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Return On Capital Employed (R.O.C.E.) is a key
management indicator used internally to measure the performance of the Group's
various businesses. It is also an indicator of the profitability of assets
that are either non-consolidated or accounted for by the equity method.
The ROCE is calculated on the basis of the following aggregates:
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adjusted EBITDA (earnings before interest, taxes,
depreciation and amortization): |
| for each business, it represents EBITDA plus revenue
on financial assets and investments in associates (dividends and
interest) |
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related to capital employed: |
for each business, it represents the average cost of
non-current assets, before depreciation, amortization and
provisions, plus working capital.
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ROCE by business (%)
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2004
* Restated |
2005
* Restated |
2006
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2007
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Hotel |
8.8% |
9.9% |
11.1% |
13.3% |
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Upscale and midscale |
7.1% |
7.9% |
8.7% |
11.6% |
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Economy |
15.4% |
17.0% |
19.2% |
21.5% |
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Economy USA |
6.8% |
7.7% |
9.0% |
9.6% |
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Services |
24.6% |
26.0% |
25.3% |
21.3% |
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Other activities |
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Casinos |
14.7% |
10.6% |
10.0% |
9.7% |
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Restaurants |
12.0% |
14.0% |
13.0% |
12.9% |
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Onboard train Services |
8.8% |
15.3% |
12.4% |
10.4% |
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Group ROCE |
9.9% |
10.7% |
11.9% |
13.6% |
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* In accordance with IFRS 5 "Non-current Assets Held for Sale
and Discontinued Operations", ROCE was restated. |
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Value creation
Value creation is calculated as follows:
(ROCE after
tax - weighted average cost of capital) x capital
employed
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2004
* Restated |
2005
* Restated |
2006
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2007
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R.O.C.E** |
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8.1% |
8.6% |
9.4% |
10.8% |
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W.A.C.C.*** |
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6.4% |
6.5% |
7.3% |
8.6% |
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Capital
employed (in EUR million) |
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10, 883 |
11, 291 |
10, 807 |
10, 606 |
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* In accordance with IFRS 5 "Non-current Assets Held for Sale
and Discontinued Operations", ROCE was restated.
** after taxes
*** weighted average cost of capital |
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