Accor's Financial Analysis

Résumé du document

Accor is the leader in the European hospitality industry. The main activities of Accor revolve around the hospitality business and services to corporations. The hospitality industry is divided into three categories namely Middle and high end hotels (Sofitel, Mercure, Novotel), Middle and low end hotels (Ibis, Etap hotel), low cost hotels (Formule 1, Motel 6). The Accor group was created by Paul Dubrule and Gérard Pélisson in 1967. At the time, the group had only one hotel chain, Novotel. Pursuing with the success of this chain, Paul Dubrule and Gérard Pélisson continued to develop their business. Between 1967 and 1982, Accor witnessed a strong development to emerge as the leader on the French market. The company has launched other hotel chains such as Ibis and acquired some other brands such as Courtepaille, Sofitel. To diversify its activities, the group also acquired the producer of "ticket restaurants". In 1982, the group Accor finally emerged. Since 1983, Accor continues its development in France with the creation of low cost hotels. Today, Accor is well established in France. It owns the majority of the Middle-high end, middle-low end and low cost hotels in France.

Extraits

[...] Then plot the returns in a simple line graph. Report your own capm beta. Comment on the difference (if any) with the beta found on the Internet. Give a value judgement in which you argue whether you believe this beta is high or low. In order to give your argument more body, look up the annual report of Accor, and report items as leverage ratio, ratio of variable costs and fixed costs, etc The CAPM beta The capital Asset Pricing Model a measure of a stock's volatility in relation to the market.5” Thanks to this beta, it is possible to evaluate the level of a stock risks. [...]

[...] Look up the „Sensitivity Analysis (p.63). Describe how sensitive Accor's profits are to changes in the dollar-to-euro exchange rate, interest rates, and revenue per available room (RevPAR) Accor' overview Accor is today the European leader in the hospitality industry. The main activities are the hospitality business and services to corporations. The hospitality industry is divided into three categories: Middle high end hotels: Sofitel, Mercure, Novotel Middle low end hotels: Ibis, Etap hotel Low cost hotels: Formule Motel 6 The Accor group was created by Paul Dubrule and Gérard Pélisson in 1967. [...]

[...] Question Take the wacc from the Financial Statements of the year 2006 (see p.11) as your point of departure. If a company as Accor would be working with one wacc for all its projects, and if you then look up the return on capital employed (roce) per business segment on p.13, then comment on the profitability of the various business segments. In this strategic finance question, I want you to take up the position of a chief financial officer (cfo). [...]

[...] Accor's consolidated sales for Moreover, it would be dangerous for Accor just to focus on only one activity. The diversification of its activities permits Accor to have a second source of revenue in case of crisis on one market. So even if the sale of all the hospitality's assets would generate a huge amount of equities to be reinvested in the society, Accor should not get rid of the hostel business. I think that Accor should continue its development by keeping its two main activities that is to say the hospitality industry and the corporate services http://www.accor.com/gb/groupe/activites/chiffres/chiffres_accor.asp 12 In the future, Accor has a lot of interest to get from its corporate services. [...]

[...] That explain why this sector has known a high growth. Moreover, the investments for economics hotels are much lower than upscale and midscale ones. So if the RevPar of the upscale and midscale hotels is not high, the ROCE will decrease. If the upscale and midscale profitability is not good, the company would not have any interest to keep this range of hotel. However, it could be good for the company's brand image to have uspscale hotels as long they are profitable. [...]