547 7,660 8,507 10,422 11,273 12,147 15% 10,980 12,147 11%
Undepreciated PP&E (@cost) 5,109 7,782 10,343 12,160 13,163 17,207 24% 12,863 17,207 34%
% y-o-y growth 52% 33% 18% 8% 31% 34%
Occupancy (comparable 46h) 62.9% 63.6% 65.5% 68.6% 68.5% 67.2% 426 bps 68.4% 67.2% (122 bps)
RevPAR growth (comparable 46h) $559 $588 $627 $701 $747 $754 6.5% $739 $754 2%
% y-o-y growth 5% 7% 12% 7% 1% 2%
Revenues (Ps. mm) $1,032 $1,531 $2,008 $2,635 $3,436 $4,043 27% $2,501 $3,032 21%
EBITDA (Ps. mm) $260 $371 $498 $656 $902 $1,167 30% $655 $876 34%
% y-o-y growth 43% 34% 32% 37% 29% 34%
EBITDA margin 25.2% 24.3% 24.8% 24.9% 26.2% 28.9% 372 bps 26.2% 28.9% 270 bps
EBITDA per room (Ps. 000´s) $46.8 $48.5 $58.6 $63.0 $80.0 $96.1 13% $59.6 $72.1 21%
AFFO (Ps. mm) $337 $424 $429 $494 $669 $857 18% $435 $643 48%
AFFO / CBFI (Ps.) $0.76 $0.86 $0.87 $1.00 $1.05 $1.06 6% $0.77 $0.79 4%
% y-o-y growth 13% 1% 15% 5% 4%
FIHO12 Weigthed Average Share Price $22.64 $22.31 $18.18 $14.50 $13.88 $11.56 (11%) $14.36 $11.56 (19%)
% y-o-y growth (1%) (18%) (20%) (4%) (17%) (19%)
Total Shareholder Return 11.9% 14.0% (27.9%) (4.2%) (9.5%) (7.4%) (2%) 5.4% 10.6%
Interest rate (TIIE period end) 3.8% 3.3% 3.6% 6.1% 7.6% 8.1% 17% 7.4% 8.1% 10%
Asset
Org
anic
Fin
ancia
lM
ark
et
Proven Business Plan Execution Focused on Value
Creation and Portfolio Improvement
Source: Company filings. Note: 2018A represents first 9 months annualized
Have paid Ps. 5.37 in distributions since IPO, more than 3.0 billion Pesos
Business Plan of sustainable AFFO / CBFI growth in the mid-term
Consistent growth, even after a challenging Q3 2018
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337 424 429 494669
857
2692
$337$424 $429
$494$669
$1,126
2013 2014 2015 2016 2017 9mo2018A
DividendsCBFI buybacks
Our assets, with an average age of less than seven years trade at an important discount when compared
to the historical cost of the properties
Enterprise Value3
MXN$9,567mm
12,300
In Operation
MXN$787,627
USD$39,3814 MXN$1,328,289
FIHO’s Historical Cost 41% Discount vs FIHO’s
historical cost
Attractive Valuation Turns our Focus to CBFI Buybacks
Proven Growth in Return to Shareholders over time
Current 9M18 Annualized Yield > 10%
Since IPO distribution per CBFI CAGR of 5.6%
Since IPO distributed Ps. 5.37 per CBFI (>Ps. 3.0bn)
Equity issuance at Ps. $13.75 in Q3 2017
YTD repurchased ~23.8mm or 2.9% of CBFIs (@11.29)
Strong EBITDA growth
8.2x EV/EBITDA 9M´18 annualized
6-yr EBITDA CAGR of 28%
9mo 2018 EBITDA margin of 28.9%
Improved portfolio quality (full-service)
Assets driving margin expansion
Source: Company filings. 1 Based on period´s VWAP CBFI price. 2 CBFIs repurchased as of November 7th, 2018; 3 Enterprise value calculated assuming 805mm of CBFIs with economic rights, a
share price of MXN$10.00, net debt of $2,580mm adjusted by the cash invested in developments of $1,072mm. 4 Calculated using an exchange rate of $20 MXN/USD
LTM dividend per share and yield1 Capital returned to shareholders
$ 0
.87
$ 0
.89
$ 0
.95
$ 1
.02
$ 1
.06
$ 1
.17
$ 1
.07
$ 1
.05
$ 1
.10
$ 1
.05
$ 1
.08
6.0%5.9%7.0%
7.1%7.2%
7.7%
7.6%8.3%10.0%
9.0% 8.9%
1Q
16
2Q
16
3Q
16
4Q
16
1Q
17
2Q
17
3Q
17
4Q
17
1Q
18
2Q
18
3Q
18
LTM Dividend per CBFI LTM Dividend Yield
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Sponsor is Aligned with Investor on its Large
Ownership, and is Fully Accountable
Best Alignment is based
on a large ownership
and accountability
Sponsor has a six year
history of doing the
right thing
Recognize outside
advisor structure is not
perfect, and currently
looking at alternatives
Sponsor is the owner of >20% of outstanding CBFIs
Fully subscribed every offering, from $18.50, to $24.95, to $13.75. Consistently acquired shares in the open
market and have not sold one CBFI
Significant net outside investment by Sponsor into FIHO
Best-In class sponsor
An Owner and RE
Entrepreneur who
created the company, not
a manager
Critical in crafting
FIHO´s strategy
Best possible alignment comes from an involved owner with a large ownership stake (>20% of CBFIs)
Analyzing and open to internalization and other best practices to improve corporate governance
Sponsor with the best relationships in the Real Estate and Hospitality sectors. Most FIHO deals have
been self-sourced, a majority of those from the sponsor´s relationships
FibraHotel´s strategic leadership in market has been defined and executed by the sponsor. Since inception FibraHotel has set the strategy which other hotel companies have tried to emulate such as:
(i) Hotels in mixed-use projects, (ii) First Fibra to enter and exit a large development phase to enhance
portfolio and returns, (iii) repositioned portfolio into full-service and landmark assets with higher value, (iv)
entered resort sector via an accretive acquisition of a large stabilized asset in Cancun, and including a
minimum rent component, (v) Focus on a fortress balance sheet
Sponsor is always available to investors and spends a large component of their time directly in the business
Fee based on undepreciated assets could incentivize asset growth without taking into account AFFO/CBFI (A:
Ownership stake is more important than fees)
External advisor in other markets has changed to internalization (A: Not opposed to internalization, need to find
mechanism to keep sponsor in business)
Corporate governance (A: Always looking to improve, open to any suggestions)
Since IPO, AFFO per CBFI has increased 41% or 6% CAGR
Have always made decision in the best interest of all shareholders
Open to feedback and willing to improve governance (proposed assemblies to exclude cash in fee calculation,
didn’t charge extra fee in Q4´17, repurchase CBFIs, added an independent TC member, etc.)
Source: Company filings
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Operating
performance
Experienced
management
team and
sponsor
Summary and overview of current situation
Investments;
Finished
Development
Cycle
Source: Company filings
Fortress
Balance
Sheet
Management views
We are confident on the quality of our assets
Diversified portfolio. Business, conference, & leisure
travelers. All segments and regions. MXN and USD
Some cities/regions continue strong performance
Cancun has better numbers on the books
Maintain leading RevPAR penetration
Limited growth in supply expected
Considerations
Demand uncertainty will continue
Headwinds from new government transition period
(changes at the national, state and local levels)
High levels of occupancy in many cities that
could become more competitive
Cost pressures from energetics and higher
inflation
ADR pressure in Cancun market
Developments were strategic and very valuable
Only one hotel in process to open in Q4 2019
Additional pipeline opportunities are available but
currently the best investment is to buyback CBFIs
Still have embedded growth. Focus on ramp-up
Additional interest expense from hotels coming in line
Some properties continue their ramp-up phase
Volume limits the amount of CBFIs that can be
purchased in the market
Firepower is available to grow, but also limited
The right management team to execute across cycle
Asset management focus
Highly aligned sponsor
Focus on the business and control what we can
control. Try to limit the external impacts from market
and macro dynamics
Some investors against an external advisor structure
Comfortable debt situation with 20% LTV and 2.3x
net debt to LTM EBITDA
No amortization wall; Hedged interest rate exposure
Access to additional credit lines and optionality to add
USD debt
Cost of funding has increased
Additional hedges will be at higher rates or more
expensive
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FibraHotel´s Investment Thesis Remains Intact
Open Architecture with Leading Brands and Operators
The Best Hotel Portfolio in Mexico. Unique and Well Diversified
Hotels with Growth Potential
Attractive Valuation with Proven Business Plan Execution
Lower Risk Profile as Most Hotels will be Stabilized by 2019.
Finished Development Cycle that Rounded Out the Portfolio
Fortress Balance Sheet with a Prudent Leverage Policy
Experienced Management Team plus Best in Class Sponsor with
Strong Long-Term Alignment of Interests 6
5
4
3
2
1
Investments and Developed hotels Guillermo Bravo CIO
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Development of the Live Aqua San Miguel de Allende
Initial project challenges included:
Adapt the existing structure. Incorporate the natural beauty of a unique location in downtown next to a dam
Design a modern and luxurious hotel that could pair Live Aqua’s lifestyle brand with San Miguel’s traditional style
Plan efficient areas to fit over 150 rooms and 1,500m2 of meeting and event space to make the concept viable
Create a unique landmark destination that would become a “must visit” in San Miguel de Allende. Surround the
hotel with art and the best food and beverage concepts
Original
structure as
acquired
Initial design
room and
façade renders
+
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Development of the Live Aqua San Miguel de Allende
Development process
Pictures of the hotel
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Development of the Live Aqua San Miguel de Allende
Pictures of the hotel
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Casa Dragones Cigar Bar
Terrace
Development of the Live Aqua San Miguel de Allende
Lobby, Bakery and La Caty Boutique Store
Eduardo Palazuelos’ Zibu restaurant
Pool Spice Market Restaurant Lobby bar
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Overview of other recently developed hotels
146 select service rooms in Mexico City
Opened in February 1st, 2018
Investment of over Ps. $240mm
164 full service rooms in Boca del Rio, Veracruz
Opened in November 11th, 2017
Investment of over Ps. $250mm
AC by Marriott Veracruz Courtyard by Marriott Toreo
Source: Company filings
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Pictures of the Fiesta Americana City rooms
Fiesta Americana Satelite was based on the Fiesta
Americana City, a unique and profitable product
Source: Company filings
Based on the Fiesta Americana City hotel
Opened on September 24th, 2018
With 223 full service rooms in Mexico City
Located inside the Sentura Tlalnepantla mixed use complex
The best hotel in the northern Mexico City area
Over 600m2 of meeting and event space
Investment of ~Ps $540mm
Targeting, business, convention and group travelers
Penetrate the upscale market in Mexico with efficient full-
service hotels that have the right room size and attractive public
areas coupled with large meeting and event space
Ideal for mixed use projects that offer alternatives such as
restaurants, cinemas, offices and other components
Revamped Fiesta Americana City concept is ideal for FIHO
A full service hotel with >180 rooms that can be developed in
the US$100k to US$130k per key range
Target ADR of US$100 to US$130
Efficient prototype able to deliver attractive margins (closer to
select-service hotels than to luxury hotels)
Fiesta Americana City hotels
Fiesta Americana Mexico Satelite
Pictures of the Fiesta Americana Satelite Hotel
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1
3 2 4
The hotel is in a strategic location in Mexico City, expanding our
presence in largest GDP generator in the country
On Viaducto one of the city´s main highways. Will be newest
hotel near the existing airport (current inventory is dated)
In addition to the airport and nearby industrial parks, the
hotel will be located near several leisure demand drivers
including: (i) Palacio de los deportes, (ii) Autódromo
Hermanos Rodriguez (Formula 1), (ii) Foro Sol, (iv) Ciudad
Deportiva Magdalena Mixuca, (v) Diablos Rojos de Mexico
baseball stadium
Located Inside the Via 515 mixed-use project
38k m2 of office GLA, 10k m2 of retail GLA and the hotel
Over 100k m2 constructed on 15.6k m2 of land
Fiesta Americana City concept with 255 full-service rooms
Almost 14,000m2 constructed
Over 550m2 of meeting space
Estimated investment of Ps. $650mm
Price per key <US$130,000
Acquired the building core and shell. Interiors and FF&E will
be executed by FibraHotel through subcontractors
Estimated to open in Q4 2019
Fiesta Americana Viaducto
Source: Company filings
Investment rationale Strategic location in Mexico City
Via 515 Mixed-use project
1) Mexico City International airport
2) Autódromo Hermanos Rodríguez
3) Palacio de los Deportes
4) México-Puebla highway,
5) Zaragoza industrial zone
Fiesta Americana Viaducto Via 515
5
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Fiesta Americana Viaducto
Source: Company filings
Renders Construction progress to date – structure is finished
Layout plans
Level 3
Level 4
Level 5
Level 6
Level 7
Level 8
Level 2
Level 1
Public Areas
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$47
$75
$100
$135
$173
$200
2013 2014 2015 2016 2017 9mo2018A
Asset management and investment of maintenance
capex is a key component of our business model
Source: Company filings. Note: 9mo 2018A refers to the first nine months of 2018 annualized
March 2018 - Fiesta Inn Morelia
Add different customer base with rates &
margin optimization
Better brand positioning in the market
Opening of the Camelinas express
tunnels (the largest infrastructure
investment in the city)
Substantial positive impact expected in
2019 results
Two hotels rebranded during 2018
July 2018 – Gamma Guadalajara
Located in downtown Guadalajara
Access larger group and corporate
business customers (smooth out leisure
visitors)
Looking for better engineering,
maintenance and administrative control
Maintenance capex investment is significant Capex reserve over time (Ps. $mm)
FibraHotel has a maintenance capex policy of reserving up
to 5% of total revenues
Reserve is adjusted from AFFO to maintain the hotels in
optimal shape over time (on top of normal maintenance)
As of Q3, the reserve currently stands at Ps. 130mm
In 9mo 2018 FIHO has invested ~ Ps. $119mm in
maintenance capex broken down as follows:
Ps. $30mm in the buildings (25%)
Ps. $33mm in back of the house including preventive
maintenance, machinery and equipment (28%)
Ps. $56mm in property improvements such as FF&E,
brand standards, etc. (47%)
Capex reserve has grown in line with revenue growth
2018 maintenance capex reserve will be over Ps $200mm
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Fiesta Americana Hacienda Galindo hotel
Source: Company filings
Pictures of the remodeled Fiesta Americana
Hacienda Galindo
Acquired in July 2017
168 full service rooms
Acquired through an up-front payment
and second payment based on hotel
results
Investment to date in renovation of ~ Ps.
$150mm. A future payment in 2020
based on 10x EBITDA in 2019, minus
the initial investment
Located in Amealco-Galindo km 5.5 near
San Juan and Río, Queretaro
A traditional Hacienda hotel
Convention, group and leisure travel
hotel
Pictures of the remodeled rooms in the Fiesta
Americana Hacienda Galindo Hotel
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Fiesta Americana Condesa Cancun
Finished the renovation of public areas in the Fiesta Americana Condesa Cancun hotel
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The development phase brought many benefits to
FibraHotel´s portfolio
Developed over 30 hotels since IPO
30 hotels with 4,062 rooms developed by FIHO to date
56 Acquired hotels with 8,493 rooms
Mexico City
Invested over Ps. $5.2bn in developments to date
Developed from the ground up. No major issues
Decision to create value (no development fees)
Reduced average life of the portfolio
Added 1,180 full service rooms
Added 1,321 rooms with international brands
Added 1,044 rooms in Mexico City
Added the best three hotels in Monterrey
Participated in irreplaceable mixed use projects
Sample of hotels developed by FibraHotel
Invested over Ps. $5.2bn in high quality assets
Rounded out portfolio with assets not otherwise available
As development phase is finished, FibraHotel´s risk profile has been reduced. Focus on stabilization
Highlights of developed portfolio
Source: Company filings
Lodging in Mexico Jose Carlos Azcarraga – CEO Grupo Posadas
Overview of operating and financial trends Simón Galante - CEO
Edouard Boudrant – CFO
Guillermo Bravo - CIO
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(20%)
(10%)
0%
10%
20%
30%
´08 ´09 ´10 ´11 ´12 ´13 ´14 ´15 ´16 ´17 ´18
Mexico Lodging Fundamentals
FIHO´s RevPAR growth
Organic growth from the
assets´ privileged locations,
quality, and professional asset
management
Five year RevPAR CAGR of
~6.5% (2013 to 9mo 2018)
Occupancy reached record
68.5% in 2017. At these levels
target is to optimize rates
Highly competitive market
Higher demand uncertainty
with limited additional supply
FIHO´s stabilized hotels’ RevPAR1
with growth above Mexico’s GDP
Source: Company filings, DataTur, Sectur, HVS, STR and l INEGI. 1 FIHO’s same-store-sales growth comparable vs GDP growth over that period time, not comparable for a longer period. Excludes
Fiesta Americana Condesa Cancun ; 2 Based on available data by STR for the entire market in Mexico (including both city and resort hotels, ~25% of rooms in market report). 2018 is ytd to September
Mexico Lodging Industry commentary
In 2017 Mexico had >36 million international visitors (6th worldwide), representing 8.5% of GDP and >US$21bn received
85% of travel is domestic (67% by air). In business, key drivers are GDP growth and FDI. Airport arrivals ~10% CAGR (2013/2018)
Hotel market has ~475k rooms and is comprised of: 2.8k business hotels with 334k rooms; 700 leisure hotels with 142k rooms
Currently ~60% of market is independent, but branded hotels are gaining market share and becoming more professionalized
A healthy market (above 60% occupancy). The market overall has been able to maintain or grow RevPAR in USD since 2011
According to STR, supply and demand have been growing between 1%-2.5% and 2%-3.5% per year since 2012 respectively. In
2018 we have seen weaker demand growth than in the past and supply has stayed in the same range.
Short/medium term supply is expected to slow given significant increase in per-room project costs with current pipeline of ~30k rooms
Stabilized
hotels
∆%
Anual
RevPAR
∆%
Anual
GDP
FIHO vs.
GDP
1Q16 54 12.7% 2.3% 5.5x
2Q16 55 12.8% 1.5% 8.4x
3Q16 56 13.7% 2.0% 6.8x
4Q16 56 10.0% 2.3% 4.3x
1Q17 64 12.8% 2.6% 5.0x
2Q17 64 11.1% 3.0% 3.7x
3Q17 64 5.7% 1.7% 3.3x
4Q17 64 4.4% 1.5% 2.9x
1Q18 74 9.2% 2.9% 3.1x
2Q18 74 5.5% 2.7% 2.0x
3Q18 74 4.1%
Mexico RevPAR change over time2
Mexico changes in supply and demand2
(20%)
(10%)
0%
10%
20%
30%
´08 ´09 ´10 ´11 ´12 ´13 ´14 ´15 ´16 ´17 ´18
RevPar (Ps) RevpPar (US)
(15%)
(10%)
(5%)
0%
5%
10%
15%
´08 ´09 ´10 ´11 ´12 ´13 ´14 ´15 ´16 ´17 ´18
Supply % Chg Demand % Chg
(15%)
(10%)
(5%)
0%
5%
10%
15%
´08 ´09 ´10 ´11 ´12 ´13 ´14 ´15 ´16 ´17 ´18
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41%
30%
29%
>1.10 <1 .0 1>1.10
FibraHotel has a leading RevPAR Index that has
improved y-o-y
RevPAR Index (Market Penetration)1
(70 hotels versus their competitive set)2
Source: Company information. Data based on 70 hotels that have comparable competitive sets 1 RevPar Index penetration measures a hotel's fair share of RevPAR relative to its competitors.
RevPAR penetration is calculated by dividing its RevPAR by the combined RevPAR of the competitive set. 2 Does not include Fiesta Americana Condesa Cancun
Over 70% of the hotels have a RevPAR Index above
100% and 40% have a RevPAR Index above 110%
50 hotels or 70% have positive RevPAR penetration
A leading market penetration proves the quality of the assets,
the branding, the location and the operating performance of the
hotels
From asset management perspective, RevPAR Index and
budget performance are the two most important metrics
RevPAR Index by segment 2018YTD vs 2017YTD
(70 hotels versus their competitive set)2 Penetration has improved y-o-y
Even in a more competitive market, the penetration for our
70 hotels has increased in 2018 YTD vs. last year
Best improvement in full-service hotels, as some hotels
continue their stabilization period
20 hotels
Below 100%
30 hotels
Over > 110%
20 hotels
Between 100% and 110%
96%
108%
93%
105%
111%
104%
Limited Service Select Service Full Service
2017 2018
900 bps
300 bps
1100 bps
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68, 114, 6
Cancun – Riviera Maya is a highly sophisticated and
competitive market with ~70,000 four and five star rooms,
70% of which are all-inclusive
Cancun airport arrivals were 20mm in 2018 ytd (~25mm
by year end1) – 7% y-o-y, 6% CAGR since 2007
7mm national (12%) – 8% CAGR since 2007
14mm international (4%) – 5% CAGR since 2007
During 1H´18 Cancun´s occupancy decreased 200bps to
82%, partly due to an increase in supply of ~400bps, and
an increase in total spending
Even though there is no updated data, 2H´18 has been
more challenging for the market overall
Pipeline is currently estimated between 3k and 5k rooms
Highlights of Cancun market
Cancun and FACC had a weak Q3 2018…
Headline news risk, mainly insecurity (especially from the
main feeder markets in the US)
Seaweed arrival was the largest in history
Shortened booking window
Strong increase in energetics costs
Additional competition from non-mexican Caribbean
Additional supply of new products coming in line
Factors that impacted Cancun in Q3 2018
Overview of FACC results2
Why FACC will perform better
Forward bookings look better in Q4 than Q3
Finished public area remodelings
Should benefit from a stronger USD
Entire market has to push for positive ADR growth with
wholesalers and groups
Strong airport arrivals and fundamentals from US leisure
traveler
In 9mo´18 FACC has generated Ps. $206mm in leases
Already above minimum rent of US$9.5mm
Even with the difficult 2H, the cap rate for the year will be
between 8.5% and 9.0%
Source: Company filings, HVS, STR, Asur passenger data. 1 2018 year end extrapolated from Asur´s first ten month Cancun arrivals; 2 According to Cancun´s Hotel Association “Barometro
Turistico”; 3 During Q1 2017 FACC was under a total repositioning including rooms out of inventory
Q1 Q2 Q3 9mo´18 Q1 Q2 Q3 9mo
Occupancy 88.0% 79.2% 72.2% 79.7% 2,319 bps -22 bps -525 bps 550 bps
Net Package ADR 5,010 4,525 4,342 4,684 (2.4%) 10.0% 10.9% 8.0%
Net Package RevPAR 4,408 3,581 3,135 3,734 32.5% 9.7% 3.4% 16.1%
Lease revenue (Ps. mm) 103.0 64.5 38.9 206.4
2018 y-o-y % change vs. 2017
33
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150, 168, 192
88, 106, 120
213, 220, 230
208, 204,185
255, 255, 255
0, 0, 0
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49, 27, 30
111, 70, 16
106, 178, 10
0, 63, 114
68, 114, 6
Growing trend of tourists traveling to Mexico is supported by the “value proposition” that our country
offers to international and domestic tourists
Source: Company filings, INEGI, WTTC and SECTUR
…but Solid Tourism Fundamentals will continue
Attractive
locations
Culture
offer
Return on
vacation
investment
Positive
demo-
graphic
tendencies
Continuous
sector
growth
Year round warm
weather Privileged location
that provides
access to the
largest feeder markets in US and
Canada
Large
supply of
culture and
history-
prehispanic,
colonial, etc.
#6 in cultural
heritages Great
gastronomic
offer – declared
heritage of humanity
by UNESCO
Baby boomers
travelling more
Growth in
discretional
income has
the potential to
increase local
tourism Broad range of
tourist
alternatives Competitive prices Wide range of touristic
experiences and services
Improved
infrastructure with more flights
Record levels of tourist
arrivals
Best-in-class
services
Tourism is an important driver for
Mexico’s GDP growth, and represents
8.5% of the country’s national GDP
Currently, Mexico is the #6 most
visited country in the world (vs.
#15 on 2013) with over 35 million
international tourists and has the
most developed hospitality
market in Latin America
Dollar revenues from tourism
were USD$21bn in 2017
An Open Skies Agreement between
Mexico and the U.S was signed in
August 2016, an agreement that has
the potential to substantially increase air
traffic between both countries
We believe that nowadays tourists are
in search for experiences rather
than material possessions
Key factors behind the positive trend of traveler growth in Mexico
34
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150, 168, 192
88, 106, 120
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208, 204,185
255, 255, 255
0, 0, 0
183, 192, 201
49, 27, 30
111, 70, 16
106, 178, 10
0, 63, 114
68, 114, 6
Occupancy
ADR
RevPAR
9mo 2017 9mo 2018
65.1% 65.7%
Ps. 1,099 Ps. 1,158
Ps. 716 Ps. 761
Total Revenues Ps. 2,500mm Ps. 3,032mm
NOI Ps. 777mm Ps. 1,036mm
EBITDA
Per room
Ps. 655m
Ps. 58,066
Ps. 876mm
Ps. 72,084
AFFO Ps. 435mm Ps. 643mm
Var.
+58bps
+5.4%
+6.3%
+21.3%
+33.5%
+26.4%
+24.1%
+47.8%
74 stabilized hotels
Total Portfolio
# of hotels
# of rooms
79
10,980
84
12,147 +6.3%
+10.6%
Overview of key financial indicators
AFFO per CBFI Ps. 0.77 Ps. 0.79 +3.6%
Source: Company filings
9mo 2017 9mo 2018 Var.
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88, 106, 120
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208, 204,185
255, 255, 255
0, 0, 0
183, 192, 201
49, 27, 30
111, 70, 16
106, 178, 10
0, 63, 114
68, 114, 6
Strong KPI performance over time
A larger and more
diversified portfolio
# of hotels
Strong occupancy
rates
ADR increases over
time. As occupancy
peaks, revenue
management
supports rate
increases, driving
RevPAR growth1
Source: Company filings. Note: Does not include Fiesta Americana Condesa Cancun ; 1 Information reported each quarter since 1Q 2013 for the full portfolio at end of period
Since 2013 occupancies have ranged between 60% to 70% (excluding Q1)
Overall it has increased over time with the highest numbers reached in 2017 and 2018
Q1
13
Q2
13
Q3
13
Q4
13
Q1
14
Q2
14
Q3
14
Q4
14
Q1
15
Q2
15
Q3
15
Q4
15
Q1
16
Q2
16
Q3
16
Q4
16
Q1
17
Q2
17
Q3
17
Q4
17
Q1
18
Q2
18
Q3
18
868 869 850 867 905 920
875 907
942 940 914
942 968 991 1,000
1,063
1,129 1,115 1,067
1,132 1,177 1,199
1,148
547 575 567 564 540
553 548 574 547 590 588 612
575 622 638
681 670 731 714
744 741 777
746
63%
66% 67%65%
60% 60%
63% 63%
58%
63%64% 65%
59%
63%64% 64%
59%
66%67%
66%
63%65% 65%
Q113
Q213
Q313
Q413
Q114
Q214
Q314
Q414
Q115
Q215
Q315
Q415
Q116
Q216
Q316
Q416
Q117
Q217
Q317
Q417
Q118
Q218
Q318
ADR RevPAR Occupancy
868 869 850 867 905 920 875 907 942 940 914 942 968 991 1,000 1,063
1,129 1,115 1,067
1,132 1,177 1,199 1,148
547 575 567 564 540 553 548 574 547 590 588 612 575 622 638 681 670
731 714 744 741 777 746
Q113
Q213
Q313
Q413
Q114
Q214
Q314
Q414
Q115
Q215
Q315
Q415
Q116
Q216
Q316
Q416
Q117
Q217
Q317
Q417
Q118
Q218
Q318
ADR RevPAR
37
5662
7581 83
2012 2013 2014 2015 2016 2017 2018 2019
1 1
63% 66% 67% 65% 60% 60% 63% 63%58%
63% 64% 65% 59% 63% 64% 64% 59% 66% 67% 66% 63% 65% 65%
0%
10%
20%
30%
40%
50%
60%
70%
-400
100
600
1100
1600
Q1 2013Q2 2013Q3 2013Q4 2013Q1 2014Q2 2014Q3 2014Q4 2014Q1 2015Q2 2015Q3 2015Q4 2015Q1 2016Q2 2016Q3 2016Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018
#REF! #REF! Occupancy
30
IPO
2012
1 1
36
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2nd map highlight 111/70/16
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150, 168, 192
88, 106, 120
213, 220, 230
208, 204,185
255, 255, 255
0, 0, 0
183, 192, 201
49, 27, 30
111, 70, 16
106, 178, 10
0, 63, 114
68, 114, 6
67%
23%
10%
Performance by regions and segments
Source: Company filings. Note: Does not include Fiesta Americana Condesa Cancun
19 hotels
Between
50%>65%
8 hotels
Below 50%
56 hotels
Over 65%
Notes
66% is a good number for a 74 stabilized hotel portfolio
Still see an opportunity to continue increasing ADR over time
Less opportunity to increase occupancies as ~66% of the portfolio has
low weekend occupancies
Mexico City, Guadalajara & Monterrey represent almost 33% of our
stabilized portfolio with 24 hotels
Select Service, which was coming from strong comparable numbers
posted a 2.2% RevPAR increase
South region impacted by lower demand in the oil region
14 hotels below 50% occupancy, mostly represent our ramp-up
portfolio plus hotels in cities with low demand such as Ciudad del
Carmen, Villahermosa and Coatzacoalcos
Strong KPI level over the Last Twelve Months
74 Stabilized Hotels
Occupancy rate above 66% even with a weak 3Q 2018
+7% RevPAR increase
Growth in RevPAR led by full-service hotels
Occupancy Breakdown of the Total Portfolio
(83 Hotels LTM)
Segment Occup. ADR RevPARVar vs
2017
Limited Service 64% 900 578 9.7%
Select Service 68% 1,101 752 2.2%
Full Service 63% 1,768 1,111 19.3%
Extended Stay 59% 1,015 599 (1.7)%
Region Occup. ADR RevPARVar vs
2017
Bajio 72% 1,203 862 8.2%
Northeast 69% 1,394 962 18.3%
Northwest 64% 1,050 670 8.3%
West 65% 1,130 731 4.1%
South 60% 961 581 (3.0)%
Mexico City 69% 1,172 808 0.9%
Total 66% 1,149 759 7.0%
2018 LTM (74 Stabilized Hotels)
37
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150, 168, 192
88, 106, 120
213, 220, 230
208, 204,185
255, 255, 255
0, 0, 0
183, 192, 201
49, 27, 30
111, 70, 16
106, 178, 10
0, 63, 114
68, 114, 6
177
250
295
310
309
380
396
447
449
501
504
553
534
635
696
770
757
866
878
935
1,0
09
1,0
42
981
1Q
´13
2Q
´13
3Q
´13
4Q
´13
1Q
´14
2Q
´14
3Q
´14
4Q
´14
1Q
´15
2Q
´15
3Q
´15
4Q
´15
1Q
´16
2Q
´16
3Q
´16
4Q
´16
1Q
´17
2Q
´17
3Q
´17
4Q
´17
1Q
´18
2Q
´18
3Q
´18
Rooms in operation – Inorganic growth
2.8x
28.9% CAGR
Quarterly Revenue (Ps. $mm)
3.9x
53.3% CAGR
Overview of revenue growth since IPO
Source: Company filings
Over 8,000 rooms added since the IPO
On average, added 350 rooms or 2.5 hotels per quarter
4,100 rooms at IPO (34%)
3,807 rooms developed from 2012 to 3Q 2018 (29%)
4,393 rooms acquired from 2012 to 3Q 2018 (37%)
Developed higher barrier to entry full service hotels with higher
number of rooms and higher revenue per room
Improved Segment Diversification
1,087 Select Service rooms developed & 2,231 acquired
1,020 Limited Service rooms developed & 644 acquired
1,016 Full Service rooms developed & 1,376 acquired
376 Extended Stay Rooms Developed (5 hotels)
Strong top line growth
Run rate quarterly revenue of Ps. $350 million in 2013 to Ps.
$1,000 million in 2018
On a revenue per room basis for managed hotels, from Ps.
$42k in 1Q ’13 to Ps. $82k in 3Q ’18, enhanced with steady
increase in RevPAR over the period and integration of higher
segment hotels to the portfolio
4,3
97
4,7
98
5,5
47
5,5
47
6,1
15
6,6
64
6,9
44
7,6
56
7,7
77
7,9
21
8,0
77
8,5
07
9,1
20
9,7
82
10,0
07
10,4
22
10,8
12
10,9
80
10,9
80
11,2
73
11,9
26
11,9
24
12,1
47
1Q
´13
2Q
´13
3Q
´13
4Q
´13
1Q
´14
2Q
´14
3Q
´14
4Q
´14
1Q
´15
2Q
´15
3Q
´15
4Q
´15
1Q
´16
2Q
´16
3Q
´16
4Q
´16
1Q
´17
2Q
´17
3Q
´17
4Q
´17
1Q
´18
2Q
´18
3Q
´18
38
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2nd map highlight 111/70/16
251/183/60
150, 168, 192
88, 106, 120
213, 220, 230
208, 204,185
255, 255, 255
0, 0, 0
183, 192, 201
49, 27, 30
111, 70, 16
106, 178, 10
0, 63, 114
68, 114, 6 F&B profit per diner1 (Ps.$)
Non-room Revenue breakdown (Ps. $mm)
Overview of Food and Beverage revenue growth
Source: Company filings. 1 Profit per diner based on F&B department profit before indirect expenses
F&B is an important component in revenue
Food & Beverage has represented ~20% of lodging
revenues since IPO and has grown in line with room
revenues
Group business and conference events are an important
drivers as the packages include F&B with good margins
Strategies in place to increase average check such as local
menus, and to implement new offerings such as Starbucks
coffee, and juice bar offerings
Fiesta Americana Condesa Cancun, as an all-inclusive
property has an important F&B and up-sell component
(although it is represented as part of the lease revenue)
Full Service Hotels improving F&B profit
Almost 30% profit per diner increase between 2014 and
3Q 2018. CAGR above 7%
Profit per diner has increased in the past few years driven
by new and better offerings as well as the addition of full-
service hotels with more consumption areas
Recent hotels with larger event space such as the Live
Aqua San Miguel, Fiesta Americana Hacienda Galindo and
Fiesta Americana Satelite have an important F&B
component
$ 368 $ 468 $ 621 $ 676
$ 35 $ 49
$ 55 $ 62
2015 2016 2017 2018 LTM
2.8x
35.6% CAGR
$ 57 $ 60
$ 68
$ 74
2015 2016 2017 2018 LTM
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251/183/60
150, 168, 192
88, 106, 120
213, 220, 230
208, 204,185
255, 255, 255
0, 0, 0
183, 192, 201
49, 27, 30
111, 70, 16
106, 178, 10
0, 63, 114
68, 114, 6
LTM Adjusted EBITDA (Ps. $mm)
Source: Company filings. 1 Adjusted for non-recurring items
Overview EBITDA per room and margin improvement
1.9x
16.8% CAGR
Constant EBITDA Growth
Adjusted EBITDA1 increases due to cost
control and positive impact from the trends
in the ramp-up portfolio
2018 margin positively impacted by the
acquisition of Fiesta Americana Condesa
Cancun as a lease
Efficient corporate structure with G&A
overhead in place for additional growth
EBITDA per room continues to grow
Adjusted EBITDA per Room has increased
steadily since mid 2016 thanks to:
Recently opened full-service hotels
Successful stabilization of ramp-up hotels
The acquisition of Fiesta Americana Condesa
Cancun in 2018 increased EBITDA per Room
more than 15% between 2017 and 2018
$ 5
1
$ 5
0
$ 5
1
$ 5
4
$ 5
7
$ 5
8
$ 6
0
$ 6
2
$ 6
1
$ 6
1
$ 6
3
$ 6
6
$ 7
0
$ 7
8
$ 8
0
$ 8
2
$ 9
1
$ 9
4
$ 9
5
1Q14
2Q14
3Q14
FY14
1Q15
2Q15
3Q15
FY15
1Q16
2Q16
3Q16
FY16
1Q17
2Q17
3Q17
FY17
1Q18
2Q18
3Q18
$ 2
77
$ 3
01
$ 3
27
$ 3
71
$ 4
12
$ 4
39
$ 4
68
$ 4
98
$ 5
10
$ 5
44
$ 5
91
$ 6
56
$ 7
24
$ 8
21
$ 8
65
$ 9
02
$ 1
,029
$ 1
,089
$ 1
,123
24%23%
23%24%
25%24%
25% 25%24% 24% 24%
25%25%
27% 26%26%
28%28%
28%
1Q14
2Q14
3Q14
FY14
1Q15
2Q15
3Q15
FY15
1Q16
2Q16
3Q16
FY16
1Q17
2Q17
3Q17
FY17
1Q18
2Q18
3Q18
LTM EBITDA LTM EBITDA Margin
LTM Adjusted EBITDA / Room (Ps. $000´s)
40
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2nd map highlight 111/70/16
251/183/60
150, 168, 192
88, 106, 120
213, 220, 230
208, 204,185
255, 255, 255
0, 0, 0
183, 192, 201
49, 27, 30
111, 70, 16
106, 178, 10
0, 63, 114
68, 114, 6
$1.6
$1.4 $1.3
$1.5
$1.6
$1.8
$1.9
$2.1
$2.4
$2.7
Dec17
Jan18
Feb18
Mar18
Apr18
May18
Jun18
Jul18
Aug18
Sep18
4.5%
5.0%
5.5%
6.0%
6.5%
7.0%
7.5%
8.0%
1Q
-14
2Q
-14
3Q
-14
4Q
-14
1Q
-15
2Q
-15
3Q
-15
4Q
-15
1Q
-16
2Q
-16
3Q
-16
4Q
-16
1Q
-17
2Q
-17
3Q
-17
4Q
-17
1Q
-18
2Q
-18
3Q
-18
Energetics as % of total revenues
+107%
Strong Increases in Energetics prices have
pressured margins…
Source: Company filings, Acclaim Energy. 1 Medium Tension rate. Even though each geographic region and municipality has a different regulated rate, Northeast is presented as an example of the
overall situation in Mexico; 2 cre.gob.mx
Strong increases mostly in electricity…
107% increase in electricity cost per kw from
January 2018 to September 20181
The energy reform changed electricity prices, from a
mostly constant base set by CFE with inflation based
increases, to a price set by a formula with several
factors including oil price and exchange rate
According to CRE (Energy Regulatory Commission)
market electricity rates have increased 50% just in the
past few months2
FibraHotel’s Energetics % vs Lodging Revenues
… now represent a bigger portion of revenues
FIHO’s energetic costs had historically represented
~6% of total revenue
In 3Q 2018 FIHO’s energetic costs represented almost
8%, representing a ~200pbs impact on margins
48.9% increase in energetics cost POR from 3Q’14
to 3Q’18
CFE’s Electricity Cost Per kw - Northeast1
41
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2nd map highlight 111/70/16
251/183/60
150, 168, 192
88, 106, 120
213, 220, 230
208, 204,185
255, 255, 255
0, 0, 0
183, 192, 201
49, 27, 30
111, 70, 16
106, 178, 10
0, 63, 114
68, 114, 6
… and we are working on efficiency programs to
reduce energetic use and average cost
As market has recently opened up to market prices an expert will provide best solution
Hired Acclaim Energy to review FibraHotel´s current situation and the different
electricity alternatives for the portfolio, as well as competitive bid pricing
Different items have to be taken into account in the analysis including risks (FX, Oil
price, supplier credit), ideal structure (tenor, energy type, delivery for full portfolio,
flexibility in case of better alternatives, set vs. market price, etc.)
Migrate to Natural Gas
Invest for properties that have the infrastructure nearby to access Natural Gas which
is cleaner and cheaper
In an initial stage FibraHotel expects 50% of its portfolio to have access
Achieve 100% LED lighting across all properties
Up-front investment in the equipment with relevant energetics savings
Where natural gas is not available, FibraHotel is in process of investing in solar
panels that can support water heating
Energy Advisor
100% LED Lightning
Increase solar energy
6 months for the
initial study
+6-12 months to
implement strategy
In process –
2-6 Months
In process –
2 Months
In process –
12 Months
Plan and expected benefits Implementation Projects in process
Hired an advisor to look at the overall portfolio situation and analyze alternative energetics providers
Reduce consumption POR based on special efficiency programs, additional controls and education
Portfolio approach, taking into account the different geographic opportunities and challenges
Changes in equipment that can achieve better energy efficiency such as heat and
steam recovery, no water urinals, water efficiency valves, presence sensors and
automation, HVAC reviews, maintenance training, among others Others
In process –
Times vary
Source: Company filings, Acclaim Energy
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Evolution of lease revenue over time (Ps. $mm)
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
-
200
400
600
800
1,000
1,200
Total revenues Leases Leases in % of Total Revenues
FA Condesa Cancun Seasonality in 2018
2018: Strong Increase in Lease Revenues from the
Fiesta Americana Condesa Cancun Acquisition
Strong performance More competitive market
FACC impact
Source: Company filings and estimates
Before 2018 leases had decreased as new hotels
under management agreements were added
FibraHotel prefers hotels under traditional operating
management agreements
Leasing revenues went from 5.8% in 1Q’14 to 2.5% in
4Q’17
Acquisition of FACC added to lease revenue
Acquired under a sale and leaseback transaction in Q1’18:
Minimum fixed rent of USD $9.5 million per year
Variable rent depending on occupancy rate
Maturity: December 31, 2032 (15-year agreement)
Solution to an “all-inclusive” hotel operation
2018 - Strong Increase in Lease Revenues
2017 lease revenues: Ps. $93 million
Q3 2018 LTM: leasing revenues: Ps. $303 million (+226%)
FACC represents 68.1% of lease revenue in 9mo 2018
In 9mo 2018 leases represented 9.2% of total revenues
40%
25%
15%
Q1 Q2 Q3 Q4
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FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 3Q 2018 LTM CAGR
Total Revenues 1,032,473 1,530,826 2,007,939 2,635,004 3,435,995 3,967,388 26%
Total Lodging Contribution 377,470 524,774 670,174 843,433 1,105,879 1,378,353 25%
Margin 36.6% 34.3% 33.4% 32.0% 32.2% 34.7%
Lodging Contribution - Managed Hotels 281,495 449,063 589,016 763,899 1,012,640 1,074,899 26%
Margin 30.1% 30.9% 30.6% 29.9% 30.3% 29.3%
Net Operating Income 360,752 503,147 641,184 809,523 1,062,569 1,322,662 25%
Margin 34.9% 32.9% 31.9% 30.7% 30.9% 33.3%
Adjusted EBITDA 259,811 371,235 498,445 656,320 901,696 1,122,720 29%
Margin 25.2% 24.3% 24.8% 24.9% 26.2% 28.3%
Adjusted Funds From Operations 337,065 423,768 428,974 493,614 668,579 876,594 18%
AFFO / CBFI with Economic Rights $0.76 $0.86 $0.87 $1.00 $1.05 $1.08 6%
AFFO (% of total revenues) 32.6% 27.7% 21.4% 18.7% 19.5% 22.1%
Even after a challenging Q3 2018, FIHO has proven a
history of solid financial and operating performance
From 2013 – 2017:
Strong increase in revenues
Lodging Contribution margin has been
impacted by the development cycle,
with strong stabilization in 2018
AFFO almost doubled and a 38%
increase for AFFO per CBFI
3Q 2018 LTM impacted by generally weaker demand:
Revenues have been lower than anticipated since May 2018 driving a lower
contribution margin at hotel level due to:
As costs are already controlled, lower revenues make additional reductions
difficult, leading to margin pressure
Strong increase in energetic costs
NOI and EBITDA margin improvement in 2018 thanks to FACC lease
Strong increase in AFFO from 2017 to 2018 from hotel openings and the FACC acquisition
Revenue and EBITDA growth partly offset by additional financial expenses and CAPEX
AFFO per share only increased 3% given the September 2017 capital raising
Source: Company filings
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106, 178, 10
0, 63, 114
68, 114, 6
Even though uncertain market conditions remain, partial recovery is expected in Q4
In Business Hotels:
October and November are strong months for business travel, as well as the strongest months for conferences
Actions have been taken by operators to increase business volume, including an additional marketing push
Fiesta Americana Condesa Cancun has a better reservation pace for November and December
Opening of Live Aqua San Miguel de Allende and Fiesta Americana Satelite
FY 2019: Uncertainty remains for demand. Focus on rate and cost optimization
Headwinds to remain during governmental transition period
Business Hotels: target increase in RevPAR above inflation through ADR optimization
Take advantage of strong markets and maintain RevPAR penetration in more competitive markets
Continue to maintain rates in USD where possible
Fiesta Americana Condesa Cancun is expected to have a stronger activity as all public areas have been remodeled
and certain negative shocks are expected to dissipate. Key variable will continue to be ability for market to push ADR
growth and regain demand growth from quality international travelers
Focused on Asset Management, cost efficiencies and reducing energetic costs
Recently opened hotels to continue their ramp-up process. Fiesta Americana Viaducto expected to open Q4’19
Headwinds at the AFFO level from additional interest expense. Indebtedness linked to Fiesta Americana Satellite and
Live Aqua San Miguel de Allende will not be capitalized in 2019
1
2
Key themes to expect from an operating perspective
Source: Company filings
Overview of Balance Sheet and Financing Edouard Boudrant - CFO
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Debt composition (%) Amortization Schedule (Ps. $mm)
47 204 244 357
538 446 493
307 359
98
100 37
20
187
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
A Fortress Balance Sheet
Source: Company filings. 1 Loan To Value based on depreciated assets at historical cost; 2All the medium / long term indebtedness is covered with different derivative instruments (only the Ps.
100mm revolving facility is currently not covered); 3 USD amortization converted to Pesos at current exchange rate for illustrative purposes
29.4% maturing over the
next 3 years (Including
4Q 2018)
Option to add USD financing
By the end of September 2018, FibraHotel disbursed its first
USD denominated debt
USD $13.0 million – Equivalent to Ps. $243 million
7.1% of the total debt is now USD denominated
Backed by USD denominated revenues
Interest rate of LIBOR 91d + 180 bps
FibraHotel has signed an option with a bank until June 2019 to
switch Ps. $1,000 million of existing debt from MXN to USD
(TIIE 91d + 200bps) to USD (LIBOR 91d + 180bps)
Very Comfortable Debt Situation
As of September 30th, 2018:
Net Debt / LTM 3Q 2018 EBITDA of 2.3x
Loan to Value1: 20.1%
Total debt of Ps. $3.4bn / Assets of Ps. $17.1bn
Total debt cost of 8.13%
Compared to a 8.12% TIIE
97%
3%
Secured Unsecured
93%
7%
MXN USD
MXN denominated
USD denominated3
Revolving credit
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106, 178, 10
0, 63, 114
68, 114, 6
FIHO has an attractive cost of debt vs. current
market conditions
Attractive cost of debt compared with current market conditions
Average cost of debt is 8.13% as of September 30th, 2018, compared with a 8.12% TIIE
Spread to TIIE has narrowed over the past few years thanks to our hedging policy
100% of our Long Term debt is covered until October 2021
Source: Company filings
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
9.00%
$(50)
$ 0
$ 50
$ 100
$ 150
$ 200
$ 250
$ 300
$ 350
$ 400
4Q 15 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18 3Q 18
EBITDA Net Interest FIHO´s All In Cost TIIE 28d
175 bps
125 bps
43 bps
Ps. $
mm
% In
tere
st R
ate
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In accordance with the IFRS, financing costs related to development projects are capitalized as part of the investment in each project
As we were in a development cycle, capitalized interests over time were:
2016: 63% of total interest paid
2017: 34% of total interest paid
2018: 39% of total interest paid
Development cycle will end in 2019, with only one hotel under development, reducing the amount of capitalized interests vs. years past
The opening of Fiesta Americana Satelite and Live Aqua San Miguel de Allende represent around Ps. $51 million in capitalized
interests in 2018 LTM
4
14
20
29
45 50
57
67 64 63 64
68
4
11 16 17
24
18 18 23
20 19
25
32
Q42015
Q12016
Q22016
Q32016
Q42016
Q12017
Q22017
Q32017
Q42017
Q12018
Q22018
Q32018
Net Interests Capitalized Interests
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Q22016
Q32016
Q42016
Q12017
Q22017
Q32017
Q42017
Q12018
Q22018
Q32018
Development % of debt Interests capitalized
Evolution capitalized interest expense (% of total) Quarterly Interest expense breakdown (Ps. $mm)
Source: Company filings
Evolution of capitalized interests for development
projects
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Summary of the CBFI Repurchase Program in 2018 YTD
Source: Company filings. 1 2018 Volume Weighted Average Price as of November 7th, 2018
Quarterly Repurchase Program Q1 2018 Q2 2018 Q3 2018 Q4 2018
# Acquired CBFI (mm.) 11.3 6.1 3.3 3.0
Average Acquisition Price MXN 11.18 11.56 12.00 10.39
VWAP FIHO MXN 11.03 11.57 12.12 11.05
2018 YTD
On November 14th, 2017, FibraHotel`s CBFI holders approved a CBFIs repurchase program of up to 5% of the outstanding
capital in 2017 and in 2018
On December 29th, 2017 FibraHotel started to repurchase CBFIs in the open market
As of November 7th, 2018, FibraHotel has repurchased 23,853,770 CBFIs as follows:
The CBFIs represent 2.9% of outstanding CBFIs
The CBFIs represent 57.7% of the 5% repurchase program authorized for 2018
Average acquisition price of Ps. $11.29 per CBFI vs. Ps. $11.52 average trading price over the 2018 year1
Total capital returned to shareholders though the repurchase program in 2018 of Ps. $269 million
CBFIs that have been repurchased do not have economic or corporate rights
In 2018ytd, the impact of the repurchase program has added +0.62% to the dividend distributed
As we are constantly active based on available volume, the repurchases have been done around the CBFI VWAP of each period
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106, 178, 10
0, 63, 114
68, 114, 6
2019 CBFI Repurchase Program
FibraHotel is currently in process of canceling the CBFIs repurchased until Q3 2018
FibraHotel plans to call a CBFI holders meeting in December of 2018 in order to establish a new 5% repurchase fund for 2019
Given the current CBFI price and debt position, we have ample room to fund the entire program while still maintaining a solid
balance sheet
The program will have similar rules to the current program including
Buy back impact to be accretive on distribution
Limit trading based on daily volume, excluding available block trades
Black out periods:
10 days before quarterly results publication
3 days after quarterly results publication
3 days before and after material event known by the company
Formal CBFI Holders assembly to authorize 2019 plan to be called for early December
Please participate
Source: Company filings
Closing statements Simon Galante – CEO FibraHotel
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Closing statements
FibraHotel has the best real estate assets with 86 hotels and >12,000 rooms in Mexico
Confident on the quality of our portfolio which will create value across cycles
Diversified assets across geographies, sectors, segments and demand drivers
Best management team and sponsor
Experienced management team
Strong balance sheet
20% LTV and 2.3x net debt to LTM EBITDA
No amortization wall. Current debt is hedged for interest rate increases
1
3
2
We are confident on our business model and the quality of the portfolio
We are currently living in uncertain times. Management has been here before. Many times
The CBFI is at a very attractive valuation. Our best investment is to repurchase CBFIs
Focus is 100% on operating results
Risk profile has changed. A large component of our assets will be stabilized by 2019
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FibraHotel´s Investment Thesis Remains Intact
Open Architecture with Leading Brands and Operators
The Best Hotel Portfolio in Mexico. Unique and Well Diversified
Hotels with Growth Potential
Attractive Valuation with Proven Business Plan Execution
Lower Risk Profile as Most Hotels will be Stabilized by 2019.
Finished Development Cycle that Rounded Out the Portfolio
Fortress Balance Sheet with a Prudent Leverage Policy
Experienced Management Team plus Best in Class Sponsor with
Strong Long-Term Alignment of Interests 6
5
4
3
2
1