Get Adobe Flash player 1Corporate Presentation STRATEGIC VISION AND OUTLOOK Cash Flow from operations Net Cash proceeds from Asset Management Return to shareholders Cash utilization in line with investment grade status Asset light acquisitions

Asset light acquisitions with ROCE >12%

5. Achieving operational excellence to improve competitiveness

Operational excellence is one of Accor’s major competitive advantages, particularly in the franchising business. As a hotel operator, we have developed a range of highly effective, endto-end support services and systems, aligned with hotelier challenges and delivered to our managed and franchised partners.

Designed to improve performance in every aspect of our business, operational excellence is demonstrated in three areas:

a growing the revenue base, with average RevPAR outperforming the competition;

a efficiently refurbishing hotels, which helps to maintain a

quality network while limiting renovation expenditure to 5%

of total revenue;

A value-creating financial strategy

Accor’s transformation is designed to optimize its business model through three key performance indicators: i)the structural improvement in cash flow; ii)the improvement in operating margins; and iii)the improvement in return on capital employed.

In line with the commitment to maintaining the investment grade status, cash allocation policies are structured to meet two main objectives:

a improving margins, in particular through the use of efficient cost optimization software.

Concerning this final point, in response to the structural increase in operational costs in Europe, a more competitive market environment (evolution of online distribution) and the sustained deterioration in market conditions in Southern Europe, Accor has launched a €100-million cost savings plan for the 2013-2014 period. In particular, the plan will involve a strategic review and prioritization of projects, as well as a reduction in operating costs for the Group and its subsidiaries in Europe.

This will come as part of the o perational e xcellence program already underway, which notably implies disciplined cost management. The objective is to systematically strengthen and optimize the strategic transformations launched by the Group.

a asset-light acquisitions offering a more than 12% targeted ROCE, to strengthen our leadership positions in emerging markets;

a return profit to shareholders by paying out 50% of operating profit before non-recurring items, net of tax in ordinary dividends and, if possible while complying with covenants governing investment grade ratings, by paying special cash dividends or by buying back shares.