Accor spin-off sets out its growth plan

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Accor Services, the voucher business being spun off by Accor Hotels, aims to maintain growth through expansion in new markets, acquisitions and new products, but says organic growth will remain a priority.

Speaking to investors on the day of the publication of its prospectus, Jacques Stern, Accor finance director, who is to head the new services group, said the separation from Accor Hotels would pay off from next year.

He said, “Our business project will bear fruit during 2011,” adding that the priority would be to accelerate growth after a “year of transition” in 2010.

The services business aims to increase the face value of the vouchers it issues by 6 to 14 per cent annually. In 2003-09, this grew by an annual average of 10.5 per cent.

Accor is due to spin off its services unit in Paris on July 2, assuming shareholders approve the one-for-one share split at a meeting on June 29, at which the name of the new company will be announced.

The services business issues vouchers, such as lunch or childcare tickets, to corporate clients that benefit from government tax breaks when they give them as perks to employees.

These employee and public benefits account for 80 per cent of issue volume – the face value of the vouchers – but new products would reduce this contribution to less than 50 per cent within 10-15 years, according to the prospectus.

The new products include non-food vouchers to pay for household services and cards to allow employees to pay for fuel and road tolls.

The company aims to expand in up to eight new countries by 2016, in addition to the 40 in which it already operates. Another 10-15 countries would be added in the “longer term”.

The aim is to reduce the new company’s dependence on three countries – France, Italy and Brazil – for the bulk of its operating profit. Each of these countries contributed more than €40m ($49m) to operating profit but by 2016, five countries are to contribute this amount and eight in the longer term.

The services business made a net loss of €50m in 2009, pro forma, compared with a net profit of €177m the previous year, Accor said.

Revenues fell by 5 per cent to €902m in 2009. Pro forma operating profit was €327m in 2009.

The new company is to raise €1.5bn in bank and other borrowings but Mr Stern ruled out a rights issue, saying capital would be raised only for acquisitions.

The shares closed up 2 per cent to €41.05.

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