SHR Analyst Meeting 9M/2020...2020/11/26 · Mauritius 8% 9M/2019 9M/2020 Self-Managed 3rd-Party...
Transcript of SHR Analyst Meeting 9M/2020...2020/11/26 · Mauritius 8% 9M/2019 9M/2020 Self-Managed 3rd-Party...
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SHR Analyst Meeting 9M/2020
November 26, 2020
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S Hotels & Resorts The premier hotel investment and resort management company, creating unique travel experiences for our guests and value for our stakeholders
Agenda
▪ SHR Company Overview
▪ Strategic Recovery Path for COVID-19
▪ Business Direction
▪ 9M/2020 Operating & Financial Performance
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SHRCompany Overview
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2019
PROVEN TRACK RECORD TO GROW FOOTPRINT
4
227
3,116 3,390 3,393
4,271 4,647
2014 2015 2016 2017 2018 2019
+274+2,889
Number of keys
+3
+878
+376
Asia-Pacific50.3%
Europe 38.0%
America8.5%
Africa2.8%
Others0.4%
Notes:(1) Overall portfolio includes all assets including UK assets. Breakdown by keys.(2) Core portfolio excludes UK assets, which are held through a 50% stake in ourequal joint venture with FICO UK. Breakdown by customer nights.(3) Haven’t include Crossroads island 3 yet
Major customersGeographical coverage
Thailand Maldives Fiji Mauritius United Kingdom
13% 9% 7% 4% 67%
2014
◼ Singha Estate acquiredSantiburi Koh Samui
Apr 2014
◼ Acquired Phi Phi IslandVillage Beach Resort
Nov 2014
◼ Acquired 2 Holiday Inn hotels and 1 Mercure hotel through second JV with FICO UK
Sep 2016
◼ Commenced land reclamation, shoreline protection, landscaping and construction of Project Crossroads Phase One (via Singha Estate)
Jan 2017
◼ SHR acquired Project Crossroads Phase One from Singha Estate
Mar 2018
◼ Santiburi Koh Samui constructed 19 new grand reserve pool villas (new room category)
◼ Acquired 6 Outrigger hotels
May/Jun 2018
◼ Commencement of operations for two hotels in Maldives
Sep 2019
◼ SHR trading on SETNov 2019
◼ 6 grand deluxe poolvillas added to SantiburiKoh Samui
Apr 2015
◼ Entered into equal JV with FICO UK to acquire UK portfolio of 26 hotels
Oct 2015
◼ Disposal of 50% share investing in Island 3 Crossroads project
Feb 2020
2015 2016 2017 2018 2019 2020
39Hotels
Contribution by Number of keys
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SHR’S GLOBAL HOSPITALITY PORTFOLIO
Note: Core portfolio excludes Holiday Inn and Mercure hotels in the UK which are held through a 50% stake in our equal joint venture with FICO UK.(1) Includes Self-Managed Hotels under franchise agreement(s).
Outrigger Hotels UK Hotels
Total # of keys Total # of Hotels
Self-Managed Hotels(1)
5
Hard Rock Hotel Maldives178
2,964
Outrigger Laguna Phuket Beach Resort
Outrigger Koh Samui Beach Resort
255 52 Phi Phi Island VillageBeach Resort 201
Outrigger Konotta Maldives Resort 53
SAii Lagoon Maldives,Curio Collection by Hilton
198
Outrigger Fiji Beach Resort 253 Castaway Island, Fiji 65
Outrigger Mauritius Beach Resort
181
151 Santiburi Koh Samui 96
TH
6044 Hotels
Mauritius
1811 Hotel
Maldives
4293 Hotels
UK3,115
29 Hotels
Fiji
3182 Hotels
Total Number of Resorts/Hotels 39
Total Number of Keys 4,647
Portfolio outreach/Number of countries 5
Hotel Brands 7
Upscale 4%Luxury 2%
Upper upscale
27%
Upper midscale
67%
Contribution by Positioning
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OUR HOSPITALITY MANAGEMENT PLATFORM
SHR is able to tap on both in-house, home-grown
management platformsas well as access to strong
brands via collaboration with reputable
international operators.
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“Affordable luxury lifestyle resort”
1. Self-Managed2 properties | 297 keys
3. Self-Managed with Franchise Agreement
2 properties | 376 keys
2. Third Party Hotel Management Agreement
6 properties | 859 keys
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HOTEL MANAGEMENT AGREEMENT PLATFORM
“To set a regional hotel brand with the vision to
bring the world inclusivityrather than separation”
❖ Immersion travel culture
with local experience
❖ Thai Primary and
Secondary Cities &
Further SEA deployment
❖ Upper midscale
❖ Cultural Story / Hidden
neighborhood to be
explored ❖ Thai sensibilities, but
with a creative,
dynamic global view
❖ Resort style in Pacific
and Indian ocean
❖ Upper upscale
❖ Refine luxury as
personal freedom
▪ Expand accelerated growth capacitywith “Asset-Light” model
▪ Remunerate recurring management fee income
▪ Develop the image of a particular hotel according to the standard of the Company’s own brand
▪ Offer investment to revamp the image of the asset in various forms
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KEY POINTS OF SHR’S HMA PLATFORM
The collectible fees comprise ofBase Management Fee, Incentive Management Fee and Marketing Contribution Fee for all managed
properties.
Management Fee
41 Properties
2025 Target
• Quality, Safety, Reliability• Standard operating
procedure
Standard Implementation
• Property Improvement Plan• Design & Construction• Talents Development • Systems Change
Developing
• Automatized, Centralized, Cutting-edge
• Modern, Responsive, Conversion-driven
• User-friendly
Commercial Platform
• Departmental Support• Human Resources Optimization• Strategy & Innovation Hub
Expertise
Enhance direct bookings Emphasize hotels’ highest margin
Apply dynamic pricing
Website Development
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Business Direction
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To introduce the brand to
in home market
▪ To reduce license and management fee
▪ To cluster operation of Outrigger with self-manage properties
would suggest the economy of scales and provide cost saving
Profitability optimization
Laguna Phuket Beach Resort
Flexibility in operations management
Koh Samui Beach Resort
To Launch example of new
SHR brand under HMA model
TERMINATE HOTEL MANAGEMENT AGREEMENT WITH OUTRIGGER
&ENTER INTO SELF-MANAGED PLATFORM
Able to adjust the strategies and policies to enhance potential and adaptability
23%
44%
33%
Self-Managed
Outrigger
Crossroads
28%
30%
42%
Targeted Revenue Contribution by Platform
9M2020 2021F
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3rd Party HMA14%
Self-Managed and Franchise
25%
Homegrown HMA40%
UK Portfilio Hotels
21%
3rd Party HMA16%
Self-Managed and Franchise
10%
UK Portfilio Hotels
74%
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Balanci ng Growth wi th Fi nanci al Strength
Gearing toward Self-Managed, Franchise and
Homegrown brand platform with solid base
performance from third party operator guarantee”
Current (2020) 5-year Destination (2025)
39 hotels 80 hotels
Healthy capital structure
Optimalcapital structure
✓ Access various sources of fund✓ Minimise cost of funding✓ ROE improvement
✓ Positive liquidity status✓ Financing flexibility✓ Available debt room to support growth
9M2020 Room contribution
by management platform
Targeted portfolio by platform in
2025“
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Strategic Recovery Path for COVID-19
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Q3/2020 HIGHLIGHTS
S t r a t e g i e s
▪ As of 30 Sep 2020, 35 properties out of 39 total hotel portfolio or 90% of number of keys are operational
Apr May Jun Jul Aug Sep Oct
90%90%
75%
▪ Outrigger Mauritius Beach Resort will resume its operation on Dec 1, 2020. While Konotta will be closed until Q3’2021
Resumption of Hotel OperationsSignif icant Development
(Rooms)
Clustering service & Workforce management
Decreasing the minimum breakeven occupancy
on EBITDA to approximately 30 – 40%.
Moving forward for rebalancing portfolio and
major customer to rapidly adapt to the changing
situation
▪ On October 15, 2020, the Company announced the establishment of “S Hotels and Resorts Management Company Limited” with the objective to support the Hotel Management Agreement business
▪ Aim to launch the hotel management by 2021
4,647
0
N u m b e r o f k e y s r e - o p e n e d d u r i n g Q 3 / 2 0 2 0
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PROGRESSIVE IMPROVEMENT IN 2H2020
14
40%
0%
15%
30%
45%
Jul Aug Sep
United Kingdom
Occ. Rate
Fiji
Thailand(Self-manage hotels)
Oct
27%
0%
15%
30%
Jul Aug Sep
Occ. Rate
Oct
21%
0%
15%
30%
Jul Aug Sep
Occ. Rate
Oct
Maldives(Self-manage hotels)
11%
0%
15%
30%
Jul Aug Sep
Occ. Rate
Oct
Applied for Quarantine Accommodation
Outrigger Laguna Phuket Beach Resort and Outrigger
Koh Samui Beach Resort have been certified for ALSQ
Hotel Management Platform
Properties with or without brand with opportunity
to convert to self managed in order to enhance
profitability of existing portfolio
ADR Performance by Geographies in Q3/20
▪ Maldives and UK reported the drop in ADR ~ 20%
▪ Thailand faced with the intense price competition
especially Samui, recorded the contraction in ADR
around 60%. While Phuket declined only 17%
▪ Fiji marked the worst performance due to the
heavily reliant on local business at the moment
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PICK UP DEMAND IN MALDIVES
▪ In Q3/2020, traffic mostly driven from UAE, followed by USA, UK, and Russia.
▪ Foreseen the strong recovery demand towards the end of 2020 and the beginning of 2021, driven by the rebound in India and Europe tourists.
70%(Forecasted)
21%
0% 20% 40% 60% 80% 100%
Oct
Nov
Dec
41%(Forecasted)
▪ Create the unforgettable memories for celebrating the festive season with fun events full of good vibe to enjoy the new start!
▪ The Marina is currently occupied by 63% of total capacity
Business on Books +Forecasted
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FORWARD LOOKING INBOUND TOURIST ARRIVALS
United Kingdom
Thailand
Mauritius Fiji
▪ D i v e r s i f i e d p o r t f o l i o c a n c a p t u r e r e c o v e r y d e m a n d a l l o v e r t h e w o r l d
▪ D o m e s t i c a n d I n t e r - r e g i o n m a r k e t s r e m a i n k e y d r i v e r i n 1 H / 2 0 2 1
▪ A d a p t e d s t r a t e g i e s t o e n h a n c e o c c . r a t e i n w e e k d a y , a c c e n t u a t i n g c o r p o r a t e / g r o u p
a c t i v i t i e s a n d m o v i n g t o w a r d d i g i t a l d i s t r i b u t i o n c h a n n e l
▪ Only local business is forecasted for Q4/2020 and Q1/2021
▪ The government is pressing ahead with its quarantine-free travel with New Zealand and Australia, followed by Pacific Bubble
▪ Focus on local market with somespecial deals especially weekend for the domestic travelling
▪ Currently no update on border opening with no mandatory quarantine
▪ Still face with the rise of COVID-19 case, led to imposing the second lockdown measures during Nov 5 to Dec 2, 2020
▪ The Company is closely observing whether any partial suspension is required
▪ Extend “We go travel together” until Jan 2021▪ Open the border for premium long stay (Special tourist visa: STV),
implemented from Oct 1, 2020 until Sep 30, 2021▪ BOT estimates the international arrival in 2021 to stand at 9.0 million
Maldives
▪ Re-open for international tourists with hassle-free entry and no testing requirements or mandatory quarantine
▪ Tourist arrivals is expected to stand at 0.5 and 1.1 million in 2020 and 2021, respectively
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9M/2020 Operating & FinancialPerformance
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Self-Managed Hotels Outrigger Hotels
UK HotelsCrossroads Hotels (1)
H o t e l p e r f o r m a n c e a c r o s s p o r t f o l i o m a t e r i a l l y a f f e c t e d b y t h e C O V I D - 1 9 , a s w e l l a s , t h e h o t e l s h a d t o s u s p e n d
o p e r a t i o n s f r o m A p r i l 1 , t o J u l y 1 4 , 2 0 2 0 .
PORTFOLIO PERFORMANCE BY MANAGEMENT PLATFORM
USD/THB = 31.52FJD/THB = 14.39MUR/THB = 0.81
GBP/THB = 40.05USD/THB = 31.52
7,915
5,751
8,896
2,214
ADR RevPAR
9M/2019
9M/2020
73%
25%
Occupancy
6,046
4,659
6,540
1,467
ADR RevPAR
9M/2019
9M/2020
77%
22%
Occupancy
35%24%
Occupancy
9,750
3,378
10,477
2,515
ADR RevPAR
9M/2019
9M/2020 70%
29%
Occupancy
2,712
1,8872,307
664
ADR RevPAR
9M/2019
9M/2020
(1) officially opened on 1 September 2019.
Unit: %, THB
18
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1,182.2 478.5
183.3
92.6
551.7
648.4
414.2
397.2
302.8
151.3
9M/2019 9M/2020
1,249.0 742.9
245.0
159.8
795.4969.0
437.4717.5
314.7 287.7
9M/2019 9M/2020
Financial cost
D&A
Admin expense
Selling expense
COGS
Thailand37%
Maldives43%
Fiji12%
Mauritius8%
9M/2019 9M/2020
Self-Managed
3rd-Party HMA
Self-Managedwith Franchise
SUMMARY OF SHR CONSOLIDATED FINANCIAL PERFORMANCE
52% YoY
19
29%
68%
33%
44%
23%
1,265.6
2,639.7
Revenue from services by management platform
Unit: million baht
9M/2020 Revenue from services by hotel locationUnit: (%)
Gross profit and margins
Unit: million baht, (%)
Nature by expense
957.3
98.3
36%
8%
0%
5%
10%
15%
20%
25%
30%
35%
40%
9M/2019 9M/2020
90% YoY
Gross profit decreased by 90% YoY due to the decrease in operating revenue of Self- Managed Hotels and Outrigger Hotels, impacted by COVID-19 pandemic
18% YoY
• The operating cost (excluding depreciation and interest) was trimmed in 3Q2020 by 48% YoY and 9% QoQ. While 9M2020 shown a 18% decease in operating cost, compared to same period last year.
• Excluded Crossroads Project operating cost for 9M2020 was down by 36% YoY.• The increase of admin expenses in 9M2020 was mainly from the recognition of
expenses incurred during the suspension period as administrative expenses.
Unit: million baht, (%)
3%
Excluded Crossroads Project
36% YoY
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3
-1,542
9M/2019 9M/2020
Adjusted net profit (loss) (2)
SUMMARY OF SHR CONSOLIDATED FINANCIAL PERFORMANCE
Adjusted EBITDA (1)
Remark:(1) Adjusted EBITDA is calculated from EBT plus Finance cost, Depreciation and Amortization, Interest income from Loan to JVs and deduct Interest income, unrealized loss from exchange rates and non-recurring items(2) Adjusted net profit (loss) is calculated from Net profit (loss) of the period deduct unrealized loss from exchange rates and non-recurring items
20
Unit: million baht
Unit: million baht
794.6
(563.9)
9M/2019 9M/2020
Net profitfor the period
= (1,175.2)
EBITDA= (185.3)
261.3
(854.0)
(267.1)
Q3/2019 Q2/2020 Q3/2020
69% QoQ
(8.1)
(787.1)(596.3)
Q3/2019 Q2/2020 Q3/2020
24% QoQ
YoY: Decreased due to an absence of revenue during the suspension period together with a decrease in Share of profit (loss) from an associate and joint ventures.QoQ: Improved 69% on the back of a reinstatement of hotels operation, a rebound in share of gain form JV, along with a 9% drop in operating cost
YoY: Decreased due to a higher depreciation on ROU assets along with the opening of Crossroad Project in Sep 2019.QoQ: There was FX loss at 3 MTHB in Q3/20, decrease from 24 MTHB in Q2/20
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35%
8%
57%
2021 2022 2023 Onwards
LOW GEARING & POSITIVE LIQUIDITY STATUS
Liquidity status as at 30 September 2020
Cash balance 2,408.9 MTHB
Available credit facility (1)
1,309.6 MTHB
IBD/E = 0.47x
(1) including project loan
Financial Position as at 30 September 2020
Total Interest-bearing debts of 8,129.6 million baht
THB, 46%
USD, 42%
EUR, 7%FJD, 5%
Interestbearing debtby Currency
Total Asset
29,161.6MTHB Liabilities,
39%
Equity,
61%
Dec 2019 Sep 2020
Total Asset
29,061.1MTHB Liabilities,
40%
Equity,
60%
Interestbearing debtby Maturity
Available debt room to support future growth
8,130
0.47x
1.50x
-0.50x
0.50x
1.50x
2.50x
3.50x
-4,300
15,700
35,700
IBD/E ratio (x)
Unit: million baht
Equity
Debt headroom
Interest-bearing debt (IBD)
Sep 2020 2025F
21
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Thank you
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The information contained in this material has been prepared by S Hotels and Resorts Public Company Limited (“SHR” or “S Hotels and Resorts”) solely for information purpose and does not constitute an offer or invitation to sell or the solicitation of an offer or invitation to purchase or subscribe for shares in S Hotels and Resorts .
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