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Delta Air LinesD a l a t a H o t e l G r o u p P L C A N N U A L R E P O R T A N D A C C O U N T S 2 0 2 1 ANNUAL REPORT AND ACCOUNTS 2021 A time to look forward ►► ►► ►► ►► > > > > > > > > > > > > To grow and evolve as an innovative and sustainable international hotel company, delivering excellence in customer service, driven by ambitious people flourishing within a culture of integrity, fairness and inclusion. Our Values ►► page 79 ►► page 17 ►► page 53 John Hennessy ►► pages 53 to 58 Dermot Crowley > > > > > > > > > > > > > > > > > > > > > > > > Strategic Growth Ambition Market-leading performance at existing hotels; ambitious expansion in UK and European markets. ►► page 27 New markets Growing the pipeline Delivering our current pipeline Our existing portfolio of established hotels Growth Drivers Energy powering our strategic ambition ESG Priorities Sustainable business model foundations OUR CULTURE An entrepreneurial culture founded on integrity and fairness with empathy for our stakeholders and the environment. ►► page 20 OUR PEOPLE Empowered to take responsibility, we reward the energy, ambition and achievement of our people and value the contribution of each employee. ►► page 19 CUSTOMER FOCUS Our brands evolve with customer expectations to create a guest experience delivered personally. ►► page 23 Diversity and inclusion ►► page 21 Learning and development Labour practices ►► page 21 ►► page 22 Health, safety and security Data privacy ►► page 25 ►► page 24 ►► page 31 ►► page 32 ►► page 26 INNOVATION Challenging established norms, we foster and promote new ideas to create value across the stakeholder experience. ►► page 28 Carbon emissions Sustainable infrastructure Sustainable procurement GOVERNANCE High-functioning governance structures provide oversight, risk management and ensure accountability. ►► page 29 FINANCIAL DISCIPLINE Clear investment criteria and disciplined capital allocation. ►► page 29 Information security ►► page 30 Transparency ►► page 30 Inputs ►► ►► ►► ►► ►► ►► What we do Outputs Aggregate Payroll Costs Adjusted EBITDA ►► page 133 ►► page 36 Contributions to our charity partners in 2021 ►► page 34 Guest satisfaction rating ►► page 23 Food and Beverage Purchases Interest paid on bank loans, including fees Green Fund for projects reducing emissions ►► page 113 ►► page 31 Rent paid ►► pages 149 and 150 Revenue ►► page 109 Margin ►► page 126 Earnings ►► page 180 Cash ►► page 41 Carbon Water Female Leaders Gender Pay Gap % We initiated a review of ESG priorities with input from the board, management and stakeholders. Management assessed priorities based on alignment with the group’s strategy, principal risks and impact on stakeholders. ►► pages 17 to 34. People Planet Society Diversity and inclusion Learning and development Health, safety & security ►► page 21 ►► page 21 ►► page 25 Carbon emissions Sustainable infrastructure ►► page 31 ►► page 32 Data privacy Sustainable procurement ►► page 24 ►► page 26 Information security ►► page 30 Governance Our priorities balance group and stakeholder interests. e l p o e P t e n a l P y t e i c o S e c n a n r e v o G ►► ►► ►► ►► ►► ►► ►► ►► ►► ►► ►► ►► ►► ►► ►► ►► ►► ►► 2021 headlines At Dalata we recognise that the group’s success is based on creating value in all of our stakeholder relationships. We recognise eight stakeholder groups we believe are critical to Dalata’s success. These are grouped into three categories: Business – those we engage with daily in every corner of our operations; Financial – those who trust us to manage the business to provide a return on their investment; and Societal – those we impact through our business activities, and the planet. ►► page 72 ►► page 19 ►► page 23 ►► page 26 ►► page 27 ►► page 27 ►► page 27 ►► page 34 ►► page 31 Our people drive our success, reflect our culture, and create our customer experience. Our ESG materiality survey recognised our employees as our most important stakeholder group. Our business model depends on the developing skills and retaining an engaged workforce to meet the expectations of our customers and other stakeholders. OUR PEOPLE OUR CULTURE DIVERSITY AND INCLUSION LEARNING AND DEVELOPMENT 115,000 47,000 +72% 59% 40% 36% 7.0% Graduate Success LABOUR PRACTICES EMPLOYEE WELLBEING Delivering excellence in customer service is at the heart of Dalata’s purpose When we refer to customers we mean our guests and also corporate customers, tour operators, sporting organisations, clubs, societies and many other business to business relationships. In Dalata we aim to be easy to do business with and provide a positive experience for all customers and guests through their journey with us. CUSTOMER FOCUS DATA PRIVACY ►► page 78 445 ►► page 56 HEALTH, SAFETY AND SECURITY 84% Healthy supplier relationships matter for our guest experience and customer satisfaction. We tender centrally for all major operational and capital goods and services contracts, and many of our suppler relationships have developed into long-term partnerships. Our centralised order and invoice matching and payment processes are designed for transparency and efficiency. SUSTAINABLE PROCUREMENT SUPPLY CHAIN LABOUR The support of our financial stakeholders ensures Dalata is financially strong and well placed for post-pandemic recovery. The support of our financial stakeholders for the duration of the Covid-19 pandemic, through the investment of equity by shareholders, the extension of lending facilities by our banks and continued support for new projects from real estate investors has ensured that the group is financially strong and well placed for post-pandemic recovery. OUR GROWTH AMBITION 37% 2,202 rooms INNOVATION ►► page 32 FINANCIAL DISCIPLINE OUR GOVERNANCE ►► page 60. ►► pages 65 to 70. 43 ►► pages 35 to ►► pages 51 and 52 45 to 52 ►► pages ►► page 54 ►► pages 13 to 16. TRANSPARENCY INFORMATION SECURITY ANTI- BRIBERY & CORRUPTION ►► page 56. We recognise the connection between realising our strategic objectives and having a positive social impact. We identify carbon emissions and sustainable infrastructure as ESG priorities and have developed water stewardship and waste management programmes to manage our environmental impact. We have committed to specific carbon reduction targets by 2026 and expanded our sustainability and climate change reporting and disclosures (see Sustainability and Climate Change ►► pages 53 to 58). CARBON EMISSIONS ►► page 53. SUSTAINABLE INFRASTRUCTURE WATER STEWARDSHIP WASTE MANAGEMENT BIODIVERSITY GOVERNMENT & REGULATORS ►► pages 136 and 137 Engagement with our local communities is part of Dalata’s decentralised management philosophy. Our hotels led by the general manager support their local communities from where we draw most of our workforce as we aim to be the employer of choice in the hospitality sector. EMPLOYABILITY CHARITY PARTNERSHIPS ►► page 43 Group Revenue and Earnings ►► pages 136 and 137 ►► page 43 ►► page 43 Trading Review by Segment ►► page 43 ►► page 43 ►► page 43 ►► page 43 ►► page 43 ►► page 43 Central Costs and Share- Based Payments Expense A return to positive free cash flow Central costs Share- based payments expense 10.3 8.1 11.8 2.2 2.3 2.7 ►► page 43 ►► page 43 Asset-backed Balance Sheet ►► page 43 Strong covenant for real estate investors who are funding our growth Security for our banking partners Optionality to sell an asset to provide cash for protection or re-investment Outlook for the future ►► pages 191 to 197. Carol Phelan July 2021 to June 2022 | 12 months of growth > > > > > > > > > > > > > > > > > > > > > > ►► pages 79 and 80 Increasing Increasing ►► pages 79 and 80 ►► pages 53 to 58. ►► pages 47 to 50 > > > ►► page 47 ►► page 48 ►► page 50 ►► pages 7 to 16 ►► page 42 ►► pages 35 to 41 ►► pages 45 to 50 ►► pages 169 to 177 ►► page 178 ►► pages 159 to 164 ►► page 159 > > > ►► pages 45 to 50 > > ►► page 69 ►► page 60 > > > > > > > > > > > > > > > ►► page 153 ►► page 27 ►► page 137 ►► page 159 > > > > > > We identified ten targets (from seven of the goals) aligned with our ESG initiatives. The 17 Sustainable Development Goals (SDGs) lie at the heart of the United Nations 2030 agenda for sustainable development, which was adopted by all UN Member States in 2015. We considered the goal’s 169 targets to assess those meaningfully aligned with our ESG programme. e l p o e P t e n a l P y t e i c o S European non-financial reporting directive Dalata complies with the European Union (Disclosure of Non-Financial and Diversity Information by certain large undertakings and groups) Regulations 2017. In this table, we set out the group’s response to managing its non-financial priorities and advise where further information on compliance may be found in this report. ►► page 56 ►► page 26 ►► page 19 ►► page 23 ►► page 19 ►► page 26 ►► page 34 ►► page 23 ►► page 19 ►► page 26 ►► page 27 ►► page 9 ►► page 46 ►► page 45 ►► page 47 ►► page 12 Standard for Hotels and Lodging (October 2018). SASB helps companies to identify the ESG concerns most relevant to their financial performance using the SASB materiality finder and to disclose this information to their investors. In 2021 we positioned climate change at the heart of the group’s business strategy. Education, research and engagement with our stakeholders has shifted the focal point for our climate change response from hotel operations to the boardroom. ►► page 32). Dalata supports the recommendations of the TCFD TCFD is a framework that requires companies to disclose their climate-related risks & opportunities. Dalata is committed to providing consistent, accurate, and comparable climate-related risk information for all stakeholders. We currently disclose climate-related risk and opportunity information through our CDP response. We will continue to put a focus on climate-related risk and are committed to developing our processes to meet all the recommended disclosures of the TCFD framework. > > > > > > > > > > > Our taxonomy eligible activities Under the Taxonomy regulation, we acknowledge the requirement to identify business activities that are Taxonomy-eligible and to disclose the percentage of Turnover, Capital (CapEx), and Operating Expenditure (OpEx) that is attributable to these activities. ►► page 119 ►► pages 17 and 18. John Hennessy ►► page 72 ►► page 3 ►► page 71 and 88 ►► pages 87 ►► page 69 John Hennessy Dermot Crowley Shane Casserly Carol Phelan Margaret Sweeney Elizabeth McMeikan Robert Dix Cathriona Hallahan Gervaise Slowey Seán McKeon Dermot Crowley Carol Phelan Shane Casserly Stephen Clarke Anthony Murray Rachel Cafolla Niamh Carr Keith Rynhart Niall Macklin Paul Moloney Duncan Little Des McCann Conal O’Neill Seán McKeon Emma Dalton Dawn Wynne Philip O’Neill Claire Oliver Martha Mannion Aine Doyle Sharon O’Donoghue Richard Noake Patrice Lennon Tony McGuigan Adrian Sherry Karen Halpin Caitriona Conroy Macarten McGuigan Michael McCann ►► pages 61 and 62 ►► pages 17 and 18 . ►► page 67 > > > > > > > > > > > > > > > > > > > > > > > > > > ►► page 60 ►► page 71 ►► page 71 ►► page 73 ►► page 79 ►► page 81 ►► page 71. ►► page 45 ►► pages 47 to 50 John Hennessy ►► page 69 76 ►► pages 75 and Robert Dix ►► pages 45 to 52. ►► page 131 ►► page 48. Elizabeth McMeikan ►► page 56 ►► page 88 ►► page 93 Margaret Sweeney ►► page 90 Directors’ Remuneration Policy 2020 – 2022 Annual Remuneration Report €’000 2022 ►► page 56 ►► page 194 ►► page 192 a. b. c. €’000 2022 2021 a. b. c. d. e. f. g. h. ►►page 92 i. j. a. a. b. c. a. b. c. d. e. a. b. c. d. ►► page 93 Margaret Sweeney ►► pages 45 to 52 110 ►► pages 109 and ►► page 94 ►► page 54 ►► pages 35 to 43 ►► pages 73 to 78. ►► pages 61 and 62. ►► pages 7 to 34 ►► pages 45 to 52 ►► page 12 ►► pages 114 and 115. ►► pages 45 to 52 ►► pages 51 and 52 John Hennessy Dermot Crowley Statement of Directors’ Responsibilities in respect of the Annual Report and the Financial Statements John Hennessy Dermot Crowley Independent Auditor’s Report Report on the audit of the financial statements • • • • • • • Independent Auditor’s Report Key audit matters: our assessment of risks of material misstatement • • • • • • • Independent Auditor’s Report • • • • • • • • • Independent Auditor’s Report • • • Independent Auditor’s Report • • • • • • • • • • Independent Auditor’s Report • • • • • • • • • Respective responsibilities and restrictions on use Independent Auditor’s Report Patricia Carroll Consolidated statement of profit or loss and other comprehensive income Consolidated statement of financial position John Hennessy Dermot Crowley Consolidated statement of changes in equity Consolidated statement of changes in equity Consolidated statement of cash flows Notes to the consolidated financial statements 1 Significant accounting policies • • • Notes to the consolidated financial statements 1 Significant accounting policies (continued) • • • Notes to the consolidated financial statements 1 Significant accounting policies (continued) • • • • • • • Notes to the consolidated financial statements 1 Significant accounting policies (continued) • • • Notes to the consolidated financial statements 1 Significant accounting policies (continued) • • • • • Notes to the consolidated financial statements 1 Significant accounting policies (continued) Notes to the consolidated financial statements 1 Significant accounting policies (continued) Notes to the consolidated financial statements 1 Significant accounting policies (continued) Notes to the consolidated financial statements 1 Significant accounting policies (continued) Notes to the consolidated financial statements 1 Significant accounting policies (continued) Notes to the consolidated financial statement 1 Significant accounting policies (continued) Notes to the consolidated financial statements 2 Operating segments Notes to the consolidated financial statements 2 Operating segments (continued) Notes to the consolidated financial statements 2 Operating segments (continued) • • • • • • Notes to the consolidated financial statements 2 Operating segments (continued) • • • Notes to the consolidated financial statements 2 Operating segments (continued) Notes to the consolidated financial statements 2 Operating segments (continued) Notes to the consolidated financial statements 3 Statutory and other information Notes to the consolidated financial statements 4 Other income • • • 5 Finance costs Notes to the consolidated financial statements 6 Personnel expenses Notes to the consolidated financial statements 7 Share-based payments expense Notes to the consolidated financial statements 7 Share-based payments expense (continued) Notes to the consolidated financial statements 7 Share-based payments expense (continued) 8 Government grants and government assistance Notes to the consolidated financial statements 8 Government grants and government assistance (continued) Notes to the consolidated financial statements 9 Tax credit Notes to the consolidated financial statements 9 Tax credit (continued) 10 Impairment • • • • • • • Notes to the consolidated financial statements 10 Impairment (continued) Notes to the consolidated financial statements 11 Intangible assets and goodwill Notes to the consolidated financial statements 11 Intangible assets and goodwill (continued) Notes to the consolidated financial statements 12 Property, plant and equipment Notes to the consolidated financial statements 12 Property, plant and equipment (continued) • • Notes to the consolidated financial statements 12 Property, plant and equipment (continued) Notes to the consolidated financial statements 12 Property, plant and equipment (continued) • • • • − − − − − − − − Notes to the consolidated financial statements 12 Property, plant and equipment (continued) − − − − • • • • 13 Leases Notes to the consolidated financial statements 13 Leases (continued) • • Notes to the consolidated financial statements 13 Leases (continued) Notes to the consolidated financial statements 13 Leases (continued) • • • • Notes to the consolidated financial statements 13 Leases (continued) • • Notes to the consolidated financial statements 13 Leases (continued) Notes to the consolidated financial statements 14 Contract fulfilment costs Notes to the consolidated financial statements 15 Trade and other receivables Notes to the consolidated financial statements 15 Trade and other receivables (continued) 16 Inventories 17 Cash and cash equivalents Notes to the consolidated financial statements 18 Capital and reserves Notes to the consolidated financial statements 18 Capital and reserves (continued) 19 Trade and other payables Notes to the consolidated financial statements 19 Trade and other payables (continued) 20 Provision for liabilities Notes to the consolidated financial statements 20 Provision for liabilities (continued) 21 Loans and borrowings Notes to the consolidated financial statements 21 Loans and borrowings (continued) Notes to the consolidated financial statements 21 Loans and borrowings (continued) Notes to the consolidated financial statements 21 Loans and borrowings (continued) Notes to the consolidated financial statements 21 Loans and borrowings (continued) Notes to the consolidated financial statements 21 Loans and borrowings (continued) Notes to the consolidated financial statements 22 Derivatives • • • Notes to the consolidated financial statements 23 Deferred tax Notes to the consolidated financial statements 23 Deferred tax (continued) • • • • • • Notes to the consolidated financial statements 23 Deferred tax (continued) Notes to the consolidated financial statements 24 Financial instruments and risk management Notes to the consolidated financial statements 24 Financial instruments and risk management (continued) − − − Notes to the consolidated financial statements 24 Financial instruments and risk management (continued) Notes to the consolidated financial statements 24 Financial instruments and risk management (continued) • • • • • • Notes to the consolidated financial statements 24 Financial instruments and risk management (continued) Notes to the consolidated financial statements 24 Financial instruments and risk management (continued) Notes to the consolidated financial statements 24 Financial instruments and risk management (continued) Notes to the consolidated financial statements 24 Financial instruments and risk management (continued) Notes to the consolidated financial statements 24 Financial instruments and risk management (continued) Notes to the consolidated financial statements 25 Commitments 26 Related party transactions 27 Subsequent events Notes to the consolidated financial statements 27 Subsequent events (continued) 28 Subsidiary undertakings Notes to the consolidated financial statements 28 Subsidiary undertakings (continued) 29 Earnings per share Notes to the consolidated financial statements 29 Earnings per share (continued) 30 Approval of the financial statements Company statement of financial position John Hennessy Dermot Crowley Company statement of changes in equity Company statement of cash flows Notes to the Company financial statements 1 Significant accounting policies 2 Investments in subsidiaries Notes to the Company financial statements 2 Investments in subsidiaries (continued) 3 Trade and other receivables 4 Amounts owed by subsidiaries 5 Cash and cash equivalents 6 Trade and other payables Notes to the Company financial statements 6 Trade and other payables (continued) 7 Amounts owed to subsidiaries 8 Share capital, share premium and merger reserve Notes to the Company financial statements 8 Share capital, share premium and merger reserve (continued) 9 Dividends 10 Attributable profit or loss of the Company 11 Company related party disclosures 12 Commitments Notes to the Company financial statements 12 Commitments (continued) 13 Subsequent events 14 Approval of the financial statements Supplementary Financial Information Alternative Performance Measures (‘APM’) and other definitions • • (i) Adjusting items (ii) Adjusted EBITDA (iii) EBITDA and Segments EBITDA (iv) EBITDAR and Segments EBITDAR (v) Adjusted (loss)/earnings per share (EPS) (basic and diluted) Supplementary Financial Information (continued) Alternative Performance Measures (‘APM’) and other definitions (continued) (vi) Net Debt (vii) Net Debt and Lease Liabilities (viii) Net Debt to Adjusted EBITDA excluding the impact of IFRS 16 (ix) Net Debt and Lease Liabilities to Adjusted EBITDA (x) Net Debt to Value (xi) Free Cash Flow Supplementary Financial Information (continued) Alternative Performance Measures (‘APM’) and other definitions (continued) (xii) Free cash flow per share (FCFS) (xiii) Debt and Lease Service Cover Supplementary Financial Information (continued) Alternative Performance Measures (‘APM’) and other definitions (continued) (xiv) Normalised Return on Invested Capital (xv) Modified EBIT Supplementary Financial Information (continued) Alternative Performance Measures (‘APM’) and other definitions (continued) (xv) Modified EBIT (continued) Excluding IFRS 16 numbers (xvi) Adjusted EBITDA excluding the impact of IFRS 16 (xvii) (Loss)/earnings per share excluding IFRS 16 (basic) and Adjusted loss per share excluding IFRS 16 (basic) Supplementary Financial Information (continued) Alternative Performance Measures (‘APM’) and other definitions (continued) (xvii) (Loss)/earnings per share excluding IFRS 16 (basic) and Adjusted loss per share excluding IFRS 16 (continued) Glossary Revenue per available room (RevPAR) Average Room Rate (ARR) - also Average Daily Rate (ADR) ‘Like for Like’ occupancy, ARR and RevPAR KPIs Segments EBITDAR margin Effective tax rate Fixed lease costs Hotel assets Refurbishment capital expenditure Advisor and Shareholder Contacts D a l a t a H o t e l G r o u p P L C A N N U A L R E P O R T A N D A C C O U N T S 2 0 2 1 Dalata Hotel Group PLC Central Office: 4th Floor, Burton Court, Burton Hall Drive, Sandyford, Dublin 18, Ireland T +353 (0)1 206 9400 F +353 (0)1 206 9401 E W dalatahotelgroup.com info@dalatahotelgroup.com
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