Earnings Call: H1 2026

Jul 30, 2026

Summary

H1 2026 saw resilient results despite Middle East headwinds, with strong pipeline growth, robust performance in Europe and the Americas, and effective cost controls. Strategic partnerships and loyalty initiatives are fueling future growth, while guidance anticipates steady RevPAR and EBITDA gains.

Welcome to the Accor Half-Year 2026 Results Presentation. Today's conference will be hosted by Mr. Bazin and Martine Gerow, Group CFO. For the first part of the conference, the participants will be on listen-only mode. During the questions and answers session, participants are able to ask questions by dialing #5 on their telephone keypad. Now I will hand the conference over to Mr. Bazin. Please go ahead. Well, good morning, everyone. Very happy to have you all for the first semester results. I will do the conclusion. At the end, I am going to let the floor, to the best of us, to Martine as Chief Financial Officer. She is going to guide you through the results and comments, and then we will go straight conclusion and Q&A. At least thank you so much, each of you, to actually being on the phone with us. Martine. Thank you, Sébastien. Good morning, ladies and gentlemen, and again thank you for attending our earnings call for the first half. I will kick off on the financial highlights on page 4. Following a very strong start of the year, the situation in the Middle East has impacted our trading in the second quarter. To note that the performance in other regions remained very solid. We activated in March a profit protection plan, which has enabled us to largely offset the impact of the conflict and deliver a very steady set of results for the first half of 2026. The operating performance is contrasted across regions, but did improve throughout the quarter, adjusting for the hash calendar. Q2 RevPAR came in at -0.2%. That is a headline that matches two very different situations outside the Middle East. Q2 RevPAR was up 3.3%, driven by both pricing and occupancy, which demonstrates the continued strength of demand and the attractiveness of our brands. In the Middle East, RevPAR was down 29%, driven by the UAE, which was down 67% in the quarter, as other countries, which is Egypt and Saudi Arabia namely, posted positive RevPAR growth in the mid-single digit. We exited the quarter with a marked improvement in the UAE, and an acceleration in other regions, notably in Europe. This drove our H1 2026 RevPAR growth to 2.2% and 4.6%, excluding the Middle East. Room revenue growth was driven by both business and leisure, with individual leisure travelers and business groups growing in the mid-single digit. Net unit growth was 3.2% on a last 12-month basis, with limited openings in H1 and some churn in our Germany Revo portfolio, as well as in China. Pipeline growth remained very healthy at 11.4% growth over the last 12 months, supporting an acceleration of NUG going forward. Signings also grew at a strong pace. Moving to financials, we adapted very quickly to the geopolitical events, producing a solid set of results. M&F revenue was up 4.8% at constant currency, reaching EUR 685 million. That is a solid performance. M&F EBITDA was up by 9.1% at constant currency, which is a 280 basis points margin improvement. Total revenue was up 3% at constant currency and 4.8% on a like-for-like basis when we adjust for some disposals in Paris Society. Total EBITDA was up by 6.5% at constant currency and 7.4% on a like-for-like basis, adjusting for scope. FX had a negative 2 points impact on group revenue and 4 points on EBITDA and was concentrated in the first quarter. Based on current rate, we expect EBITDA to turn positive in the second half. Scope impacted revenue by 2 points in the first half and EBITDA by 1 point. Recurring free cash flow reached EUR 194 million. That is up 42% versus prior year. We delivered strong shareholder return year to date at EUR 541 million, which equates to a 4.8% return, bringing total return for shareholders over the last three and a half years to EUR 2.6 billion. Actually, by the end of 2026, when we factor in our second tranche of share buyback, we will have returned EUR 2.8 billion to shareholders, with dividends and share buyback in the first four years, which puts us in line of sight of the EUR 3 billion return, which had earmarked in our capital market base almost a year ahead of schedule. Let us now move on to the second quarter RevPAR for each division on slide 5. PM&E posted a flattish RevPAR growth of 0.1%, driven by pricing. In the quarter, average rate was up 1%, and occupancy rate was down 1 point at 68, driven by the Middle East. Excluding the Middle East, RevPAR was actually up 1.1%. In North America, RevPAR was also flattish at 0.2%, driven by pricing, stable occupancy year over year. Our three largest countries report actually very different trends. France and the U.K. posted low single-digit RevPAR growth while Germany was negative. We did note that trading improved in June in all three markets with RevPAR in the low single digit to mid-single digit. In France in the second quarter, RevPAR was in line with the first quarter, although more driven by the Provence with strong and steady leisure demand. In the U.K., demand was also sustained, notably in London, confirming a solid low single-digit RevPAR growth. In Germany, demand softened in April and May but improved in June with a positive RevPAR in June, driven by a more supportive event calendar. In MEAPAC, Q2 RevPAR was down 1.1%, impacted by the conflict, with significant decline in occupancy and rates in the UAE. Excluding Middle East, RevPAR would be up 1.9%, driven by UAE, as Egypt and Saudi Arabia were up in the mid-single digit. Southeast Asia remains a growth engine for the region, with RevPAR in the mid-single digit territory, with notably good performance in Japan, in Vietnam, and in Indonesia. Pacific slowed down somewhat versus the fourth quarter, reporting a flattish RevPAR growth due to lower international traffic and lower consumer and business confidence. In Mayotte, obviously, impact of the conflict. Mayotte was down in the low teens in the quarter. The negative performance, again, attributable to the UAE. The UAE RevPAR decreased in April in the mid-80s, but improved since the decline in June in the UAE was only in the 40s. Saudi, Egypt, and Turkey continued to perform well. China stayed in low single digit negative territory. Supply growth is leveling off, so the industry should be at or near the bottom of the cycle. RevPAR recovery is actually highly uneven, and there is clear underperformance of the mid and eco segment, which is where most of our portfolio sits in China. To note that recovery is already well in place in luxury since the fourth quarter, and continuing through the second quarter with positive RevPAR growth. Americas posted mid-single digit growth with Q2 RevPAR up 4.8%, region remains driven by Brazil. Turning to luxury and lifestyle, Q2 RevPAR decreased by 1.4%, led by occupancy and Rev decline in the Middle East. Excluding the Middle East, luxury and lifestyle RevPAR would actually be up by 9.4%, which is in line with the first quarter, and confirms the healthy demand for this segment bar the conflict. Luxury reported positive RevPAR growth of 2.5%. Excluding Middle East, it would be up 9.1%. All brand, all regions, again, reporting growing RevPAR outside of the Middle East. Europe and NORAM demand were particularly robust, with excellent performance in NORAM, in Fairmont and Raffles. Lifestyle is a segment which is the most impacted given its larger exposure to the UAE, which weighed down on RevPAR, which is down 11.3% in the quarter. Excluding Middle East, RevPAR would be up 10.3% for lifestyle. And within lifestyle, resorts were the most effective. Lifestyle collecting was actually only slightly down due to its larger presence in the Europe and U.S. Let's now turn to slide six, which breaks down our portfolio and pipeline by division. PME grew its network by 2.6%. The pace of openings remains steady, and pipeline grew a stellar 12.7%, reaching 28% of the PME network, which is up three points from prior and confirming again the attractiveness of our brands. PME signings grew by 10%. The sequential slowdown of the NUG results from, as I mentioned in my introduction, some churn in the Revo portfolio in Germany, as well as the eco segment in China, where we see some hotels actually closing down due to the lower activity level, particularly in the second and third tier cities. On the right, luxury and lifestyle portfolio grew by 6.8%. That's driven by Ennismore pipeline growth picking up from the first quarter at 7.4%. Now, we did transfer the JO&JOE portfolio in H1, which impacted the NUG of luxury and lifestyle by about one point. So if you look at the underlying luxury and lifestyle growth, it's closer to 8% on an LTM basis when we adjust for that transfer. It was marginal, obviously, on PME, which is a larger network. There were fewer openings in the first quarter, sorry, in the first half. They were more concentrated in the second half. Some openings in the Middle East were actually pushed to the second half. As we expected, churn was lower compared to prior. Some notable openings of the second quarter includes Raffles Jeddah and Orient Express in Venice. Pipelines, still very healthy, stands at 46% of the network. That is also up 1 point from prior year, and signings were by 39% in volume. At group level, net unit growth reached 3.2% over the year with an accretive mix. Newly opened hotels will generate fee per room, which is approximately twice as high, so 2X, as fees generated by churn hotels over the last 12 months, as you can see on the box at the bottom of the slide. Versus last year, pipeline is up 11.4% at group level in volume, and group signings in volume are up 13%. Conversions still represent more than 55% of our openings. That is quite in line with last year. Now, let's turn to slide 7 with revenue by segment. The revenue by segment and by division is actually provided, as we always do, in the appendix and in the press release. The group revenue reached EUR 2,760 million in the first half. That is up 3% at constant currency, and it is up 4.8% adjusting for the scope effect from the disposal of Paris Society Festivités. Again, FX and scope impacted revenue by a negative 2 points each, lowering the reporting growth to 0.6%. FX impact concentrated in Q1, and again, expect FX impact to be positive from Q2 onwards. M&F revenue growth up 4.8% at constant currency. That is in line with the algorithm at group level. Hotel assets and other revenue is down 5.4% at constant currency and up 0.8% adjusting for scope. Paris Society Rikas restaurant activity in Dubai was highly impacted in the first months of the conflict, although trading significantly improved in the later part of the second quarter. SMDL, which is sales, marketing, and distribution, and loyalty revenues, were up 4.7% at constant currency, which is pretty much in line with M&F revenue. To note that our loyalty contribution was up almost 4 points in the first half year-over-year, and we reached 121 million members as of June. Turning to management and franchise revenue by segment on slide 8, which grew at 4.8% in the first half. Q2 M&F revenue was up 1.6% at constant currency, impacted by lower incentive in the Middle East as well as fleet to franchise, a point we have commented in the previous quarters. Residential fees were stable in the first half, as we expected. PME M&F revenue was up 0.7% at constant currency. Slightly higher distortion related to the switch from management to franchise, as we have called out before, which is about 1 point negative impact on growth and also lower incentives due to the conflict in the Middle East. As a result, the distortion is more pronounced in the second quarter than in the first quarter. Luxury and lifestyle M&F revenue grew at 12% at constant currency. That is slightly above RevPAR. Q2 M&F fees were up a solid 9%. That segment is also impacted by the lower incentives in the Middle East, but we also had, as we call that, some termination fee in the first quarter, which helped offset. Now let's turn to EBITDA on slide 9. The group EBITDA reached EUR 563 million. That is up 6.5% at constant currency and up 7.4% adjusting for scope. We showed adaptability. We showed strong reactivity to navigate what is a challenging global environment. The reported EBITDA growth at 2.1% included a negative FX impact of EUR 23 million, again, concentrated in Q1, and we expect FX to turn positive in the second half. As for M&F, where more detail by division are provided in the appendix, EBITDA at 9.1%, strong margin improvement resulting from the profit protection measure implemented as of March, and to a lesser extent, some termination fee. We expect the full year M&F EBITDA margin improvement to be above our annual guidance of 100 basis points. Both divisions improved their M&F margins. As for hotel assets and other, EBITDA growth is impacted by the conflict in the Middle East, combined with scope, which accounted for negative seven points in the first half. As for SMDL, EBITDA was at 8.3% at constant currency, benefiting also from profit protection measure with an 8% margin. We expect SMDL EBITDA to be balanced between H1 and H2, and we expect full year margin to be above our 6% plus guidance. Finally, to note costs of our holding are down slightly with again strong cost containment measure. Moving on to the P&L on slide 10. In H1, we achieved an adjusted net profit of EUR 231 million and an adjusted EPS of EUR 0.83, flat versus prior year. Other income and expenses at a negative EUR 130 million in H1 included amongst primarily a EUR 44 million valuation adjustment on our Essendi stake, which reflects the time value of the earn-out, which we expect in this transaction. I am sure you have all seen the press release we just issued. EUR 37 million restructuring costs. This is mainly in the European region, and that is to support the move to a more franchise model. D&A was flat in the first half. Share of net profit of associates in the JV, minus EUR 37 million. Slightly more than half of the loss is related to Essendi, which has reported lower capital gains on disposal and high impairment losses in the first half. Net financial expense, driven primarily by a high gross debt. The cost of debt remains very reasonable. Income tax expense is flat. ETR is also flat if you adjust for non-recurring item, which carry a significant lower taxation both in 2025 and in 2026. We expect the full year ETR to be broadly flat. Minority interests are down year over year, and this is due to the lower profits in the Middle East in Ennismore. Turning to cash flow on slide 11. Recurring free cash flow reached EUR 194 million. That is up 42%, reflecting a 34% cash conversion, which is about nine points above prior year. Four main highlights. Cash interest increased as we expected, driven by the increase in debt level, but notably, an additional bond we issued in 2025 with the first coupon paid in H1 of 2026, as well as lower interest income. So H1 is pretty, I would say, representative of what the second half will be. Cash tax decreased from EUR 121 million to EUR 85 million, mainly driven by a tighter monitoring on installments between H1 and H2, and we did accelerate refunds in France. We expect our full year 2026 cash tax to be broadly stable versus prior year. Recurring investment were below last year at EUR 93 million. We controlled CapEx in what is a challenging geopolitical environment, but key money was also lower in the first half. For the full year, we continue to expect an increase of the CapEx in line with the guidance provided in the CMD, probably closer to EUR 250 million for the year. Working capital is stable year-over-year. Finally, net debt, which is EUR 3.5 billion at the end of June. As a reminder, that is about EUR 400 million up from December. Main movement in H1 being recurring free cash flow, which as you know is seasonal and more accruing to the second half, return to shareholders and hybrid coupon. To conclude, before I turn it over to Sébastien, let me now introduce our guidance on slide 12. RevPAR like-for-like growth is expected between 2% and 2.5%, depending on the pace of recovery in the UAE. The RevPAR guidance includes a second half scenario for the UAE, which is pretty much between where we are in June, which is around -40% to -20%. Net unit growth is expected at circa 3.5% in line with FY 2025, and it is a notch below my comments from last February, taking into account a few things, one, some delay in openings in the Middle East. As well as the impact of the Revo bankruptcy and some trends in Indochina eco-hotel, given the economic situation. That being said, as I commented before, the fee per room of the new openings is about twice the fee per room of the closures. Recurring EBITDA is expected between EUR 1,260 million and EUR 1,285 million. That includes a negative FX impact of EUR 10 million, and it represents an EBITDA growth year-over-year between 6% and 8%. This concludes my opening remarks, and I will now turn over the floor to Sébastien for some closing remarks. Martine, thank you so much. We are going to go into at least the H1 takeaways, the way we look at them. The first is, you probably heard me many times, I guess it is being confirmed, probably every quarter passing for the last three years now. It is the ability of Accor to navigate through the storms. Of course, we have storms, in many different countries over the last few years, and the last one had been, the Middle East impact between Iran and GCC countries. I was telling the board a couple days ago that, I guess that Accor has an enormous granularity on its cost. We have an enormous control on operating metrics, all over the different geographies. The CEOs, as the head of business departments, have a total grip on what they conduct, which actually permits us to navigate, to evaluate, to actually get into action, to build buffers, against countries in which we have not expected unfortunate events. I never had seen that before in this company in terms of actually ability to get close enough to result, if not on the result, even though it's not going according to plan. That's something which actually gives us an enormous comfort to actually be in front of you this morning. The number 2, why are we able to build buffers, is because we need to take actions on what we call PPP, you heard Martine, Profit Protection Plan. It's really putting together a lot of different initiatives, a lot of indecision, impacting a lot of different people in different countries in terms of hiring freeze, travel freeze, and a lot of actual investment no longer being made, not to the detriment of Accor moving forward. That plan has been put into action early March. You've seen the result quickly up until the first semester. That plan will not let go. We're going to be continuing deploying it as long as necessary, certainly for the second semester. The third is of a very different nature, which is all about loyalty partnerships. I'm going to go in it in a minute on the next page. It's something which is extremely important in our ability through all membership deployment, which is growing at a very fast pace. As you know, probably 15 million to 20 million additional members every year. Is trying to actually incorporate a lot of actually daily use of the all loyalty program, and we've signed deals, and again, I'm going to back to it in a minute, but it is a 15%-20% growth per year, both on revenues and on EBITDA, which is basically a faster growth that the one we can benefit from operation, which is 9%-12%. Finally, very proud, you know about it because it was announced 4 or 5 days ago. Extremely proud for the team to have the ability to sign Essendi, which is a very, very large transaction, probably by far the largest hotel transaction in Europe for the last 10 years. I think the last one was Booster, at the time we put its EUR 8 billion asset portfolio together. That is today also one of the largest. It's still a EUR 7.5 billion hotel portfolio in which we invited in Blackstone to coming alongside Colony. So very happy, very proud for the team, which is going to give us an enormous flexibility moving forward on cash deployment. On the next page, I just want to tap upon 2 minutes on Uber, Amex, IndiGo, and we're going to talk about Edge, which is Wajo. The one on the left is a very different nature, and the one we really didn't dwell with before over the last few years, which is really trying to go into enhanced travel experience. It's all about actually using different cards, different partnership into your daily use. With Uber, all the members of Accor, sorry, will be able seamlessly to go on Uber Mobility, Uber food deliveries, through the all Accor digital ecosystem, from their home or from any hotel stay. That is going to be done every day. People are going to be earning points. It is being announced with Uber in April. It is launched in H2, so you have not seen the benefit of it yet. It is being launched at the end of August. That will be made available to all the Accor members, Uber users in France, Germany, Poland, and then we will go, not on the food yet, but on the Uber service on UAE, Saudi Arabia, Qatar, and Morocco. More coming with Uber. We won the RFP against many of our peers. Very happy to go hand in hand with Uber Group. Amex, different nature. Amex is all about elite status match for the account members. Centurion Amex holders will go and receive all Accor platinum status. Amex non-Centurion platinum card members will be eligible to gold status. That also is launched in H2. So you have not seen the benefit of it yet. It was signed in May, and that is going to be displayed in 12 countries, Australia, Austria, Canada, France, Germany, Hong Kong, Italy, Japan, Mexico, Singapore, U.K., and New Zealand. That also is going to improve a lot of actually daily usage between Amex Group and Accor. The third, IndiGo, I will talk about India in a minute. IndiGo, we are going hand-to-hand with IndiGo Airlines, as you know, which is the largest airline carrier in India, which is probably today 64%-65% market share with well over 400 airplanes in India. That is going within the domestic Indian travelers, within the Indian traveling outside of India, mostly to Southeast Asia, to Middle East, and to Africa. H World is huge. H World, you know the partnership, very trusting one, with Chairman Qi Ji, the founder and CEO, and largest shareholder of what is today the second-largest hotel group in China, likely to be the first hotel group in China in a few years because of their pace of growth. We decided to put together their 310 million members with our 115 million members on trying to get reciprocity, not only on burning and earning points, but we actually went one step further on web distribution. Starting in August again, we are going to have all the Steigenberger Hotel, Intercity, basically all the H World acquisitions outside of China, mostly from Deutsche Hospitality acquired in 2019. All of those are going to be available on all Accor.com platforms. As a reciprocity, you are going to have the Accor premium and luxury hotels, Pullman, MGallery, Sofitel brands, in China. 130 of them will be available directly on H World booking channels. That also is going to be launched in H2, and that encompasses China, Europe, and the Middle East. It is just a confirmation of our ability to sign global deals and to be able to confirm the pace of 15%-20% growth gain partnership and EBITDA coming from loyalty members on H2 priorities. The first one you could not be surprised, is whatever we've done rightly, let's continue and let's do it even better if we could, which is the profit protection plan, the discipline, the rigor that, I guess Accor has been conducting over the last few years, has to remain, has to be the main focus, and has to be basically our compass to move forward, because the context is not going to get better in terms of actually challenging environment. We have actually very little control on geopolitical events, so we might as well actually control what we do internally. The number 2 is go for the growth. Reshuffle your own organization, and I'm talking about India here. Some of you know we are restructuring a lot of different holdings we had in India into one common vehicle, with our partner, IndiGo Airlines, which is actually the mother company of IndiGo Airlines, called InterGlobe. That is in the making. It should be finished by the first quarter of 2027. We have changed the CEO, of India, a woman who's coming from Marriott, Ranju. She's extraordinary. She came 6 months ago. Pace of growth signing within only 9 months have tripled the pace of signing and growth we had over the last few years. In both directions, which is very comforting. Certainly on Fairmont, Raffles, Sofitel, on the luxury side, but it's also actually growing much faster for Ibis, Novotel, and Mercure. So a lot to talk about in India, and we'll be able to actually give you better granularity coming next time. Meet with me in March or February for the UN result. Number 3, yes, we should be extremely focused, disciplined on cash allocation. So there's no better use of cash today. Strength accelerating the pace of share buyback. We finished the first round. We are already starting to launch a second round for EUR 225 million, and we are confirming to you that the first day we get cash in from Blackstone Colony on the buyout of a 30% of Essendi, confirming to you that this additional EUR 500 million share buyback will proceed day after closing, which is likely to be at the end of this year. And 4 is just to confirm, we're still spending a lot of time at the management level, at the board level on entertaining a final decision on whether or not, on Ennismore listing, is appropriate, which is also a game changer in terms of accelerating the pace of Ennismore growth, visibility, credibility, and probably ability to penetrate great markets such as North America. So that's where we are on my comments to you. Why not we leave floor now to many of you with your questions? Thank you. Ladies and gentlemen, if you wish to ask a question, please dial pound key five on your telephone keypad. If you wish to withdraw your question, please dial pound key six. The next question comes from Jaina Mistry from Barclays. Please go ahead. Good morning, Sébastien, good morning, Martine. Three questions, if I may. The first question is on net unit growth. I know you're guiding to 3.5%, which is slightly short of what you communicated at full year results. Could you quantify the drivers of how much is coming from RevPAR, how much is from the Middle East, how much is from China? How much of that should shift into next year, and are you still confident in hitting the 4.7% NUG next year? My second question is around cost savings. Would you mind quantifying how much in cost savings you've delivered in H1, and how much you expect to deliver it for the full year? Should we expect these costs to come back next year, or are these permanent savings? Very lastly, I know you mentioned your Middle East scenarios in H2, but could you just give us a bit more commentary on how you expect the recovery to pan out, and what you're seeing on the ground in the UAE? Thank you very much. Martine, why don't you go and then I'll have a comment on the Middle East at the end. Sure. Good morning, Jaina. So on net unit growth, Revo was about 40 basis points, in fact, in our guidance. That's basically the bulk of the gap versus what we had signaled in February. Middle East, yes, we have delays from H1 to H2, but also on net unit growth, and there's a bit from China, and in China it's really hotels are actually closing down as opposed to switching to another brand. On cost savings, so profit protection plan, it's EUR 40 million in the first half. The full year amount, frankly, will depend on the pace of recovery in the UAE. But if it doesn't recover, we're looking for EUR 70 million as a full-year amount. In terms of the recovery in the UAE, and those costs, by the way, and I'll give the same answer that I gave last year, when we also had a profit protection plan to cover some of the FX impact. The costs won't come back unless the revenue comes back. Probably not all of it will actually come back next year. In terms of, sorry, because I didn't answer your question on the NUG. Revo, in fact, the pace of openings, actually, we expect to be up double-digit growth in our openings this year. Therefore we're in the signings, as you've seen, the pipelines are very strong. So we expect, definitely to be above 4% in 2027. Closer towards the higher end of our guidance. But more on that when we actually come to that next year. In terms of recovery, pace of recovery. Look, the UAE in June was minus 40, minus 45. April was actually minus 80. So you can already see the pace of recovery. The way you should think about the guidance, if we stay where we are in June, which is, call it minus 40% for the second half, then basically that gets you to the low end of the guidance, both in RevPAR and in EBITDA. Assuming, again, some further profit protection planning. If we assume some recovery in the Middle East, from where we were in June, not full recovery, but give or take half, so around minus 20% for the second half and progressively, then you'd be at the midpoint. The one thing, Jaina, to add on the Middle East, which is worth noting. The booking notice, when people go to Middle East today is 7 days. Of course, people want to know better on the environment. But it's been, in the past, kind of actually 15 days. So the way we look at it is, as you know, the months of June, July, and August have been always extremely low in terms of activity because of the heat. We need greater visibility in terms of peace being put together, agreement between different countries. Probably by the 10th of October, the end of September, that's plenty enough for us to have a very robust month on November and December. So that's really where we should be having a greater granularity and better read would be basically at the end of September and early October. Until then, it does not change much. The sooner the better, of course, but we have that ability to basically wait until that date. Thank you very much. The next question comes from Jamie Rollo from Morgan Stanley. Please go ahead. Great. Thanks. Morning, everyone. Three questions as well, please. First starting with M&F second quarter revenue. Can we talk a little bit about the gap between the constant currency revenue growth and the sum of net unit growth and RevPAR? Because obviously you have got the drop in incentive fees, so could you please quantify that? Also you talked about some additional termination fees. I thought those were Q2, but Martine, maybe you said Q1, but again, could you quantify both those two numbers, IMFs and termination fees, just as sort of change year on year? Secondly, on SMDL, so looking at a more even split this year, but that would still imply about EUR 112 million of EBITDA, so up 20% or so year on year. What is the partnership income, please, behind that? What really accrues to Accor, and when do you see the margins going back to 6%, if ever? Then finally on Ennismore, thank you for giving us the first half EBITDA of EUR 84 million. It would be helpful to get the year-on-year change. I know your minorities have halved, but obviously that's amplified by leverage and so on. Just be helpful to get what EBITDA was for Ennismore. Also, in terms of timing, when do you think we might hear more about the Ennismore listing process? Thank you. Sure. On M&F revenue, the termination was in the first quarter, so it doesn't impact the second quarter. The second quarter fundamentally reflects the activity. It's stronger in the luxury and lifestyle division because you have basically stronger network growth. But also Fairmont and Raffles performed extremely well in North America, which helped compensate the impact of incentives. Therefore, incentives impact is actually lower for luxury and lifestyle than it is for PME. In PME, it's basically about 1 point of flip to franchise and give or take 2 points on the incentives. So for the quarter, give or take about 1 point on flip to franchise and 2 points on incentive. On SMDL revenue, you're right, it is balanced, therefore your number is correct. What's driving that is essentially the distribution, and the partnership revenue. What we said on partnership, and subscription EBITDA, because we're really looking at both, is that our expectation was that EBITDA would double by basically 2029, 2030. Currently, it's around EUR 59 million if we take the two together on a full year basis. So that gives you an estimation. Look, we gave a guidance of 6% plus for SMDL, because we want to make sure that we keep a balance between growing our profits and reinvesting in the business. So the 6% plus guidance is still appropriate. Obviously, in the years where we have a more challenging situation, we also activate levers in that segment. Ennismore EBITDA is EUR 84 million in the first half. But I think your question was how does it compare to the first half of 2025? It's actually slightly down a couple of points. On the- Thank you. On the timing of the Ennismore decision, it is way before the end of the year. We probably should make a decision by the end of the third quarter, then to decide to go or no go on the potential listing of Ennismore. You are right to say, which is of no surprise to any of you listening to us, that if we were to list Ennismore, you are correct, it will be listed in America. Thank you very much. The next question comes from Leo Carrington from Citi. Please go ahead. Good morning. Thank you. Could I ask firstly on the, some more details on the composition of the pipeline signings in H1, both in terms of the region and also PME versus luxury and lifestyle? Would it be fair to assume, given the very high level of your pipeline growth, does this indicate more new build, ground up hotels moving into the pipeline, as you sign them rather than conversions? Then second, final question. I am very curious to see that positive and healthy gap between fees from additions well ahead of those from churned hotels. Can this gap be sustained as the PME churn normalizes down as the China closures slow down? Or do the two converge eventually? Thank you. On the composition of the pipeline, basically, if we look at PME, the pipeline, the number one region is still MEAPAC. But you have to remember that in MEAPAC, it is mostly Saudi Arabia and Egypt. There is a very low share of our pipeline that is actually in the UAE, both for PME and luxury and lifestyle, so primarily KSA and Egypt. Then we have our scale pipeline in China and Asia and Europe and North Africa. So the European region. The pipeline is actually more skewed toward premium and midscale than eco. For luxury and lifestyle, pretty much the same thing. It is again, MEAPAC. The Americas region is stronger from a pipeline perspective for luxury and lifestyle than for PME, but MEAPAC is still the largest region when it comes to pipeline, and it is true for growth. Actually, we have not seen a slowdown in signing in the Middle East. But again, mostly KSA and Egypt. With regard to your question on new build conversion, no, the mix of conversion is 55%. That is pretty steady with where we have been. We have been between 50% and 60%, and frankly, we do not intend or we do not, sorry, we do not expect that mix to change. I am sorry, could you repeat your last question, Leo, because I am not sure I got that. China. It is the, basically the Different between the churn being of a lower fee level versus additional rooms being signed of a much- Oh, okay. better fee stream. How is China? Is China going to get better or going to get worse? Just on China a minute since I am actually a H World expert is too strong, but at least very close to situation. H World is opening well above 2,000 hotels a year now, and they are closing 500 or 600 hotels. So they actually, every year passing, they are cleaning their own network, and we are impacted because of this. A lot of the Ibis was developed seven, eight years ago with us, having basically closing certainly in secondary, tertiary cities. It does not occur into primary cities within China. Chairman Xi Jinping is really looking for a better product, in those different cities at the expense of an older product, which is fine. All of that is done in total coordination with us. So you are absolutely correct. Whatever we lose out of those Ibis closing in China on tertiary cities, it is very low fee stream for us. We are much better off for him to open a better product in that same city of a greater quality. Which is why we do not have any resistance factor. Which is also why, and some of you, I sound like a broken record here, but I have been really putting a lot of sensibility to each of you on the fee per room on the net unit growth is one thing, but what matters to me 10 times more is what is the absolute level of fees that we get every year compared to the year before. I can confirm to you, 2026, we are going to much better absolute fee stream from all the hotel we opened this year versus the hotel we opened last year and the year before. Yes, NUG and the churn sounds to be probably heavy, but all of that, if not 80% of that, is volunteering, both on accepting what is being done in China and finishing the job, as we said to you on the purge project, which is the detractors of many of our brands closing. RevPAR, clearly, that was not in the plan, and we have to accept it. That is an unforeseen event. But yes, I am encouraging each of you to look at the fees per hotel being open versus the fees per hotel being closed, and that should give you an enormous comfort. Thank you, Sébastien. Thank you, Martine. The next question comes from Kate Xiao from BofA. Please go ahead. Thank you very much for taking my questions. First question, can you just, a follow-up to an earlier question on signings. Martine, can you give some color on signings growth? You mentioned it was strong. Was it above or below that 10% or 11% pipeline growth lately? Just want to get a sense of latest signings growth there, especially in the Middle East region. Second question, free cash flow, recurring free cash flow conversion. Obviously that is down quite a bit in the first half. How should we think about it for the full year? Would you say probably just around the same level of conversion for this full year from EBITDA? My third question, Sébastien, I wanted to ask you, obviously, congratulations on the Essendi transaction. What in your mind is the next focus of the asset light and simplification journey? Anything else you can point to for us to understand what is the next focus for you? Thank you. Yeah. Thanks for your question, Kate Xiao. On signings at group level, they are up 13%, so that is 2 points above the pipeline growth. The signs are pretty much in the regions where the pipeline is, and again, no slowdown in the Middle East. With respect to free cash flow, our free cash flow is seasonal. When you actually look at the cash flow conversion in the first half, it was 34%. Yes, it is less than the full-year cash conversion, but it is actually up 9 points from last year. Last year was 25%. So, it is just seasonality in our cash flow. On a full year basis, we are probably going to be slightly below where we were last year, just because we have a bit higher CapEx, but still very strong cash flow generation. I will let Sébastien answer the question on- Kate, I almost wanted to say a job is done, in terms of Essendi being closed. We are going to be less than 1.5% asset light. Mantra is probably what we need to clean up, but we have done two-thirds of the job over the last couple of years. We still have some small lease obligation in Australia, and we are tackling it. Not an easy environment today, but not impactful at the group level, but we need to finish that last third. The rest we have a very performing lease, on Cairo, a very big Sofitel, and very happy to keep it as it is. Probably what you are going to be noticing as probably the greatest exposure to leases happens to be Paris Society on the restaurant angle, which is very profitable for us. On a management model, on the restaurant model, we are going more and more on management contract, but those are the much lesser profitability, in terms of EBITDA contribution. Margin is obviously better, but EBITDA contribution. So Paris Society, though it is small, will continue probably doing half and half between signing leases and management contract. I will give you a very small example, which is very telling. Gigi, which is one of the most robust brand, in restaurant. We sign a lease in Bordeaux, actually at the Mandarin Oriental Hotel, where they have been looking after having Gigi in their own premises. It is an extraordinary success for the last month and a half and for the summer. You are talking millions of EUR EBITDA compared to maybe hundreds of thousands of EUR had we done a management contract. So, it is rewarding. It is done in a very controlled manner. We don't take much risk on basically when we sign it, but it is part of the Ennismore food and beverage model, and we should not be departing from it. Thank you. The next question comes from Jarrod Castle from UBS. Please go ahead. Good morning, everyone. Also three from me. There was a EUR 44 million write-down in the P&L linked to Essendi on the earn-out. Thinking forward, is this a once-off? I guess what assumptions changed? I know you mentioned it's time value of money, but if you can just give a bit more color around that write-off. Also, really good control and I think decent cash conversion. But one of the items you mentioned is, you're pretty tight on your investments, and you also mentioned key money. I'm just wondering what's going on with key money. It seems like you don't have to spend as much, which is a bit surprising given your findings and your pipeline growth. Is there any color on key money, please? Then maybe one for you, Sébastien. I guess pre-COVID, you undertook an agreement with Air France on loyalty point sharing, et cetera, and you are obviously expanding a lot of partnerships. I just want to get some color from you in terms of how you think that has gone and the opportunity for more signings like this. Thanks. Sure. Jarrod, thanks for your question. On Essendi, basically we put this stake as an asset held for sale. When we do that we need to basically put the asset at fair value. That means taking the earn-out or taking a view on the potential earn-out and taking the NPV of that earn-out. Fundamentally, the way you should think about that EUR 44 million, it is the time value of that earn-out. When that earn-out is paid, essentially, that EUR 44 million is a non-cash item. It is a one-off. In terms of the CapEx, the reason there is not a ton of key money in the first half is just because we have not had a lot of openings in the first half. Typically, they are more skewed to the second half. We haven't seen pressure on key money per se, and we're still within exactly the trajectory we had at the CMD, which is Accor's CapEx will grow from two hundred to three hundred million between '23 and '27. And '26 will obviously be therefore up from '25 due to key money, but it's more related to the pace of openings than the actual key money per asset. And I'll let Sebastien. It is growing better than we expected when it comes to what we signed with Air France on Flying Blue. We have now this double-dipping in between the two companies on earning miles when they stay at an Accor hotel, and we earned all points when you fly with Air France-KLM. The volume is better than we expected, and the price is actually very profitable for Accor. What we are doing with the airline industry is we are going actually further ahead on two fronts, which is interesting. The first front, which we started seven years ago with Qantas in Australia, is on Accor being participant on what I talked about, which is enhancing the travel experience. Qantas, we signed with them. Accor on a white label is fully responsible for managing the first-class, business class lounges of Qantas all over the world. We are doing it and we are conducting the same kind of analysis, with a lot of Emirates carrier. Are we with U.S. carrier looking at us for their first-class lounges, in which Accor could be the service operator. On the elite match status, we are also progressing on many of those airlines on giving cross benefit, not only earning points and burning, but actually on status match. I think on a scale of 10, we are only at 3 or 4. You are going to see visible action and initiative being confirmed to you likely in the next 12 months of significance. That has to do with the display of the 115 million of Accor in so many geographies and so many hubs. Uber is also part of it, because since you can actually have your airline partnership, then when you get to the airport, you can, through the old company.com, get to Uber services. All of that comes together between the airspace and when you actually get on the floor. That is where we are. But it is a big priority for us because as some of you, Jamie talked about, is that partnership revenue does not cost Accor much. It is extremely rewarding part of SMDL, EBITDA, and that permits to get that 15%-20% growth a year, and there is no reason why we should not be accelerating on those. Great. Thank you. The next question comes from Alex Brignall from Rothschild & Co Redburn. Please go ahead. Morning. Thank you. I will go for three as well then. Two relatively simple ones, and then one which is an opinion one really. On China, you obviously have talked about higher churn rates, and then churn coming down just for the overall portfolio. How do we think about the churn in China within that? Is this a sort of pull forward of churn that had broadly expected with H World, or is this just different to the cadence of churn that you had talked about historically? On Ennismore, could you just reiterate, I think, Martine, that you have told me directly in the past that you would never go below a controlling interest in Ennismore. Could you just talk about what the options are potentially with an IPO? Then the third one is owner costs. Something I have had an interest in for a while, but it seems like Marriott has let the cat out of the bag a little bit on economic balance between franchisors and franchisees with their credit card deal. Could you just talk a little bit about your relationship with your owners, the fees that you are paying? You obviously make materially less credit card fees than Marriott does, but also the fees that they pay for the administration of marketing funds and loyalty funds and how those relationships are going. Thank you. Yeah. On China, I should have said it earlier, you make me think of it, Alex, is let's not underestimate the impact of the real estate crisis in China. Most of the wealth of families in China happen to be in real estate, and that real estate has been going south for the last 2 and a half years, which is why you have an enormous GDP slowdown. Since those guys have less wealth, they travel less, and the most impacted segment is the lower economic segment and lower mid-scale, which is why Ibis is kind of actually going from tertiary cities to actually capital cities in which there is more wealth. So when you are going to see a recovery, when and if, you are going to see a recovery on the real estate-dependent economy, you are probably going to have a lesser churn in Ibis segment within China. However, I really believe that H World will continue basically improving their own network with better quality premises as opposed to the one open 12 or 15 years ago. So it is still going to be significant, but as I told you, and again, I am so draconian on this one, it is fine, absolutely fine. It has no financial impact on us of significance if they were to close more Ibis hotels in China. As long as the Ibis brand continue to be open with a better fee stream, it is fine. I know it bugs you on the net unit growth percentage, but please go deep into it, dive in, and then you understand that, yes, it is very much non-material at the Accor level. On Ennismore, I cannot say too much. One is because decision has not been made. What I can actually confirm to you, which is very true, is there is no scenario in which Accor will go underneath 51% of Ennismore. We have today 60%. If we were to do a transaction, that diamond has to be preserved within the Accor consolidated EBITDA. It is the fastest gross EBITDA machine of Accor. It is impacted by the Middle East this year, but Middle East has been super robust for the last 10 years and will be very robust for the next 10 years. We are very happy of the Middle East footprint, both for Accor and for Ennismore. It is a vital, crucial subsidiary of Accor, and we should preserve that control of the growth and a lot of decision-making of Ennismore. On the owner's cost, we have absolutely no debate whatsoever on the relationship on who gets what. Everything is fully transparent. We have so-called marketing fund. Everything is done. We have a very good relationship with the largest franchising association in Europe. Actually better and better every year passing. I was with them two weeks ago in a big forum. The one thing I am going to talk about, and surprisingly enough, none of you asked a question so far, because that is part of the ongoing discussions for the last six months with the owners, is AI, is what they are looking at Accor as a guide, as basically the curator, the orchestrator, is how could we, Accor level, incorporate AI automation within the premises of theirs? Can we actually help them reduce their costs? Likely 15% to 30% over the next 12 to 18 months. How could we actually have a better personalized itinerary journey, knowledge database of the old members, not old members? How could we actually deliver a better service? How could Accor incorporate AI on anything which is PMS, CRS, CRM? Those are the bulk, if not two-third of our conversation as it should be with our owners over the last 12 months, and will be probably 90% of our conversation next 12 month. Has nothing to do with who gets what on the fees. It is how could we be better both for them on the margin and net in their pocket, and for us as a better orchestrated distributor. It is a very open and constructive discussion because there is a lot of savings to be made and a lot of actually RevPAR to be gained. That is the relationship as it stands. Brilliant. Thank you very much. The next question comes from Simon Lechipre from Jefferies. Please go ahead. Good morning. I have three as well, please. First of all, on hotel asset and others, could you quantify the revenue performance of Paris Society and Rikas for H1 and how much cost savings came to offset this revenue drop? Secondly, on branded residencies, if you can give us an update. I think total fees last year were around EUR 50 million. How much do you expect for this year? Also, how should we think about next year, if there is any delay in construction and openings on the back of the conflict, given the Middle East exposure there? Lastly, coming back on your question on the NUG and looking at luxury and lifestyle, I think it was up 7.2% in H1, 7.5% last year. So quite impressive, but still slightly short of your medium-term target of 8%-10%. Can you explain where the gap is coming from? Also, if you can give us some color on the churn versus the growth openings in luxury and lifestyle. Thank you. Sure. Good morning, Simon. On HA and others, if you look at the first half results, the impact is really in Paris Society Ennismore's business. Basically, the way you should think about it is, there is about a EUR 10 million EBITDA impact on H1 in HA Hotel Assets and other, and that is basically the impact on the restaurant business. That is net of the profit protection fund, obviously. Residents, branded residents should be a bit lower in terms of fee this year, because we are going to have potentially some delays in the openings, going into next year. But we are still very optimistic about this business. We are not seeing cancellations, really, of projects. What we are doing very actively, is actually diversifying the portfolio of branded residencies, and moving to European and U.S. and Mexican markets. We are quite comfortable with the fact that we will continue to grow our fees in branded residencies. On the lux lifestyle, on the pace of growth, it is 6.5% versus 8% and 10%. It is mostly due to Sofitel and Fairmont and independent of the year. Fairmont was actually good last year. It is actually much lower this year. It is 8% if you exclude the JO&JOE transfer. I guess close enough to 8% and 10%. It varies depending on the year. I will give you an example. Fairmont, Raffles, a bit slower to the entrance opening, but it is going to be much faster in the next 12-18 months. We have been signing big Raffles Fairmont in Paris, in Lake Como, in Courchevel, and many great places in Jaipur and other in India. Sofitel has a great pipeline in terms of actually the brand has been totally reestablished by Maud Bailly and so is MGallery. It is not as robust for the years 2025, 2026, probably because they spend more time in basically looking after the detractors, basically trying to get a lot of the hotels being redeveloped and nominated being spanner. Nothing to worry about. The lux lifestyle is on the dot on what they need to do. I am just saying something which sounds evident to you is we have to be able to cognizant, I guess. The guys and the management level of Ennismore, they have to face the Middle East crisis, and they have to work their ass off on whether Ennismore could be public. That basically implies a lot of different filings, in terms of actually administration, bureaucracy, disclosure, and so forth. Yes, they are trying to do everything at the same time. I guess, let us actually not be asking too much of them. They cannot be on the road developing the same time they are actually with us on trying to get the best decision ever. Nothing to worry about. We are going to be between the 8% and the 10% certainly moving forward, and we are today the 8.2% with JO&JOE not having been transferred. Thank you. Voila. I don't know whether we probably should have a last question because then we need to get going. Maybe there was no last question then. As a reminder, if you wish to ask a question, please dial pound key 5 on your telephone keypad. Well, again, I shouldn't have said what I said because you have no further question. I'm, again, very thankful for you connecting. We were going to go on a road with Jean-Jacques, which is right across the table from me, Martine and the team. Very much looking forward to meet some of you in the next four or five days, and we keep fighting. We keep fighting, and we're going to end up where we need to be, to be on the mark for the UN numbers. Merci beaucoup. Let's talk whenever you want. Thank you, everyone. Ciao. Bye-bye.