Strong Fee and Free Cash Flow Growth Could
Lead to 15% to 20% Adjusted Diluted EPS Growth Over
Three-Year Period Through 2025
BETHESDA, Md., Sept. 27,
2023 /PRNewswire/ -- Marriott International, Inc.
(NASDAQ: MAR) today will present the company's three-year financial
model through 2025 at its meeting with institutional investors and
security analysts at the W South Beach in Miami Beach, Florida.
In the presentation, the company will reiterate its 2023 outlook
given in August and introduce two-year compounded annual growth
rates (CAGRs) from 2023 to 2025 for certain key performance
metrics. Marriott will outline its plan to add 230,000 to 270,000
net rooms over three years, expanding its industry-leading global
portfolio to nearly 1.8 million rooms by year-end 2025. This
represents a three-year CAGR for net rooms of 5.0 to 5.5 percent.
In addition, the company's model assumes global RevPAR growth
at a two-year CAGR of 3 to 6 percent from 2023 to 2025, after
rising 12 to 14 percent this year.
"With global travel poised for continued robust growth, our
strategy is to deliver the best brands and experiences for
consumers, to attract and retain the most loyal guests and to be in
more places around the world. These are our three paths to win,"
said Anthony Capuano, President and
Chief Executive Officer, Marriott
International. "As consumers continue to prioritize travel
and experiences, we are focused on transforming our technology
platform while leveraging our powerful revenue engines and our
leading Marriott Bonvoy loyalty program to connect people through
the power of travel. With our extraordinary associates around
the world, I am incredibly optimistic about Marriott's
future."
Given the assumptions in its three-year model, the company could
produce the following results:
- Total gross fee revenues could rise 16 to 18 percent
year-over-year in 2023 and at a 6.5 to 9.5 percent two-year CAGR to
reach $5.4 to $5.8 billion in 2025.
- Adjusted earnings before interest, taxes, depreciation, and
amortization (adjusted EBITDA) could increase 18 to 21 percent
year-over-year in 2023 and at a 7 to 10 percent two-year CAGR to
reach $5.2 to $5.7 billion in 2025.
- Adjusted diluted earnings per share (adjusted diluted EPS)
could rise 25 to 29 percent year-over-year in 2023 and at a 10 to
15 percent two-year CAGR to reach $10.10 to $11.45 in
2025.
- Shareholders could see $1.9 to
$2.0 billion in dividends, assuming a
25 percent payout ratio, and $9.8 to
$11.6 billion in share repurchases,
for total shareholder returns of $11.7 to $13.6
billion over the three-year period through 2025.
"Our asset-light and resilient business model drives powerful
results," said Leeny Oberg, Chief
Financial Officer and Executive Vice President, Development. "We
expect to produce significant free cash flow and earnings growth
over the next few years and create meaningful value for our
shareholders."
Growth Areas
As part of the presentation of its
three-year financial model, Marriott will discuss the priority it
is placing on generating valuable global rooms growth over the long
term. The company will discuss its efforts to grow the distribution
of its more than 30 leading brands, while also introducing new
brands and offerings that meet customers' evolving needs. It
will highlight the following key priorities that support its growth
plans – midscale, extended stay, leisure and luxury, and
conversions.
The company expects to follow a tailored development approach in
its expansion in the affordable midscale segment, recognizing
differences by continent to accommodate regional customer and owner
expectations. To date, Marriott has completed an acquisition
(the City Express brand portfolio) in the Caribbean and Latin
America region, created a midscale extended stay brand in
the U.S. & Canada region
(StudioRes) and, just this morning, announced a new brand for its
Europe, Middle East and Africa region (Four Points Express by
Sheraton). The company also plans to further expand in the
extended stay segment, having recently announced the launch of
Apartments by Marriott Bonvoy.
Marriott is also emphasizing luxury and leisure offerings.
It is currently leading in luxury distribution globally, with
nearly 500 open luxury hotels and 17 percent of the market,
approximately 1.5 times the size of its next largest competitor.
The company remains focused on extending its leading position with
another 225 luxury properties in the pipeline. Conversions,
particularly multi-unit conversions, are also a critical piece
of the company's overall growth strategy. In the first six
months of 2023, conversions accounted for 63 percent of room
signings, including the MGM Resorts transaction, and 25 percent
excluding MGM.
Continued robust growth in Marriott's branded residential
business, cobrand credit card offerings and other adjacencies such
as The Ritz-Carlton Yacht Collection are also expected to enhance
the company's fee growth. Marriott expects to continue its
disciplined approach to investing capital in long term value
enhancing projects that drive cash flow growth.
Marriott will provide a live webcast of today's investor and
security analyst conference. The live webcast will be available on
September 27, 2023, from
approximately 8:00 AM to 12:30 PM Eastern
Daylight Time in the U.S. Slides and video from the meeting
will be provided through a live webcast via Marriott's investor
relations web site. The slides contain a three-year financial model
through 2025, including estimates of adjusted EBITDA and adjusted
diluted EPS, as well as non-GAAP financial measure reconciliations
for those and all other non-GAAP financial measures referenced, as
appropriate. The non-GAAP financial measure reconciliations are
available here. Copies of slides will be available for download at
the website listed below at approximately 7:00 AM Eastern Daylight Time. Those wishing to
access the webcast should log onto www.marriott.com/investor, and
select the 2023 Security Analyst Meeting link. Presentation
materials from the meeting and the webcast replay will be available
online after the meeting. A transcript of the meeting
will also be available on the company's website.
Note on forward‐looking statements:
This material
contains "forward‐looking statements" within the meaning of federal
securities laws, including statements related to future RevPAR,
rooms growth, fees, cash flow, earnings, investment spending,
dividends, share repurchases, and other financial and/or
performance measure estimates, outlook and assumptions; the impact
of new brands and offerings; our development pipeline and outlook;
our planned technology enhancements; travel and lodging demand
trends and expectations; our sustainability-related goals and
targets; the size and strength of our loyalty program; our approach
to capital investment; our plans and strategies; our future
prospects; our creation of shareholder value; and similar
statements concerning possible or anticipated future events and
expectations that are not historical facts. We caution you
that these statements are not guarantees of future performance and
are subject to numerous evolving risks and uncertainties that we
may not be able to accurately predict or assess, including the risk
factors that we describe in our Securities and Exchange Commission
filings, including our most recent Annual Report on Form 10‐K and
Quarterly Reports on Form 10-Q. Any of these factors could
cause actual results to differ materially from the expectations we
express or imply in this material. We make these statements
as of September 27, 2023, and we
undertake no obligation to publicly update or revise these
statements, whether as a result of new information, future events
or otherwise.
Marriott International, Inc. (NASDAQ: MAR) is based
in Bethesda, Maryland, USA, and
encompasses a portfolio of nearly 8,600 properties across more than
30 leading brands in 139 countries and territories. Marriott
operates and franchises hotels and licenses vacation ownership
resorts all around the world. The company offers Marriott
Bonvoy®, its highly awarded travel program. For more
information, please visit our website at www.marriott.com. In
addition, connect with us on Facebook and @MarriottIntl
on Twitter and Instagram.
Marriott encourages investors, the media, and others interested
in the company to review and subscribe to the information Marriott
posts on its investor relations website at
www.marriott.com/investor, which may be material. The contents of
these websites are not incorporated by reference into this press
release or any report or document Marriott files with the SEC, and
any references to the websites are intended to be inactive textual
references only.
IRPR#1
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SOURCE Marriott International Inc.